An Individual Retirement Account is a great way to start preparing financially for your retirement or your child's education. An IRA is a personal savings plan that provides income tax advantages to individuals saving money for future use.
A Traditional IRA is a tax-advantaged arrangement that allows earnings and deductible contributions to grow tax-deferred. That means you don't have to pay any income taxes on the earnings and deductible contributions of your IRA until you start taking withdrawals.
Contributions may be deductible from your gross income on your federal income tax return for the year in which the contributions are made.
Generally, earnings and gains in your IRA are not taxed until distributed. In some cases, amounts are not taxed at all if distributed according to IRA rules. Investments that are made in FirsTier Bank CDs are FDIC insured and there are no fees on these accounts
A Roth IRA allows you to accumulate earnings on a tax-deferred basis and to withdraw earnings tax-free for qualified distributions. Roth IRA contributions are not deductible from your gross income. However, since you have already paid taxes on the money you've contributed, contribution dollars can be withdrawn at any time without tax consequences.
Earnings can be withdrawn tax and penalty free if the IRA has been in existence for at least 5 years and the distribution is being made for one of the following:
- You are at least 59 ½ years old
- After your death
- You have become disabled
- To purchase or construct your first home ($10,000 maximum)
Investments that are made in FirsTier Bank CDs are FDIC insured and there are no fees on these accounts.