Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs)

It's never too early or too late to start saving for retirement. Salal makes it easy to create a tax-deductible and tax-deferred retirement account with traditional and Roth IRAs available. IRAs can be invested in IRA savings and/or IRA certificates. This brochure may help you better understand your IRA options.

Traditional

With traditional IRAs your earnings are tax-deferred until you withdraw the funds at retirement. Your earnings are then taxed at your current income rate.

  • Annual contributions are potentially tax deductible*
  • You can still make an IRA investment even if you have other retirement investments
  • Earnings are tax deferred until withdrawal
  • Withdrawals can be made without penalty once you reach 59½
  • Mandatory withdrawals begin when you reach 70½
  • Other withdrawals may also be penalty-free, such as first time home buying, disability, or higher education.

This brochure provides additional information about traditional IRAs.*


*Consult with your tax advisor for eligibility requirements and contribution limits on IRAs.

Roth

You invest in Roth IRAs with after-tax income, meaning you pay tax on your contributions now, but your earnings are tax free at withdrawal.*

  • Contributions are not tax deductible
  • Pay no income tax upon withdrawal
  • You may withdraw contributed funds at any time without penalty
  • Earnings can be withdrawn penalty-free at age 59½
  • No mandatory withdrawals at age 70½
  • You may continue contributions beyond age 70½

For more information on Roth IRA eligibility, click here.


Still have questions? More answers may be found here.


*Consult with your tax advisor for eligibility requirements and contribution limits on IRAs.

Education

While not really IRAs in the traditional sense, education IRAs (also called Coverdell Education Savings Accounts) are very useful. Contributions go into a custodial account for the benefit of a child to pay his or her future education expenses.

  • Interest grows tax free
  • Withdrawals are tax free when used for qualified education expenses*
  • Maximum annual contribution of $2,000
  • Beneficiary must be under 18 at time of opening
  • Beneficiary does not have to be a relative
  • Can be used for public or private schools
  • Can be used for college, high school, grade school, etc.

Read this brochure for additional information regarding Coverdell Education Savings Accounts.


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

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