Individual Retirement Accounts (IRA)
Individual Retirement Accounts (IRAs) are special savings plans to help customers accumulate funds for retirement years.
- Traditional IRA - allows you to defer taxes on the earnings on your contributions until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which you make them.
- Roth IRA - allows only nondeductible contributions and features tax-free withdrawals for certain distribution reasons after a five-year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, if you expect to be in a higher tax bracket when you retire, you may benefit more from a Roth IRA than from a traditional IRA.
- Coverdell Education Savings Account - is a nondeductible account that features tax-free withdrawals for a very specific purpose - a child's education expenses.