Is an IRA Right For You? Take our Farmers State Bank IRA Test and find out. Then call one of our customer service representatives today at 785-672-3251.
Roth IRA
There is no age limit to contribute to a ROTH Individual Retirement Account and contributions can continue each year as long as the individual has earned income, files a tax return and meets the modified adjusted gross income limit. You cannot deduct a contribution to a Roth from your income tax, but earnings may be tax free and penalty free after a five-year period has been met and the distribution is considered qualified. The five-year period begins from the year of the first annual contribution into a ROTH IRA. Principal contributions to a ROTH can be withdrawn at anytime and will not receive the 10% premature distribution penalty by the IRS.
Traditional IRA
You might also be able to save on your present taxes with an Individual Retirement Account, by deducting your qualified contributions from your taxable income. Many Americans can deduct all or part of their IRA contributions from current income taxes. The deductible amount depends on your income, marital status and whether you're an active participant in an employer sponsored plan as defined by the Internal Revenue Service.
With an Individual Retirement Account, you may also be able defer taxes until you retire when you will probably be in a lower tax bracket. The chart below shows you how much you may be able save each year. You may want to consult your tax advisor to review the tax deductible status of an IRA. Regardless of the amount you'll be able to save now on taxes, an IRA is a smart way for you to save for a secure retirement.
If You're Changing Employers, An IRA Rollover Makes Sense. If you are retiring or changing jobs and anticipate withdrawing money from your employer's retirement plan, you can avoid withdrawal penalties by transferring your assets into an IRA or another qualified plan. You can ask your employer to arrange for a "direct rollover" of your money into a new IRA account with us, or you can do it yourself with an IRA-to-IRA rollover.
