Bippus State Bank - Financial Services for Life

		Health Savings Accounts (HSA)
INDIVIDUAL RETIREMENT ACCOUNTS (IRA)
What’s the difference between Traditional and Roth IRAs? A Traditional IRA allows you to defer taxes on the earnings on your contributions until they are withdrawn.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. A 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.

When am I eligible for either account? With a Traditional IRA, you are eligible if you are younger than age 70-1/2 for an entire tax year and you or your spouse have compensation. With a Roth IRA, you are eligible if you or your spouse have compensation and your modified adjusted gross income (MAGI) does not exceed certain prescribed limits. You may establish a traditional or Roth IRA even if you already participate in or are receiving contributions from a retirement plan sponsored by your employer, which may include certain government plans, tax-sheltered annuities, simplified employee pension (SEP) plans, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE), or qualified plans. More information is available, and we can help you determine which option is best for you. Come in and let’s get started! Click here for current rates.

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