Popular Community Bank offers you Traditional and Roth IRA accounts.
What are IRAs?
- An IRA, or Individual Retirement Account, is an investment tool with tax rules and maximum contribution limits set by the Internal Revenue Service.
- Think of IRAs as long-term savings accounts with tax benefits. These advantages have some limitations, so it’s wise to consult with your tax advisor.
- You may fund your IRA with rollovers from other IRAs, retirement plans, direct contributions or a combination of those. The FDIC guarantees IRAs up to applicable limits.
What types of IRA are available?
There are two main types of IRA:
- Roth IRA
- Traditional IRA
Both have differing tax liabilities and benefits. Your choice will depend on your age, income, financial goals, and government requirements.
|Traditional IRA||Roth IRA|
- Generally, contributions to a Traditional IRA are not taxed until distributed.
- You may be able to deduct some or all of your contributions to a Traditional IRA depending on your personal circumstances.
- Generally, contributions to a Roth IRA are not taxed if you make a qualified distribution based on IRS rules.
- You will not be able to deduct your contributions to a Roth IRA.
||You may be able to make contributions until age 70½ if you have received taxable income during the year.||You may be able to contribute at any age if you have received taxable compensation during the year and your modified adjusted gross income is below certain amounts.|
- You may withdraw contributions and earnings without IRS penalty at 59½.
- Minimum distributions are required by age 70½.2
- Qualified withdrawals may be made without IRS penalty.
- You may withdraw earnings without penalty at age 59½ if your account is at least 5 years old.3
|CD IRA||18-Month Special IRA CD|
|Term||3 months to 10 years||18 months|
|Minimum Opening Deposit||$500||$100|
|Renewal||Change terms at renewal or renew at the same term automatically||Automatically renews into the same term|
|Additional Deposits||No additional deposits until maturity||Allows additional deposits of $100 or more during the term|
Source: https://www.irs.gov/retirement-plans/traditional-and-roth-iras 3If you are under age 59 ½, you may also have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.