The Roth IRA allows you to invest after-tax dollars now, receive the growth of tax-deferred earnings, and have the principal amount tax-free when you take distributions. Plus, your tax-deferred earnings can become tax-free if the account is open for a minimum of 5 years and one of the following events occurs: you are age 59 ½, purchase a new home, disability, or death. Roth IRA funds may be withdrawn penalty-free, for college education expenses, or for the purchase of your first home. In both cases, the funds may be used by the IRA owner, spouse, child or grandchild. (Withdrawals prior to investment maturity may be subject to bank penalty.) A spouse may open a Roth IRA, even if the other spouse participates in an employee-sponsored retirement program. Check with a Member Service Representative for details on current income eligibility requirements.
With the Traditional IRA your contributions may be eligible as a tax deduction and the investment earnings are tax deferred until the time of withdrawal. The Traditional IRA permits a spouse to make a tax deductible contribution even if the other spouse participates in an employer-sponsored retirement program. Penalty-free withdrawals can be made for college expenses or the purchase of a first home. The funds may be used by the IRA owner, spouse, child or grandchild. Check with your Member Services Representative for details on current income eligibility requirements.
A SIMPLE IRA plan is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees' retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or non-elective contributions. All contributions are made directly to an Individual Retirement Account set up for each employee. A SIMPLE IRA plan is usually found in companies with less than 100 employees who want to provide an alternative to a qualified profit sharing plan.
SEP IRAs (Simplified Employee Pension Plan)
A SEP provides employers with a simplified method to make contributions toward their employees' retirement and, if self-employed, their own retirement. Contributions are made directly to an Individual Retirement Account set up for each employee. An employer may offer a SEP plan in conjunction with another defined contribution plan. This plan can be set up by any type of business, including sole proprietorships, partnerships or corporations with any number of employees.