Individual Retirement Accounts
Get started on the path to the retirement you want.
Depending on the type of IRA you choose, contributions may be tax-deductible and will grow either tax-deferred or tax free!
| Traditional IRA | Roth IRA | |
|---|---|---|
| Age Anyone with Earned Income Can Contribute | Anyone, regardless of income level, even after age 72. | Anyone, even after age 72. |
| Spouses with One Earned Income Can Contribute For Both |
Yes | Yes |
| Contributions After Age 72 | Allowed | Allowed |
| 2023 Maximum Annual Contributions (The maximum can be contributed to one IRA type or the other – or – split between both. For ages 50 and over, the amount includes $1,000 catch-up). |
Under 50 - $6,500 50 and Over - $7,500 |
Under 50 - $6,500 50 and Over - $7,500 |
| 2022 Maximum Annual Contributions (The maximum can be contributed to one IRA type or the other – or – split between both). |
Under 50 - $6,000 50 and Over - $7,000 |
Under 50 - $6,000 50 and Over - $7,000 |
| Catch-up Contribution Limits for Anyone Age 50 and Over | Up to $1,000 | Up to $1,000 |
| Contribution Restrictions (May be limited depending on your Modified Adjusted Gross Income) |
Yes (If active participant in employer retirement plan) |
Yes |
| Contribution Deadlines (Contributions can be made between Jan 1 and the date your tax return is due for that tax year, excluding extensions). |
Typically, April 15 of the following year |
Typically, April 15 of the following year |
| Earnings | Grow tax-deferred until withdrawn | Grows tax-free |
| Taxes Upon Withdrawal | Withdrawals are taxed as income |
No (Unless taxed for early withdrawal) |
| Tax Advantages | Yes (Deductible contributions tax-deferred until withdrawal) |
Yes (Qualified withdrawals are tax-free after age 59½ and 5 years invested) |
| Tax Deductibility for Contributions | Yes (Tax deferred up to 100% depending on MAGI and participation in an employer-sponsored retirement plan) |
No (Taxes are paid up-front) |
| Most Withdrawal Restrictions Before Age 59½ Result in IRS Penalties. | Yes | Yes |
| IRS Penalty for Early Withdrawal. None if: • Over age 59½ • Qualified medical expenses • First-time home purchase (up to $10,000) • Child Birth/Adoption (up to $5,000) • Death or disability • Qualified college expenses • Due to IRS levy See your tax advisor for other distribution options. |
Yes | Yes |
| Bank Penalty for Early Withdrawal Penalties Apply | Yes | Yes |
| Required Distributions | Yes (Must begin when participant turns 72)* |
Yes (After death of the participant) |
| Age at Which Withdrawals Must Begin | 72* | N/A |
*Unless IRA owner was born prior to July 1, 1949, then required distributions must begin April 1st of the year following the year they attain age 70½.
Refer to First Bank of the Lake’s Truth in Savings Disclosure for additional account information. Please ask a Personal Banker for current rate information. Information for this chart was obtained from the IRS website. Where language is unclear, assumptions have been made. Investors must consult with their tax advisor or legal counsel for advice and information concerning their particular situation. Representatives of this bank may not give legal or tax advice.
Refer to First Bank of the Lake’s Truth in Savings Disclosure for additional account information. Please ask a Personal Banker for current rate information. Information for this chart was obtained from the IRS website. Where language is unclear, assumptions have been made. Investors must consult with their tax advisor or legal counsel for advice and information concerning their particular situation. Representatives of this bank may not give legal or tax advice.