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INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)

If you want more than your private pension and Social Security, open an IRA that lets you fund a financially stable, tax-sheltered future.

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INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)

Save for retirement your way with a Traditional IRA.

Fund your future today.

It stands for Individual Retirement Account, and it will help you save for the future. We can show you how to put the full power of tax-deferred savings to work for your finances. A Traditional IRA lets you make deposits toward your retirement. The contributions may be tax deductible but check with your tax professional. With a Traditional IRA, you’re in control:

  • You can open one and fund it without an employer
  • Enjoy immediate tax benefits with deferred tax payments until retirement
  • Easier access to your funds than traditional employer plans
  • Contributions allowed at any age while employed
  • You’re able to decide how much you want to save (within limits)

Open a Roth IRA and Save

Start saving now for a better, richer retirement.

This is an Individual Retirement Account funded by after-tax (nondeductible) contributions. If the funds are left on deposit for a 5-year minimum, withdrawals are tax-free after you turn 59 1/2. Tax-free withdrawals are permitted in the event of death, disability or for qualified first-time homebuyers. Roth IRA benefits include:

  • Penalty-free withdrawals after 5 years
  • Tax-free earnings after turning 59 ½
  • Contributions allowed at any age while employed
  • No required distributions in your lifetime
  • Tax-free withdrawals (up to $10,000) if used for first-time home purchase or education
  • Tax-free if disabled or upon death

Traditional & Roth IRA Maximum Contribution Limits

Traditional & Roth IRA Maximum Contribution Limits

Tax YearUnder age 50Age 50 and Older
2021$6,000 $7,000
2022$6,000 $7,000
You can contribute at any age as long as you have earned income from employment. Contribute up to a maximum of $6,000, and a catch-up contribution of $1,000, if you’re age 50 or older. If eligible, your spouse may be able to contribute the amounts listed above to his or her IRA as well. There is an additional requirement for Roth IRA contributions based on modified adjusted gross income (MAGI)2.

IRA & Coverdell ESA Rates

IRA & Coverdell ESA Rates

TypeMinimum BalanceAPY*Dividend Rate
IRA Savings Account (S5)None0.15%0.15%
Roth Contributory IRA (S10)None0.15%0.15%
Coverdell ESA (S12)None0.15%0.15%
Dividend Rates and Annual Percentage Yields are effective: May 1, 2022
*APY denotes Annual Percentage Yield. Rates are subject to change without notice. Penalty for early withdrawal. IRA denotes Individual Retirement Account.

Making withdrawals from an IRA

Make penalty-free withdrawals under the right conditions.

Traditional IRA:

Access to your Traditional IRA assets is always guaranteed. However, until age 59 ½ there is a 10 percent early distribution penalty unless you qualify for one of the following exemptions:

  • Disability
  • Qualifying medical expenses
  • Qualifying education expenses
  • Unemployment (under certain conditions)
  • Qualifying first home purchase
  • Death
  • Receipt of your Traditional IRA assets in equal payments over your life expectancy
  • IRS tax levy

Roth IRA:

You may make tax-free and penalty-free withdrawals from your Roth IRA if you meet two conditions. First, a Roth IRA must have been open for a minimum of five years. Second, the withdrawal must be made after one of the following occurs:

  • You are over age 59½
  • Funds are going to your beneficiary upon your death
  • You have become disabled, or
  • You are using the funds for a first-time home purchase (lifetime limit is $10,000 per person)

Distributions that meet the above requirements are called “qualified distributions.” While you may take distributions from your Roth IRA at any time, distributions that are not qualified distributions are subject to taxes (and, in some cases, early distribution penalties) to the extent they exceed your aggregate contributions to Roth IRAs.

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Individual Retirement Account (IRA) FAQs

Am I ever required to distribute assets from my Traditional IRA assets?

The IRS requires that all Traditional IRA holders begin taking required minimum distributions based on their required beginning date. The SECURE Act, which took effect on January 1, 2020, made a change to when required minimum distributions must begin. If an IRA holder turns 70½ in 2020 or later, they now can wait until age 72 to begin taking required minimum distributions. If an IRA holder turned 70½ by the end of 2019, then required minimum distributions cannot be delayed under the new rule. These distributions are generally based on the Traditional IRA account balance divided by the applicable distribution period. Since the purpose of Traditional IRAs is to provide for retirement – not to be a tax shelter – IRA holders who fail to take their required distributions are subject to penalty.

Am I ever required to take funds from my Roth IRA?

Unlike the Traditional IRA, there are no required minimum distributions. Your dollars can continue to grow until you need them. There are special distribution requirements when these plans pass to your beneficiaries.

Can I get tax credits for making IRA contributions?

You may be able to receive a tax credit for making contributions for the 2022 tax year. The full credit is 50% of the first $2,000 of contributions. The full credit is available for joint filers who have joint modified adjusted gross income (MAGI) up to $41,000, heads of households with MAGI up to $30,750, or other filers with MAGI up to $20,500. Smaller tax credits are available for joint filers with MAGI up to $68,000, heads of households with MAGI up to $51,000 or other filers with MAGI up to $34,000.

What is the Saver’s Credit and how does it work?

Certain individuals may receive a nonrefundable tax credit (not to exceed $1,000) for regular, spousal, and catch-up contributions to Traditional or Roth IRAs. Eligible individuals determine their credit by multiplying the applicable percentage by their Traditional or Roth IRA contributions up to $2,000. Joint filer taxpayers with modified adjusted gross income above $68,000 for 2022 are not eligible.

Taxpayers calculate their credit amount using Form 8880, Credit for Qualified Retirement Savings Contributions, which they must file with their income tax returns.

If I convert a Traditional IRA to a Roth IRA, do I owe any taxes?

Yes. Upon conversion, you will owe ordinary income taxes on your investment earnings and on deductible contributions you have made to your traditional IRA. This amount is taxable income in the year the money leaves the traditional IRA. Basically, you owe tax on any money that has not been taxed before. But you will have the opportunity to withdraw earnings made after the conversion, free of any taxes.

Disclosures

Tax Deductions: Consult your financial advisor, accountant or tax advisor for more information.

2For the 2021 tax year, you may be eligible to make a maximum contribution if your modified adjusted gross income (MAGI) does not exceed $125,000 for single taxpayers or $198,000 for married taxpayers filing joint income tax returns. However, if your MAGI is within the phase-out ranges of $125,000-$140,000 for single taxpayers, $198,000-$208,000 for married taxpayers filing joint returns, or $0-$10,000 for married taxpayers filing separate returns, you may make a partial prorated contribution. For the 2022 tax year, you may be eligible to make a maximum contribution if your modified adjusted gross income (MAGI) does not exceed $129,000 for single taxpayers or $204,000 for married taxpayers filing joint income tax returns. However, if your MAGI is within the phase-out ranges of $129,000-$144,000 for single taxpayers, $204,000-$214,000 for married taxpayers filing joint returns, or $0-$10,000 for married taxpayers filing separate returns, you may make a partial prorated contribution. If your MAGI exceed these limits, you are not eligible to make Roth IRA contributions. You might however consider a Traditional IRA, which generally does not have income restrictions and holds certain tax advantages.