IRAs
IRAs are a smart, tax-deferred way to save money for retirement—or, in some cases, for your children’s college. They are especially good if you’re not covered by a company pension or would like another investment option to supplement your retirement. There are three types of IRAs: traditional IRAs; Roth IRAs and Education IRAs. Ask us which is best for you. We’ll be happy to help you.
Use this calculator* here to help estimate your savings, and guide your goals.
Traditional IRA
If you’re under age 701/2 with earned income, you’re eligible to make a contribution to a Traditional IRA, regardless of your income level. This account allows you to make pre-tax contributions and defer taxes on their earnings until they are withdrawn when you are near retirement. This reduces your overall tax payments—provided your tax rate is lower at the time of withdrawal than when you invest, which is true for many people. Only invest in an IRA if you are sure you will not need to withdraw the money early, as an expensive penalty will apply.
• Certain contributions are tax deductible in the tax year for which they are made.
Roth IRA
Roth IRAs differ from traditional IRAs because the contributions are made in after-tax dollars. The money grows tax deferred, and if you meet certain requirements, you get to take the money out of retirement income-tax free.
· 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 want to consider a Roth IRA.
· A Roth IRA can be a powerful tool to build wealth for your estate and give the benefit of tax-free income to your heirs, too.
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SEP
A SEP (Simplified Employee Pension) plan is a retirement plan that is ideally suited to small businesses. These plans are funded by the employer to an employee’s IRA. SEPs may be established by owners of businesses (incorporated or unincorporated), sole proprietors, and partnerships. SEP plans are especially popular with independent contractors and sole proprietors.
Contact your local branch for current rates.
For more information or to sign up, contact your local Pinnacle Bank today.
*This calculator is to be used for estimation purposes only. Years to reach saving goals are based on interest compounded monthly. We are showing you your potential account balance based on the amount invested, selected interest rate and length of time you choose to grow your savings. Since it is up to customers to correctly input rates and terms the financial institution is not responsible for its accuracy and the results are not guaranteed. Rate changes weekly. Interest credited monthly. Average daily collected balance method used to calculate interest. For current rates, contact your local Pinnacle Bank today.