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Planning
for Retirement |
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| TRADITIONAL
IRA |
| ROTH
IRA |
| COVERDELL
IRA |
| SEP
IRA |
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| We
understand the importance of security in your retirement years and
we want to help make those years financially worry free. That is
why we offer many types of Individual Retirement Accounts (IRAs)
to help you save for your retirement.
These plans offer different Tax advantages including Tax-Deferred
and even TAX-FREE earnings. Contact
us for free brochures on any of the above types of IRAs or contact
Community State Bank at 262.878.3763. |
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Traditional
IRA
A
traditional IRA is any IRA that is not a Roth IRA, a SIMPLE IRA,
or an education IRA. This was the original IRA. Two advantages of
a traditional IRA are that you may be able to deduct some or all
of your contributions to it, depending on your circumstances, and,
generally, amounts in your IRA, including earnings and gains, are
not taxed until they are distributed. |
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Roth
IRA
Unlike
a traditional IRA, you cannot deduct contributions to a Roth IRA.
But, if you satisfy the requirements, qualified distributions (discussed
later) are tax free. Contributions can be made to your Roth IRA
after you reach age 70 1/2 and you can leave amounts in your Roth
IRA as long as you live. To be a Roth IRA, the account must be designated
as such when it is set up. Neither a SEP-IRA nor a SIMPLE IRA can
be designated as a Roth IRA. |
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Coverdell
IRA
The
Coverdell Educational Savings Account (ESA), formerly the Education
IRA, is not really an IRA at all. It was created as part of the
Taxpayer Relief Act of 1997 to help families save for their children's
college. Distributions from the IRA are tax-free and penalty-free
for qualified higher education expenses. The ESA allows annual aggregate
contributions of $2,000 per child. |
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SEP
IRA
A
simplified employee pension (SEP) is a written arrangement (a plan)
that allows an employer to make deductible contributions for the
benefit of participating employees. The contributions are made to
individual retirement arrangements (IRAs) set up for participants
in the plan.
Self-employed
individuals, as well as other employers, can set up simplified employee
pension (SEP) plans. A SEP plan allows an employer to make contributions
toward employees' retirement, and, if self-employed, his or her
own retirement, without becoming involved in more complex retirement
plans.
A
self-employed individual is an employee for SEP purposes. He or
she is also the employer. Even if the self-employed individual is
the only qualifying employee, he or she can have a SEP-IRA. |
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