Individual Retirement Accounts (IRAs)

There are advantages to both traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.

Traditional IRA

• No income limits to open
• No minimum contribution requirement
• Contributions are tax deductible on state and federal income tax¹
• Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
• Withdrawals can begin at age 59½
• Early withdrawals subject to penalty²
• Mandatory withdrawals at age 73

Roth IRA

• Income limits to be eligible to open Roth IRA³
• Contributions are NOT tax deductible
• Earnings are 100% tax free at withdrawal¹
• Principal contributions can be withdrawn without penalty¹
• Withdrawals on interest can begin at age 59½
• Early withdrawals on interest subject to penalty²
• No mandatory distribution age
• No age limit on making contributions as long as you have earned income

¹Subject to some minimal conditions. Consult a tax advisor.

²Certain exceptions apply, such as healthcare, purchasing first home, etc.

³Consult a tax advisor.

Help your student prepare for college. A Coverdell ESA provides a safe, tax-free place to build savings early for education expenses — free of setup and annual fees.

• Set aside funds for your child’s education
• No setup or annual fee
• Interest grows tax-free
• Withdrawals are tax-free and penalty-free when used for qualified education expenses¹
• Designated beneficiary must be under 18 when contributions are made
• To contribute to an ESA, certain income limits apply²
• Contributions are not tax deductible
• $2,000 maximum annual contribution per child
• The money must be withdrawn by the time he or she turns 30³
• The ESA may be transferred without penalty to another member of the family
• Minimum deposit depends on account

¹Qualified expenses include tuition and fees, books, supplies, board, etc.

²Consult your tax advisor to determine your contribution limit.

³Those earnings are subject to income tax and a 10% penalty.

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*Annual Percentage Yield (APY) assumes interest will remain on deposit for one year.

Early withdrawal penalties apply for certificate accounts.

*Consult a tax advisor.