Traditional Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) offers tax-deferred interest earnings to the customer planning for his or her retirement. You and your spouse can contribute up to the defined limits each year, with the taxes on any interest earned postponed until the money is withdrawn. What’s more, the contribution itself may be tax deductible that year.*
At United Bank, our customers can make withdrawals from their traditional IRAs without being penalized once they become the age of 59½. When you reach this age, we make sure to follow up and keep you informed of your impending dates, so you never miss out on any distribution requirements.
If you have specific goals for investing your assets, we offer a self-directed IRA that allows you to control the direction of your own assets while receiving our expertise.
Planning for the future means thinking through the long-term implications of your savings. Your retirement savings strategy may include a Roth Individual Retirement Account, sometimes referred to as a “back-ended” IRA.
Here’s how it works:
- Set aside money that you’ve already paid taxes on (unlike the “traditional” version, contributions to a Roth IRA are not tax-deductible).
- Watch your money grow over time as you continue to invest and earn a return.
- When you are ready take distributions, you’ll enjoy your earnings tax-free.
A Roth IRA also provides more flexibility when it comes to access to your retirement savings. You can withdraw your contributions (not earnings) at any time without receiving a penalty, regardless of age. This is especially beneficial if retirement is still a long way off. This gives you the freedom to access your money if you need it without having it locked away until retirement.
United Bank can guide you to Wealth Management Advisors to help you manage your Roth IRA, suggesting investment options based on your time horizon, risk tolerance, available savings, and other factors. We can also help you “roll over” funds from other existing retirement accounts, such as your 401(k), Simplified Employee Pension (SEP) plans, or “traditional” IRA accounts.
If you are 49 years old or younger, you can contribute a maximum of $6,000 in 2020. If you are 50 years old or older, you can contribute up to $7,000 in 2020. Contributions may be lower for taxpayers with higher incomes. See IRS guidelines for contribution limits by visiting https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits.
Once you reach a certain age, you must begin taking annual distributions from your traditional IRA. The IRS has recently made changes to this age definition. Based on your birthday, it is either 70 ½ or 72 years of age. We recommend referring to the following link for more information: https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans.
Roth IRAs do not require withdrawals until after the death of the owner.
For more information about IRAs and the different options available, contact a United Bank IRA Specialist at 770.567.7211.