Individual Retirement Accounts (IRA)

• Tax-advantaged retirement savings*
• Earn competitive dividends above standard savings rates on balances over $100
• Traditional and Roth IRA options
• No setup fees
• No monthly or annual maintenance fees
• $6,000 contribution limit per year
• Additional $1,000 "catch-up" contribution allowed for ages 50+
• Funds can be used to purchase share certificates within IRA
• $100 minimum deposit to open

There are advantages to both traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.

Traditional IRA

• No income limits to open
• No minimum contribution requirement
• Contribution limits apply*
• Contributions are tax deductible on state and federal income tax**
• Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
• Withdrawals can begin at age 59 ½
• Early withdrawals subject to penalty**
• Mandatory withdrawals at age 72

 Roth IRA

• Contribution limits apply*
• Income limits to be eligible to open Roth IRA*
• Contributions are NOT tax deductible
• Earnings are 100% tax free at withdrawal**
• Principal contributions can be withdrawn without penalty**
• Withdrawals on dividends can begin at age 59 ½
• Early withdrawals on dividends subject to penalty***
• No mandatory distribution age
• No age limit on making contributions as long as you have earned income

Resources

• Traditional vs. Roth Informational Brochure (PDF)
• Traditional IRA Frequently Asked Questions (PDF)
• Roth IRA Frequently Asked Questions (PDF)

*Refer to the IRS website for current limits.

**Subject to some minimal conditions. Consult a tax advisor.

***Certain exceptions apply, such as healthcare, purchasing first home, etc.

College is costly — but a little pre-planning can go a long way. Set aside savings for your child’s college education in a CESA, where your dividends will grow tax-free.*

Withdrawals are tax-free and penalty-free when used for qualified education expenses* before he or she turns 30.** As an added bonus, there’s no penalty to transfer the account to another member of the family. 

• Set aside funds for your child's education
• No setup or annual fee
• Dividends grow tax-free*
• Withdrawals are tax-free and penalty-free when used for qualified education expenses*
• Designated beneficiary must be under 18 when contributions are made
• To contribute to an ESA, certain income limits apply**
• Contributions are not tax deductible
• $2,000 maximum annual contribution per child
• The money must be withdrawn by the time he or she turns 30***
• The ESA may be transferred without penalty to another member of the family
• $100 minimum deposit to open

Resource

• CESA Frequently Asked Questions (PDF)

*Qualified expenses include tuition and fees, books, supplies, board, etc.

**Earnings withdrawn after he or she turns 30 are subject to income tax and a 10% penalty.

***Consult your tax advisor to determine your contribution limit.