Traditional IRA
Here’s what you can expect when investing in a Traditional IRA:
- $100 minimum contribution requirement to open
- You can contribute if you (or your spouse, if filing jointly) have taxable compensation**
- Contributions may be tax-deductible on state and/or federal income taxes, depending on eligibility
- You can withdraw money at any time
- Withdrawals before age 59 ½ may be subject to a 10% IRS penalty
- Due to the SECURE Act, if your 70th birthday falls on or after July 1, 2019, you do not need to take withdrawals until you reach age 72***
*Consult a tax advisor for detailed advice.
**Prior to January 1, 2020, contributions were not allowed after age 70 ½. Contact us for details on contribution limits.
***Withdrawals must begin at age 70 ½ if you turned 70 ½ before January 1, 2020.
Roth IRA
While similar to a Traditional IRA, a Roth IRA offers different tax advantages, making it another excellent choice for retirement savings.
Here’s what you can expect when investing in a Roth IRA:
- Can be opened and funded without employer participation
- You can contribute at any age if you (or your spouse, if filing jointly) have taxable compensation and fall within certain income limits
- You can withdraw money anytime
- Contributions are made with after-tax dollars
- Investment grows tax-deferred
- Allows qualified, tax-free withdrawals
In some cases, withdrawing funds early may result in penalties, potentially reducing your principal
Visit our branch or give us a call today to find out which IRA option is right for you.
