IRA
Save for your retirement with an Individual Retirement Account (IRA)
Traditional IRAs
Ideal for wage earning employees, contributions may be tax-deductible and interest earned is tax-deferred until retirement (or when funds are withdrawn).
- The maximum annual contribution limit for 2024 is $7,000.
- The maximum annual contribution limit for 2025 is $7,000.
- Customers 50 years or more can make additional catch-up contributions of $1,000 annually.
- Required minimum distributions begin at age 73; however, customers may start to take distributions at age 59-1/2 without penalty.
See how much you could potentially save on your taxes based on your tax bracket:
| Tax Bracket: | 12% | 24% | 32% | 35% | 37% |
|---|---|---|---|---|---|
| IRA Deductible Contribution Amount: | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential | Annual Tax Savings Potential |
| $1,000 | $120 | $240 | $320 | $350 | $370 |
| $2,500 | $300 | $600 | $800 | $875 | $925 |
| $5,000 | $600 | $1,200 | $1,600 | $1,750 | $1,850 |
| $6,500 | $780 | $1,560 | $2,080 | $2,275 | $2,405 |
Roth IRAs
Roth IRAs are a great way to supplement your retirement savings–especially for families planning to buy their first home or individuals who don’t qualify for a traditional IRA. Unlike a traditional IRA, contributions are not tax-deductible and are made with after-tax funds, so you can withdraw your contributions at any time without penalty.
- The maximum annual contribution limit for 2024 is $7,000.
- The maximum annual contribution limit for 2025 is $7,000.
- Customers 50 years or more can make additional catch-up contributions of $1,000 annually.
- Earnings distributions can be made tax-free at age 59-1/2 if the funds have been in the IRA for five years or more. There are no mandatory minimum distributions. Tax-free distributions due to death or disability or for the purpose of buying your first home are also allowed at any time.
TSB customers may select either a Passbook Savings Account or Certificate of Deposit for their IRAs. IRA deposits are insured by the FDIC up to $250,000 per qualifying account.
Changing Employers or Retiring?
Avoid withdrawal penalties by transferring your assets to a TSB IRA or another qualified plan. Ask your employer to arrange for a “direct rollover” of your retirement savings into a new IRA account with us, or you can do it yourself with an IRA-to-IRA rollover. Rollovers must be completed within 60 days from the date you receive the assets from your old retirement savings account or IRA to avoid the mandatory 20% withholding and other possible penalties.
Please consult your tax advisor regarding your specific situation and the deductibility of your contributions.
