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Few things are more important than financial security in your retirement years. You’ve worked hard, so we want to help make your future as worry-free as we can. To help you save for your retirement, we offer several different types of Individual Retirement Accounts (IRAs).
These plans offer different tax advantages, including tax-deferred and even tax-free earnings. Take a look at your options. If you have questions — or you’re ready to get started — contact us or stop by your local CSB branch.
Current rates available upon request.
A Traditional IRA is any IRA that is not a Roth IRA, a SIMPLE IRA or a Coverdell Education Savings Account. This was the original IRA.
There are two advantages of a traditional IRA:
Unlike a Traditional IRA, you can’t deduct contributions to a Roth IRA. However, if you satisfy the requirements, qualified distributions are tax free.
Other advantages include:
To be a Roth IRA, the account must be designated as such when it is set up. Neither a SEP-IRA nor a SIMPLE IRA can be designated as a Roth IRA.
The CESA, formerly the Education IRA, is not really an IRA at all. It was created as part of the Taxpayer Relief Act of 1997 to help families save for their children’s college.
Distributions from the IRA are tax-free and penalty-free for qualified higher-education expenses. The CESA allows annual aggregate contributions of $2,000 per child.
A SEP is a written arrangement (a plan) that allows an employer to make deductible contributions for the benefit of participating employees. The contributions are made to a Traditional IRA set up for a participant in the plan.
Self-employed individuals as well as other employers can set up SEP plans. A SEP plan allows an employer to make contributions toward employees’ retirement and, if self-employed, his or her own retirement, without becoming involved in more complex retirement plans.