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Traditional IRA's

Anyone who is under age 70 1/2 and has earned income can contribute to a Traditional IRA. Contributions may be tax-deductible, and taxes on earnings are deferred until you withdraw funds from the account, thus giving your investments the opportunity to compound faster.  After the age of 70 1/2, account holders are required to begin to withdraw money from their account.  In 2002, the RMD formula changed, please talk to one of our employees to see how this might affect you.

Traditional IRA
Minimum to Open: $250

Contribution Deadline: April 15th of this year for previous tax year.
Tax Advantages
Contributions: Tax-Deductible and subject to restrictions.

Earnings: Tax-deferred.  Accountholders will be taxed when they begin withdrawing the funds.

Withdrawals: Taxable (except withdrawals of non-deductible contributions).
Contributions
Who is Eligible: Anyone with earned income may contribute up to age 70 1/2.

Annual Contribution Amounts: To determine your allowable contribution amount, please see chart below.
  For 2013 & 2014
Individuals under age 50 $5,500
Individuals age 50 and older $6,500

-OR-

100% of your taxable income
(which ever is less)

Withdrawals
Penalty-Free: Withdrawals after age 59 1/2.

Penalty:
- If you do not start Required Minimum Distribution (RMD) withdrawals by age 70 1/2 you will face a penalty. Special distribution rules may apply.
- Withdrawals before age 59 1/2 are subject to a 10% penalty. (Exceptions are listed below).

Exceptions to Penalty:
- Higher education expenses for you or family members. Expenses include tuition, fees, books, supplies and room and board (must be enrolled at least part time).
- First-time home purchase expenses ($10,000 lifetime limit) to buy, build or rebuild a first home for you, your parents, children or grandchildren. You must not have owned a home within the past two years.
- Death or disability
- Certain medical expenses including qualifying health insurance costs for certain unemployed individuals and un-reimbursed expenses exceeding 7.5% of AGI.
- Withdrawals made in equal installments over the account holder's life expectancy.

FDIC Web Site

HUD Web Site