An Individual Retirement Account (IRA) can be a wonderful savings option to ensure you have an enjoyable, worry-free retirement. Aside from securing your financial future, you may also be eligible for tax advantages for yourself and your loved ones. Farmers Savings Bank offers the following Individual Retirement Accounts:
Traditional IRA
It is never too late to start preparing for retirement. The traditional IRA1 is one of the most common IRAs available. This type of IRA is funded with pre-tax contributions or rollovers, and the tax on contributions and growth (interest) is deferred until withdrawn.
- No income limits to open
- No minimum contribution requirement
- Contributions are tax deductible on state and federal income tax1
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Withdrawals can begin at age 59½
- Early withdrawals subject to penalty2
- Mandatory withdrawals at age 72
- FDIC Insured
1As always, Farmers Savings Bank recommends that you consult with your tax or financial advisor prior to making financial decisions. Certain exceptions apply to early withdrawal, such as healthcare, purchasing your first home, and others. If you close your account before interest is credited, all accrued interest will be paid.
Roth IRA
Roth IRA's may be opened if you or your spouse have compensation and your modified adjusted gross income (MAGI) for any tax year cannot exceed certain prescribed limits. These limits are subject to annual cost-of-living adjustments (COLAs), if any. Earnings on the account may grow tax free if certain conditions are met.
- Income limits to be eligible to open Roth IRA1
- Contributions are NOT tax deductible
- Earnings are 100% tax free at withdrawal1
- Principal contributions can be withdrawn without penalty1
- Withdrawals on interest can begin at age 59½
- Early withdrawals on interest subject to penalty1
- No mandatory distribution age
- No age limit on making contributions as long as you have earned income
- $25 minimum to open
- FDIC Insured
1As always, Farmers Savings Bank recommends that you consult with your tax or financial advisor prior to making financial decisions. Certain exceptions apply to early withdrawal, such as healthcare, purchasing your first home, and others. If you close your account before interest is credited, all accrued interest will be paid.
Coverdell Education Savings Account
Farmers Savings Bank offers Coverdell Education Savings Accounts to those wanting to save for a child's education expenses, such as college, secondary or elementary school. Withdrawals are tax-free when used for qualifying expenses such as tuition, books, supplies, etc.
- Interest grows tax free
- Withdrawals are tax free if they meet education qualifications
- Contributions are not tax deductible
- No income restrictions or limits to open
- Beneficiary must be under the age of 18 at the time of opening
- Beneficiary does not have to be a relative
- Account must be closed by age 30
- FDIC Insured
*As always, Farmers Savings Bank recommends that you consult with your tax or financial advisor prior to making financial decisions. Withdrawals are tax-free when used for qualifying expenses such as tuition, books, supplies, etc. If you close your account before interest is credited, all accrued interest will be paid.
Health Savings Account (HSA)
High deductible health plans and medical expenses require forethought to avoid a big hit to the budget should medical needs arise. Plan ahead and start saving now with a health savings account at Farmers Savings Bank.
A Health Savings Account (HSA) is a tax-advantaged medical savings account available to those who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an HSA are not subject to federal income tax at the time of deposit. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty.