Individual Retirement Accounts
It's never to early to save for the future. An IRA is a personal savings plan that provides income tax advantages to individuals saving money for retirement purposes. Our goal is to help make sure your savings last as long as you do. Bank on a conservative strategy with predictable earnings to help maximize savings and build your nest egg. Live your dreams...invest for your retirement.
New CARES ACT (Coronavirus Aid, Relief and Economic Security Act)
Effective March 27, 2020
On March 27, 2020, the CARES Act was enacted. Among its numerous provisions designed to help bolster the economy and provide a measure of financial security to Americans as the country battles the coronavirus, the law contains several important provisions designed to provide Americans with increased access to and flexibility with their retirement savings. While some provisions of the CARES Act and other federal relief are available to all individuals, other options are limited to individuals who meet certain criteria. Under the CARES Act, individuals who meet the definition of a “Qualified Individual” are potentially eligible to take advantage of special retirement distribution options (“Coronavirus-Related Distributions”) as well as special retirement plan loan options.
New SECURE ACT (Setting Every Community Up for Retirement Enhancement Act)
Effective January 1, 2020:
- If the customer was turning 70 ½ in 2020, they can now delay taking their RMD until they turn 72.
- The first RMD must be taken by April 1st of the year after they turn 72; every year thereafter (including the year after they turn 72) it must be taken by December 31st of every year.
- If the customer turned 70 ½ prior to January 1st, 2020, they fall under the prior rules of RMDs and cannot skip RMD.
- This will allow those who are already taking their RMD to begin to contribute again if they have earned income (the “in” is separate from the “out”)
- This is for 2020 and beyond only; it does not apply to contributions for 2019
IRS Announces IRA Rollover Rule Game Changer in 2015
Effective January 1, 2015, the IRS began enforcing a new interpretation of the rule that limits the number of nontaxable IRA rollovers. Previously, the IRS allowed one rollover per 12-month period from each IRA an individual owned. Based on the tax code and ruling by the U.S. Tax Court, IRA owners will be allowed to complete only one IRA-to-IRA rollover per 12-months. Regardless of how many IRAs they own. Please contact a tax consultant should you have questions regarding this new rule.
VARIABLE IRA SAVINGS
A Resource Bank Exclusive. Smart savings that earn interest more often than a CD.
- $50 minimum to open
- No maturity
- Unlimited deposits allowed*
- No withdrawal penalty**
- Capitalize interest every 3 months1
- Traditional, ROTH and SEP IRAs available
Increase your savings with predictable interest earnings. A long time favorite.
- $1000 minimum to open
- 12 or 24 month fixed term
- Deposits can be made at maturity*
- Penalty for early withdrawal**
- Traditional, ROTH and SEP IRAs available
- Automatically renewable
*Deposits allowed up to federal IRA guidelines
**Except those set forth by federal guidelines
1Interest rate and yield may be subject to change after account opening.
IRA Frequently Asked Questions
An IRA is an INDIVIDUAL RETIREMENT ACCOUNT. An IRA is a personal savings plan that provides income tax advantages to individuals saving money for retirement purposes.
You invest money in an IRA, up to the amounts allowable under the tax law. These investments are termed "contributions." In many instances an income tax deduction is available for the tax year for which the funds are contributed. The contributions, as well as the earnings and gains from these contributions, accumulate tax-free until you withdraw the money from the account. You therefore enjoy the ability to generate additional earnings, unreduced by taxes on these earnings, each year the funds remain within the IRA.
Any individual can open and make contributions to a traditional IRA, as long as you, or your spouse (if you file a joint return), received taxable earned compensation during the year.
For 2020 your total contributions to all of
and Roth IRAs
cannot be more than: $6,000 ($7,000 if you are
age 50 or older), or your taxable compensation for
the year, if your compensation was less than this dollar limit.
|YEAR||AGE 49 & BELOW||AGE 50 & ABOVE|
Due to the tax advantages of investing through an IRA, it is normally best to try and make the maximum annual contribution. The use-it-or-lose-it nature of contributions makes this all the more important (e.g., If you deposit $3,000 in 2019, you can't deposit $8,000 in 2020 [the $5,500 + the $2,500 you didn't deposit the year before]. You cannot contribute more than the total allowable amount during any fiscal year.)
2020 Combined Traditional and Roth IRA Contribution Limits per www.irs.gov.
If you are contributing the maximum annual amount to your 401(k), IRAs may be your next best investment option for retirement, and are available to anyone with earned income.
Any earnings in a Roth IRA are federally tax free. Earnings in a Traditional IRA are tax-deferred until withdrawn in retirement when they are taxed at your current rate. Contributions to a Roth IRA can be withdrawn at any time. Withdrawals from a Traditional IRA before the age of 591/2 are subject to a 10% federal penalty. Anyone with earned income can contribute to an IRA. Roth IRAs are restricted to those who do not exceed certain modified gross income limits. Traditional IRA contributions may be tax deductible. Roth contributions cannot be deducted.
This is an employer established and funded Simplified IRA, where the employer can put up to 15% of your compensation into a special IRA account. Sole proprietors, the self-employed, may establish these plans for their own benefits.
*The above information is a general overview. Please contact your financial advisor or tax specialist for detailed information. For detailed information on IRAs, visit www.irs.gov and enter IRA in the search bar.