Individual Retirement Accounts (IRAs) are special savings plans to help you accumulate funds for retirement years. No matter how near or far you are from celebrating your last day of work, time is on your side when it comes to saving.
And with IRAs, you may be eligible to take advantage of special tax treatments to potentially reduce your bill to the IRS either now or in the future. The Farmers Bank is here to help you choose the right accounts to maximize your retirement plan.
Choosing the right IRA for your future
There are two different types of IRAs to pick from at The Farmers Bank. And each one comes with its own distinct set of benefits.
- Traditional IRA - allows you to defer taxes on the earnings on your contributions until they are withdrawn.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.
Not sure which option is the right one? Give us a call to help figure out what benefits you qualify for and how either IRA may fit into your broader financial plan.
Alternative options for saving
Looking for a way to save for your child's college education? Consider a Coverdell Education Savings Account from The Farmers Bank. It's similar to a Roth IRA in that it is a nondeductible account that features tax-free withdrawals.
The difference? Those tax-free withdrawals must be for a very specific purpose - a child's education expenses. This is a great way to skip paying taxes on your earned interest and have more funds available to help pay for school.
Reaching your financial goals with The Farmers Bank
The Farmers Bank regularly helps Central Indiana residents find the right mix of accounts that feature low-risk growth and tax benefits. Our expert team of bankers is here to help you discover which IRAs and education accounts you're eligible for and how they make work into your other savings strategies.
Contact us today and get started!