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Highlights on the unique tax benefits of an IRA
The Roth IRA
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may be withdrawn penalty-free, for college educationexpenses, or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. Refer to the Contribution Limits Chart to determine
the amount you may contribute each year. Check with a Personal Banker
for details on current income eligibility requirements.
The Traditional
IRA
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. (Withdrawals prior to
investment maturity may be subject to bank penalty.)Refer to the Contribution
Limits Chart to determine the amount you may contribute each year.
Check with a Personal Banker for details on current income eligibility
requirements.
Contribution Limits:
| Year | 2007
|
2008 |
2009 |
| Amount | $4,000 |
$5,000 |
$5,000+* |
| Year | 2007 |
2008 |
2009 |
| Amount | $1,000 |
$1,000 |
$1,000+* |
Additional Retirement Options
SIMPLE IRA
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 nonelective 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 (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.
For more information on a SIMPLE IRA or SEP, call (402) 323-1777,
or toll free (800) 297-2837.
For an IRA comparison chart, click here.