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Take advantage of potential tax benefits by investing in an Individual Retirement Account (IRA) today! An IRA is a smart investment tool. Unlike other savings and investment programs, contributions may be tax deductible and can grow tax free or tax deferred. Best of all, your Wheatland Bank IRA deposits are fully insured up to $250,000 by the FDIC – and separately from any other non-retirement deposits you may have with us.
The Traditional IRA is a tax deferred savings plan that allows you to save for retirement. You are eligible to contribute to a Traditional IRA if you have earned income (compensation or alimony) and have not reached the age of 70½ prior to the tax year-end. Contributions are made up to a specified limit with the contribution tax deductible up to the phase-out limitation. Money invested and earned in a traditional IRA is subject to income taxes at the time of withdrawal. Withdrawals can be made without penalty once the age of 59½ is reached and withdrawals are required once the age of 70½ is reached.
A Roth IRA is similar to the Traditional IRA, with some added benefits for age and income levels. Unlike Traditional IRAs, with a Roth IRA you can contribute beyond the age of 70½ as long as you have earned income. Contributions to Roth IRAs are not tax deductible, however unlike Traditional IRAs, contributions and earnings can be withdrawn tax-free*. Additionally, with Roth IRAs you are not required to begin taking required minimum distributions at age 70½.
If you reach the age of 50 by the tax year-end, you can make additional catch-up contributions of $1,000 each year to both Traditional and Roth IRAs**.
A Coverdell Education Savings Account (ESA) is a great way to save for upcoming education costs. Coverdell ESAs can be used for elementary, secondary or higher education costs. With a Coverdell ESA, $2,000 can be contributed each year for each beneficiary under age 18 or under the age of 30 for those with special needs. Coverdell ESAs are separate from contributions made to your IRA account(s), allowing you to make additional contributions.
Qualifying expenses for beneficiary include enrollment or attendance at public or private school (elementary or secondary); post-secondary tuition, fees, textbooks, supplies and equipment; and post-secondary room and board expenses (beneficiary must be enrolled at least half-time).
*Restrictions may apply. Information is accurate as of March 2009 and is not intended to provide specific advice or recommendations. Check with your legal or tax advisor for specific detail regarding your situation and for current information.
**The total contributions allowed per year to all IRAs are limited.
Contact your local branch today to start saving for tomorrow.