Retirement Accounts (IRAs)

Retirement Accounts (IRAs)

Planning for retirement is a good thing for your future. We can help.

Individual Retirement Accounts (IRAs) Basics

Federal tax laws make it possible for you to enjoy a tax break while you save for retirement. Monona State Bank offers you several ways to take advantage of these savings opportunities.

Provisions of the tax law that affect these accounts change each year. Be sure to talk to your tax advisor for the details before opening an account.

Visit the Internal Revenue Service (IRS) web site for helpful information.


Types of IRAs: Traditional & Roth


Traditional Individual Retirement Accounts (IRAs)

When you save with a traditional IRA account, you earn compound interest that won't be taxed until you withdraw it. And, depending on your income and any other retirement accounts you have, your contributions may be tax deductible today. Your tax advisor can explain your options.

Eligibility – Must be under age 70-½ to contribute and have reported earned income.

Annual contribution limits – The IRS limits the amount you can contribute in an IRA each year. Annual contribution limits vary based on age and tax year. If you are at least 50 years old, you may make an additional "make-up" contribution. View current contribution limits below.

Tax benefits – 

  • Contributions may be tax-deductible
  • Interest not taxed until withdrawn

Be sure to address any tax questions with your tax advisor

Qualified Withdrawals – You may make withdrawals penalty free when you reach age 59-½, become disabled or upon death. Additionally, other circumstances allow you to withdraw funds penalty free. See your tax advisor for details.

Tax penalty for early withdrawal – Please consult your tax advisor for tax information.

FDIC Insurance – FDIC insured separate from other bank deposits up to $250,000.


Roth IRA

A Roth IRA offers the opportunity for tax free growth. Your contributions will not be tax deductible. However, all the interest you accrue will be tax-free if you withdraw after you reach age 59-½ and your account is at least 5 years old. Be sure to address any tax questions with your tax advisor.

Eligibility – Must be under age 70-½ to contribute and have reported earned income.

Annual contribution limits The IRS limits the amount you can put in a Roth IRA each year, based on your adjusted gross income. The limits change annually. If you are at least 50 years old, you may make an additional "make-up" contribution. View current contribution limits below.

Tax benefits – Interest is tax-free after you reach age 59-½ and account is at least five years old. For additional details, please see your tax advisor.

Qualified Withdrawals – Your contributions are available at anytime. You may make withdrawals of interest both tax and penalty free when you reach age 59-½, become disabled or upon death. Additionally, other circumstances allow you to withdraw funds both tax and penalty free. See your tax advisor for details.

Tax penalty for early withdrawal –  Please consult your tax advisor for tax information.

FDIC Insurance – FDIC insured separate from other bank deposits up to $250,000.

 You may want to consider converting your traditional tax-deferred IRA to a Roth IRA. Talk to your tax advisor for details.


Contribution Limits

For your reference the published contribution limits are as follows. 
For more information please visit www.irs.gov or speak with your tax advisor.

Tax Year Contribution Limit Age 50 & Over Limit
2009 & after $5,500 $6,500
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