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TraditionalIRAs
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Setting aside money each year into an IRA is a proven way to help supplement retirement savings. Traditional IRAs from Oregon Coast Bank offer tax-deferred savings opportunities. You will not pay taxes on the earnings and in some cases on the contributions, until you choose to take distributions from the account. We offer fixed and variable rate Traditional IRAs with a variety of terms available.
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You should consider a Traditional IRA if you are eligible to deduct your contribution and you anticipate your tax rate at the time of distribution will be lower than your current tax rate. One of the biggest reasons that investors choose a Traditional IRA over a Roth IRA is the opportunity to take a tax deduction on the IRA contribution, which can lower your current tax bill. Keep in mind - investors under the age of 70 1/2 with earned income can still contribute to a traditional IRA even if they don't qualify for the tax deduction.
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You may qualify for a full or partial deduction of your Traditional IRA contribution in the following circumstances:
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You or your spouse are not covered by an employer sponsored plan.
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Or, you as an individual are covered by an employer sponsored plan and your MAGI is $53,000 - $63,000 (filing singly), $85,000 - $105,000 (filing jointly), $0 - $10,000 (married couples filing separately).
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Contribution Limits - For 2008 and 2009, the contribution limit for those under the age of 50 is $5000. For those over the age of 50 the limit is $6000.
If you are 50 years of age or older, you may be able to take advantage of a "catch-up" provision and set aside additional funds.
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Other considerations with Traditional IRAs:
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Any earnings and deductible contributions are subject to tax upon distribution.
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Taxable distributions before age 59 ½ may be subject to a 10% penalty tax. Exceptions to the penalty include distributions due to death, disability, substantially equal periodic payments, eligible medical expenses, certain unemployed individual's health premiums, limited "first-time" home purchase, qualified higher education expenses or IRS levy. See your tax advisor for details before making any contributions.
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Required minimum distributions must start at age 70 ½.
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RolloverIRAs
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When you leave a job or retire, you are allowed to "roll over" funds from an employer-sponsored plan, such as a 401(k) or pension plan, into a Rollover IRA. You can also move funds from other IRA providers into an Oregon Coast Bank Rollover IRA.
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Rollover IRA Benefits:
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Ensures that your retirement investments will remain tax-deferred and free from penalties.
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Provides convenient access to your money when you decide to take distributions.
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RothIRAs
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Roth IRAs are a great way for individuals to save for retirement because the earnings on your investment are free from federal income taxes as long as certain conditions are met. At Oregon Coast Bank we offer fixed and variable rate Roth IRAs with a variety of terms available.
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Roth IRA Benefits:
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Contributions can be withdrawn anytime without taxes or penalties
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Distributions, interest, and dividends are tax-free if you are at least 59 ½ and the account has been established for longer than five years
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You can contribute after age 70 ½ as long as you have earned income
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There is no required minimum distribution during your lifetime
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Tax-free distributions can be passed to your beneficiaries
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Tax-free earnings up to $10,000 for the purchase of a first time home, after you have had the account for at least five years - this benefit may be applied to yourself or your children
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You Should Consider a Roth IRA if:
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Your income does not exceed $169,000 for married taxpayers or $116,000 for single taxpayers
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You want tax-free earnings
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You are already saving for retirement with an employer-sponsored plan
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You want to invest for retirement but may need to access your savings
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Contribution Limits - For 2008 and 2009, the contribution limit for those under the age of 50 is $5000. For those over the age of 50 the limit is $6000.
If you are 50 years of age or older, you may be able to take advantage of a "catch-up" provision and set aside additional funds each year.
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SEPIRAs
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If you own your own business, a Simplified Employee Pension (SEP) Plan is a great option for retirement savings. SEP IRAs are easy to establish and maintain, and offer tax-deductible contributions (from 0% to 25% of annual compensation) for you and all your eligible employees. At Oregon Coast Bank we offer fixed and variable rate SEP IRAs with a variety of terms available.
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SEP IRA Benefits:
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Setup is easy-the employer completes Form 5305-SEP a one-page IRS form, and employees complete the IRA application.
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Contributions are deductible as a business expense for the employer
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Employees enjoy tax-deferred earnings
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All SEP employer contributions go into a Traditional IRA in the name of the employee, relieving the employer of having to oversee the assets after they are contributed
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