IRA
Save for your retirement with an Individual Retirement Account (IRA)
Traditional IRAs
Ideal for wage earning employees, contributions may be tax-deductible and interest earned is tax-deferred until retirement (or when funds are withdrawn).
- The maximum annual contribution limit for 2024 is $7,000.
- The maximum annual contribution limit for 2025 is $7,000.
- Customers 50 years or more can make additional catch-up contributions of $1,000 annually.
- Required minimum distributions begin at age 73; however, customers may start to take distributions at age 59-1/2 without penalty.
See how much you could potentially save on your taxes based on your tax bracket:
| Tax Bracket: | 12% | 24% | 32% | 35% | 37% |
|---|---|---|---|---|---|
| IRA Deductible Contribution Amount: | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential |
| $1,000 | $120 | $240 | $320 | $350 | $370 |
| $2,500 | $300 | $600 | $800 | $875 | $925 |
| $5,000 | $600 | $1,200 | $1,600 | $1,750 | $1,850 |
| $6,500 | $780 | $1,560 | $2,080 | $2,275 | $2,405 |
Roth IRAs
Roth IRAs are a great way to supplement your retirement savings–especially for families planning to buy their first home or individuals who don’t qualify for a traditional IRA. Unlike a traditional IRA, contributions are not tax-deductible and are made with after-tax funds, so you can withdraw your contributions at any time without penalty.
- The maximum annual contribution limit for 2024 is $7,000.
- The maximum annual contribution limit for 2025 is $7,000.
- Customers 50 years or more can make additional catch-up contributions of $1,000 annually.
- Earnings distributions can be made tax-free at age 59-1/2 if the funds have been in the IRA for five years or more. There are no mandatory minimum distributions. Tax-free distributions due to death or disability or for the purpose of buying your first home are also allowed at any time.
Changing Employers or Retiring?
Avoid withdrawal penalties by transferring your assets to a TSB IRA or another qualified plan. Ask your employer to arrange for a “direct rollover” of your retirement savings into a new IRA account with us, or you can do it yourself with an IRA-to-IRA rollover. Rollovers must be completed within 60 days from the date you receive the assets from your old retirement savings account or IRA to avoid the mandatory 20% withholding and other possible penalties.
Please consult your tax advisor regarding your specific situation and the deductibility of your contributions.
