Individual Retirement Account (IRA) Options
Your secure future starts today!
Traditional IRA, Roth IRA, SEP IRA, Educational IRA
There is truly no better way to invest in your future than opening an IRA, and Greenwood has your safe and secure options covered! For individuals, we offer both Traditional IRAs and Roth IRAs, which let you save for retirement in tax-advantaged ways, and the Coverdell Educational IRA, which lets you save for college and other education expenses, also with tax savings advantages.
For small business owners, including self-employed individuals and partnerships, we offer a Simplified Employee Pension Plan (SEP IRA), which acts similar to a 401k that you can establish for yourself and/or your employees.
We offer IRA savings accounts and IRA CD’s from three (3) months to five (5) years.
Scroll down for to see which option is best for you. To open an account call member service at 401-739-4600 or e-mail: [email protected]
Traditional IRA
For qualified taxpayers Traditional IRA contributions are tax-deductible up to the annual contribution limit of $6,500.00 ($7,500 if age 50+). Consult your tax advisor for your specific situation. Your money then grows tax deferred, which means you don’t pay taxes until you withdraw it. You can withdraw the funds penalty-free once you reach age 59 ½. Contributions cannot be made for more than your taxable compensation for the year but can be made at any age as long as you have taxable compensation. You must begin withdrawing funds at age 73 under mandatory disbursement rules.
See comparison chart HERE for Traditional IRA vs. Roth IRA.
Roth IRA
With Roth IRA’s, there are no tax deductions for contributions, however once you turn 59 ½, you can withdraw your funds with no penalty or tax obligation. You can contribute to your Roth IRA at any age as long as you have taxable compensation and your modified adjusted gross income is below certain amounts. There are no minimum distribution requirements, and there are certain circumstances that allow you to withdraw funds penalty-free before age 59 ½, so consult your tax advisor for your eligibility. Roth IRA’s let qualified individuals contribute up to $6,500 ($7,500 for 50+) annually.
See comparison chart HERE for Traditional IRA vs. Roth IRA.
Coverdell Educational IRA
A great, tax-advantaged way to save for educational expenses, the Coverdell Educational IRA allows a yearly contribution up to $2,000.Contributions are not tax-deductible, however when you withdraw funds to cover qualified educational expenses there are no penalties or tax obligations. Contributions can only be made until the beneficiary reaches the age of 18, although there are special circumstances which allow contributions after the age of 18. To open an account call member service at 401-739-4600 or e-mail: [email protected]
SEP IRA
Simplified Employee Pension
To qualify you must be either a sole proprietor, business owner, in a partnership or earn self-employment income. Contributions can be made at any age as long as you have applicable taxable compensation. No penalty withdrawals may begin at age 59 ½ and are required at age 73. Contributions can be made by the employer for between 0% – 25% and are usually tax-deductible. Consult your tax advisor for this year’s contribution limits and tax-deductibility.
To open an account call member service at 401-739-4600 or e-mail: [email protected]
Effective Date August 16, 2023
| Features | Traditional | ROTH |
|---|---|---|
| Who can contribute? | You can contribute if you (or your spouse if filing jointly) have taxable compensation. | You can contribute at any age if you (or your spouse if filing jointly) have taxable compensation and your modified adjusted gross income is below certain amounts. |
| Are my contributions deductible? | You can deduct your contributions if you qualify. | Your contributions aren’t deductible. |
| How much can I contribute? | The most you can contribute to all of your traditional and Roth IRAs is the smaller of: For 2022, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year. For 2023, $6500, or $7500 if you're age 50 or older by the end of the year, or your taxable compensation for the year. |
|
| What is the deadline to make contributions? | Your tax return filing deadline (not including extensions). For example, you can make 2022 IRA contributions until April 15, 2023. | |
| When can I withdraw money? | You can withdraw money anytime. | |
| Do I have to take required minimum distributions? | You must start taking distributions by April 1 following the year in which you turn age 73 and by December 31 of later years. | Not required if you are the original owner. |
| Are my withdrawals and distributions taxable? | Any deductible contributions and earnings you withdraw or that are distributed from your traditional IRA are taxable. Also, if you are under age 59 ½ you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception. | None if it’s a qualified distribution (or a withdrawal that is a qualified distribution). Otherwise, part of the distribution or withdrawal may be taxable. If you are under age 59 ½, you may also have to pay an additional 10% tax for early withdrawals unless you qualify for an exception. |
For more information on Traditional and ROTH IRA’s please view IRS publication 590.