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Because
Holcomb State Bank realizes the importance of saving for your retirement,
we offer a range of IRAs to meet your individual needs. IRA certificates
may be opened with fixed rates and terms from 6 months to 3 years.
Our personal bankers are friendly, knowledgeable, and ready to
help in any way we can. You may contact any of our facilities to
obtain current interest rates. Holcomb State Bank encourages you
to consult your tax professional, accountant or attorney before
proceeding with setting up an IRA.
The traditional IRA first became available in 1975 to encourage
people to save for their retirement and to provide for beneficiaries
upon death. Higher contribution limits and greater flexibility were
added with the implementation of the Economic Growth and Tax Relief
Reconciliation Act (EGTRRA) of 2001. If deferring taxes on part
of your income is your tax strategy, a Traditional IRA may be right
for you.
The Roth IRA was first made available on January 1, 1998. Contributions
are made with after-tax dollars and earnings are free from taxes
and IRA penalties if certain conditions are met. If your income
level is too high for a Traditional IRA, a Roth IRA may be just
the thing for you.
In July 2001, President Bush signed legislation that formally renamed
the Education IRA the Coverdell Education Savings Account (CESA).
This is named after the late Senator Paul Coverdell, who championed
the creation of the Education IRA.
The CESA is a tax-favored savings tool created to assist in saving
for an individual’s education expenses. Distributions for
qualified education expenses are not subject to federal income tax
or a 10 percent penalty tax.
It’s easy to move your IRA to Holcomb State Bank. Whether
a Roth or Traditional IRA, you can move existing IRA money as follows:
- Transfers
-- you can come into any one of our facilities, establish an IRA
account with us, and complete a transfer form. This form is then
sent to the institution that currently holds your funds. After
receipt, the funds are sent directly to us for deposit into your
account. The IRS places no limits on transfers and no part of
this transaction is reported to the IRS.
- Rollovers
-- To complete a rollover, you take the funds from one institution
and deposit into another institution. A rollover may be done once
per year and the deposit must be completed within 60 days of distribution
from the first institution. A rollover is also used when moving
funds from a qualified pension plan to a Traditional IRA.
When you withdraw money from a retirement account, it is called
a distribution. Distributions from a Traditional IRA are reported
to the IRS as income and as such, may be subject to income tax.
There may also be IRS imposed penalties except under special circumstances
such as death, first time home purchase, disability, education and
reaching age 59 ½.
Distributions from a Roth IRA have more complex tax implications.
You should speak with your tax advisor, accountant or attorney before
proceeding with this type of transaction.
Required Minimum Distributions (RMD)
The IRS requires that, beginning in the year you become 70 ½
years of age, you begin taking a “Required Minimum Distribution”
from your Traditional IRA each year. This amount will vary based
upon governmental tables. Our representatives will be happy to
assist in calculating your RMD if requested.
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