Traditional and Roth IRAs
Is an IRA Right For You? Take our Peru Federal Savings Bank One-Minute IRA Test and find out. Then call one of our customer service representatives today at 815-223-4300.
Traditional and Roth IRA accounts provide tax-advantaged ways to save for retirement. A traditional IRA allows pre-tax contributions which may reduce your taxable income for the year 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. Consult with 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.
A Roth IRA allows for after-tax-contributions but allows for tax-free withdrawals after requirements are met. Once the Roth IRA has been established for 5 years and you have reach the age of 59 1/2, withdrawals are tax free.
A Traditional and a Roth IRA can help you reach your retirement goals depending on your situation.
IRA Tax Savings Potential Chart:
| IRA Deductible Contribution Amount | 10 % Tax Bracket Savings | 15 % Tax Bracket Savings | 25 % Tax Bracket Savings | 28 % Tax Bracket Savings | 33 % Tax Bracket Savings | 35% Tax Bracket Savings |
|---|---|---|---|---|---|---|
| $500 | $50 | $75 | $125 | $140 | $165 | $175 |
| $1,000 | $100 | $150 | $250 | $280 | $330 | $350 |
| $2,000 | $200 | $300 | $500 | $560 | $660 | $700 |
| $2,250 | $225 | $338 | $563 | $630 | $743 | $788 |
| $4,000 | $400 | $600 | $1,000 | $1,120 | $1,320 | $1,400 |
For more information about IRA Rollovers or opening a new IRA just give us a call at 815-223-4300.
