IRA Savings Account
- An Individual Retirement Account can provide a strong foundation to help you build toward your financial future. Let Farmers State Bank help you with your IRA rollovers and transfers too!
- Interest compounded and credited to account quarterly
- Closing fee of $25 will be charged for closing this account
|Traditional IRA||Roth IRA|
|Eligibility Requirements||Minimum Age||No IRS minimum age restriction.||No IRS minimum age restriction.|
|Maximum Age||For 2020 tax year, no maximum age restriction.||No maximum age restriction.|
|Income||You or your spouse must have earned income.||You or your spouse must have earned income.|
|Contributions||Deductibility||May receive tax deduction.||No tax deduction.|
|Maximum Contribution||$6,000 plus an additional $1,000 if 50 years of age or older by end of calendar year.||$6,000 plus an additional $1,000 if 50 years of age or older by end of calendar year.|
|Before Age 59.5||10% early distribution penalty unless exception applies. Taxed as ordinary income.||10% early distribution penalty generally applies to non-qualified distributions of earnings unless exception applies.|
|Distributions||Annual Mandatory Minimum Distribution (RMD)
****No RMD required for 2020.
|RMD mandatory beginning April 1, following the year in which you become 72 years of age. Taxed as ordinary income.||No RMD.|
|Qualified||Taxed as ordinary income, no penalty applies.||Tax-free distribution for certain situations after a 5 year mandatory waiting period.|
|Nonqualified||10% early distribution penalty unless exception applies. Taxed as ordinary income.||Earnings are taxed and generally subject to a 10% penalty unless exception applies.|