Individual Retirement Plans (IRAs) - Deposit Based
Save the way that makes sense for you.
An individual retirement account (IRA) can play a huge role in your retirement strategy. There are different types of IRAs with different unique benefits, and none of our IRAs have a maintenance fee. Understanding your options can better prepare you for retirement.
Traditional vs. Roth
The two main options when it comes to IRAs are traditional or roth. The key difference is the timing of when you pay taxes on the money you’ve saved; either when the contributions are initially made or when the funds are withdrawn.
With a traditional IRA, money deposited into the account may be tax-deductible and is not subject to income tax until you withdraw funds. This ability to delay when taxes are paid can be an advantage to some investors.
In a roth IRA, the contributions you make have already been taxed and are not tax-deductible. Since you’ve already paid taxes on these funds, you are not subject to income tax at withdrawal. You can even take certain early distributions without paying an early withdrawal penalty. If you have had your Roth IRA for more than 5 years and are at least 59 ½ years old, distributions from the account are tax-free and penalty free. This means that the earnings your Roth IRA generates are considered tax-free.
Whether you’re establishing a traditional or roth IRA, both options are offered as term or no term IRAs.
We offer a variety of term lengths, with variable rate options to better suit your individual needs.
No Term IRA
The name might be a giveaway, but the unique benefit of a no term IRA is that you are not locked into any set term length.
If you have a 401(k) or an employer-provided qualified retirement plan from a previous employer, one of your options is to roll over the funds into an IRA. This rollover IRA prevents you from having to pay taxes or withdrawal penalties at the time funds are transferred and could help you defer income taxes for years. You may also have more investment choices available to you than were offered in your employer-provided retirement plan.
An IRA can offer advantages as a way to pass along money to your family or other beneficiaries. IRS regulations allow the ability to extend IRA benefits over time, with an election of annual payments for the life of the recipient or for a fixed number of years. There is also the option of a lump sum payment, and spouses can rollover an inherited IRA into their own IRA. We’re happy to discuss your options if you are inheriting an IRA or your estate plan includes IRA assets.
If you’re inheriting an IRA, or planning to leave one behind, we’re glad to discuss your options with you.
A simplified employee pension plan (SEP) is an easy way for employers to contribute directly to an employee’s retirement savings . Only employers can make contributions to a SEP, by depositing funds into a type of traditional IRA called a SEP IRA. A major advantage of a SEP IRA is the higher contribution limit per year – up to 25% of an employee’s pay can be contributed.
If you’re self-employed, you can benefit from setting up a SEP IRA to save for your own retirement.