Secure your future with an Individual Retirement Account
Is an IRA right for you? Whether you need to rollover a 401(k) or you’re just starting to save for retirement, First National Bank of Moose Lake offers different types of Individual Retirement Accounts for your consideration. All IRAs are invested in an 18 month Certificate of Deposit (CD). Your choice of a Traditional IRA or a Roth IRA will have different tax advantages.
Traditional IRAs*
- Contributions to a Traditional IRA may be tax-deductible, up to 100%, but distributions are generally taxable.
- Earnings grow tax deferred.
- Distributions are required to be taken by Traditional IRA holders beginning at age 72.
- Distributions are generally taxable, but are penalty-free if withdrawn under one of the following circumstances:
- Attaining age 59 ½;
- Incurring a disability;
- Payment for certain health insurance, medical expenses, and higher education expenses;
- Payment for first-time homebuyer expenses;
- Death (payments to beneficiaries); or
- Being a qualified military reservist.
- Adversely affected by COVID-19
- Qualified birth or adoption expenses
Roth IRAs*
- Contributions to a Roth IRA are not deductible.
- Earnings can grow tax free.
- Contributions can generally be distributed tax free at any time.
- Distributions are not required by Roth IRA holders, though beneficiaries may be subject to required distributions.
- Earnings can be distributed tax free if the Roth IRA holder first made a Roth IRA contributions at least five years ago, and one of the following events occurs:
- Attaining age 59 ½;
- Incurring a disability;
- Payment for first-time homebuyer expenses; or
- Death (payments to beneficiaries)
- Adversely affected by COVID-19
- Qualified birth or adoption expenses
| Account Detail | Traditional IRA | Roth IRA |
|---|---|---|
| Age Limit to contribute | None | None |
| Income Limits | Earned Income | Can’t exceed annual income for Modified Adjusted Gross Income (MAGI) limits |
| Contributions may be tax-deducible | Yes | No |
| Pay taxes on distributions | Yes | No (as long as all requirements are met) |
| Penalties on distributions before 59 1/2 | Yes 10% federal tax (penalty) |
Yes (10% federal tax penalty) |
| Required minimum distributions | Yes | No |
IRA Rollover*
We can help you can transfer assets from a previous, employer-sponsored retirement account plan, like a 401(k), to a traditional IRA.
*Consult your tax advisor, legal counsel, and/or insurance agent for advice and information concerning your particular situation and your eligibility for IRAs. First National Bank of Moose Lake representatives may not give legal or tax advice. Please contact our Personal Banker at 218-485-4441 to learn more about our IRAs.
