Individual Retirement Account (IRA)

Individual Retirement Account (IRA)

While retirement might seem light years away, your golden years are closer than you think. Don't put off building your nest egg another year. Start saving now, while you're still earning income.

IRAs offer a tax-advantaged* way to save, and we offer different plans for different financial situations. Come see a Farmers representative about opening the right account for you.


Summary
  • Save for retirement with tax-advantages*
  • Choose between traditional or Roth IRA
  • Educational IRA available to save for higher education
  • Earn higher interest than regular savings
  • No set up or annual fees
  • Early withdrawal applies before age 59½
  • FDIC insured
  • No minimum opening deposit

*Consult your tax advisor.

Traditional vs. Roth

Traditional IRA

  • Anyone under age 70½ may open
  • Contributions are tax deductible on state and federal income tax*
  • Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
  • Withdrawals can begin at age 59½
  • Early withdrawals subject to penalty**
  • Mandatory withdrawals at age 70½

*Consult with a tax advisor

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

Roth IRA

  • Contributions are NOT tax deductible
  • Earnings are 100% tax free at withdrawal
  • Principal contributions can be withdrawn without penalty*
  • Withdrawals on interest can begin at age 59½
  • Early withdrawals on interest subject to penalty**
  • No mandatory distribution age

*Subject to some minimal conditions.

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

Education (Coverdell)

A Coverdell Education Savings Account (CESA) provides tax-free earnings when the funds are used for a child's education expenses.

There are no age or compensation requirements to open and contribute to a CESA; you do not even need to be related to the child you are contributing for. The interest is 100% tax free and withdrawals can be made at any time when used for qualified education expenses.

  • No annual fee
  • Interest grows tax free
  • Withdrawals tax free when used for qualified education expenses*
  • Contributions are not tax deductible
  • Contributions can be made until the child is 18 years old
  • Funds must be distributed when recipient reaches age 30
  • Contributors do not have to be related to recipient
  • FDIC insured

*Qualified expenses include tuition and fees, books, supplies, board, etc.