IRA

Save for your retirement with an Individual Retirement Account (IRA)

Traditional IRAs
Ideal for wage earning employees, contributions may be tax-deductible and interest earned is tax-deferred until retirement.  In 2015 and 2016, the maximum annual contribution limit is $5,500 and customers 50 years or more can make additional catch-up contributions of $1,000 annually.  Required minimum distributions begin at age 70-1/2, however, customers may begin to take distributions at age 59-1/2 without penalty.

See how much you could potentially save on your taxes based on your tax bracket:

Tax Bracket:15% 28% 31% 36% 40%
IRA Deductible
Contribution
Amount:
Annual Tax
Savings
Potential
Annual Tax
Savings
Potential
Annual Tax
Savings
Potential
Annual Tax
Savings
Potential
Annual Tax
Savings
Potential
$500$75$140$155$180$200
$1,000 $150$280$310$360$400
$2,500 $375$700$775$900$1,000
$5,500$825$1,540$1,705$1,980$2,200

Roth IRAs 
Roth IRAs are a great way to supplement your retirement savings–especially for families planning to buy their first home or individuals who don’t qualify for a traditional IRA.  Unlike a traditional IRA, contributions are not tax-deductible and are made with after-tax funds, so you can withdraw your contributions at any time without penalty.  In 2015 and 2016, the maximum annual contribution limit is $5,500, and customers 50 years or more can make additional catch-up contributions of $1,000 annually.  Earnings distributions can be made tax-free at age 59-1/2 if the funds have been in the IRA for five years or more.  There are no mandatory minimum distributions.  Tax-free distributions due to death or disability or for the purpose of buying your first home are also allowed at any time.

TSB customers may select either a Passbook Savings Account or Certificate of Deposit for their IRAs. IRA deposits are insured by the FDIC up to $250,000 per qualifying account.

Changing Employers or Retiring?
Avoid withdrawal penalties by transferring your assets to a TSB IRA or another qualified plan.  Ask your employer to arrange for a “direct rollover” of your retirement savings into a new IRA account with us, or you can do it yourself with an IRA-to-IRA rollover. Rollovers must be completed within 60 days from the date you receive the assets from your old retirement savings account or IRA to avoid the mandatory 20% withholding and other possible penalties.

Please consult your tax advisor regarding your specific situation and the deductibility of your contributions.

 

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