Individual Retirement Accounts (IRAs)

Anna State Bank offers Traditional, Roth, and Rollover IRAs to help prepare you for retirement.

Traditional IRA

If you are younger than age 70 ½ for the entire tax year, and have compensation, you are eligible to establish and make an annual tax-year contribution.

Deductibility of your contribution is based on whether you and/or your spouse, if married, are an active participant in an employer-sponsored retirement plan. Your tax or legal professional can help you determine the actual deduction.

All earnings on your IRA contributions (deductible and/or nondeductible) remain tax deferred until you make withdrawals from the account.

If you have attained age 50 or older by the end of your taxable year, you are eligible to make catch-up contributions.

Distributions can be taken at 59 ½ without penalty. The early distribution penalty tax can be avoided under certain circumstances.

When you reach 70 ½, you must begin to take required minimum distributions or severe tax penalties will apply.

Roth IRA

An individual retirement account that allows nondeductible contributions but features tax-free withdrawals for certain distribution reasons after a five-year holding period. The term “tax-free” means free from federal income taxes.

Provided you take the earnings of your Roth IRA as part of a qualified distribution, you pay no taxes on any of the earnings that your contributions have generated.

For a given taxable year, you can open and fund a Roth IRA any time between January 1 and the date your tax return is due for the year.

Traditional IRA assets may be converted to a Roth IRA. The distribution is subject to income tax, but is not subject to the 10 percent premature-distribution penalty tax.

If you have attained age 50 or older by the end of your taxable year, you are eligible to make catch-up contributions.

Assets held in a Roth IRA are not subject to age 70 ½ required minimum distributions.

Rollover IRA

A rollover, direct rollover, or transfer of your assets between eligible retirement plans allows you to move assets from one tax-advantaged retirement plan into another. This will allow you to avoid possible income and penalty taxes and continue tax-deferred growth until withdrawn.

A rollover occurs when IRA assets are paid directly to you and you contribute them to an IRA within 60 calendar days of receipt. The 60-day period begins the day after you receive the distribution.

A transfer occurs when IRA assets move directly from one IRA to another IRA without your direct control or custody of those assets.

A direct rollover is like an IRA-to-IRA transfer in that an employer plan distribution is paid directly to an IRA or another qualified employer plan without your direct control or custody of the assets. Direct rollovers to Traditional IRAs incur no federal income tax or penalties.

Contact our Account Specialist for more details.