Money Market | Market Index Certificate | IRAs | Term Certificates | back to Savings


Individual Retirement Accounts

At different stages in your life you face different financial needs. Not only is opening an IRA account a safe and secure way to prepare for your retirement, it’s great for saving for other major events such as college tuition, a dream vacation or unexpected emergencies. We have several IRAs to choose from and you may be eligible to deduct your IRA contributions from your taxable income. Check with your tax professional to be sure.

The Traditional IRA – Insured up to $250,000
A Traditional IRA offers three basic benefits: Security for your retirement years; tax-deferred interest until you withdraw your funds (as early as 59 ½); and a possible tax benefit. You can set up and make contributions to a traditional IRA if you, or if you file a joint return, your spouse, received taxable compensation during the year, and you were not 70 ½ years old by year end.

You can have a traditional IRA even if you are covered by another retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer sponsored retirement plan. You can call us at 310-638-2934 to talk with an IRA Specialist.

The annual contribution limit is $4,000 for 2007, and $5,000 in 2008 and hereafter. After 2008, the contribution limit may be adjusted annually for inflation in $500 increments as determined by the IRS. The annual limit applies to any combination of IRA plans other than the ESA. Contributions are fully deductible if you are not an active participant in an employer retirement plan or your income does not exceed certain limitations. Investments grow on a tax-deferred basis. Distributions must begin at age 70 ½. Contributions and earnings are taxed only upon withdrawal.

Catch Up Contributions: Individuals who have reached age 50 by the end of the year will be able to make up additional catch-up contributions of $1,000 per year to their traditional IRA.

The Roth IRA – Insured to $250,000
As long as you have earned income, you can establish and contribute to a Roth IRA even after 70 ½. While contributions are not tax deductible, contributions and earnings can be withdrawn tax free with limitations. The contribution limits are the same as Traditional IRAs. After a five year period, there are no penalties for withdrawals if: You are over 59 ½; death/disability occurs; you have qualified medical expenses; you have certain health insurance; you have qualified college expenses; you are a 1st time homebuyer (up to $10,000); you have an IRS levy or you are making periodic payments.

Unlike traditional IRAs, you are not required to begin taking required minimum distributions after you turn 70 ½. By converting your traditional IRA to a Roth IRA, you can enjoy tax-free withdrawals. However, the amount you convert is subject to income tax now.

Catch Up Contributions: Individuals who have reached age 50 by the end of the year will be able to make up additional catch-up contributions of $1,000 per year to their Roth IRA.

Education Savings Account (Coverdell ESA) – Insured to $100,000
The annual contribution has been increased to $2,000 per beneficiary. This contribution does not account against the limits for IRAs. The designated beneficiary must be an individual under the age of 18. The age 18 limitation will not apply to any designated beneficiary with special needs.

Savings account earnings grow tax free. Your ESA can be used to pay qualified elementary school and secondary school expenses as well as those for higher education.

Catch Up Contributions: There are no catch up contributions.

Distributions must be completed 30 days after beneficiary reaches age 30 or dies.

Click for current dividends