The Ins and Outs of Investing in IRAs

There are two types of consumer Individual Retirement Accounts (IRAs) for retirement purposes: Roth and Traditional. Knowing the differences between the two will help you make the best decision when it comes to planning for your future.

Traditional IRAs can often be tax-deferred, which means no tax is owed on the money in your IRA until you withdraw it, as long as you comply with the IRA rules. If you qualify, contributions to a Traditional IRA may also be written off as tax deductions.

Roth IRAs don’t offer tax deductions, but the income you accumulate is never taxed, as long as you follow the IRA regulations.

IRAs at the bank are invested in CDs. This means you earn the interest rate of whatever term CD you choose to open.

At the end of a CD term, your IRA will renew for the same length of time at the current interest rate, unless you request a different term. Bank customers over the age of 59 1/2 have the option to change term lengths every 12 months—even if their CD is not up for renewal at that time. Those over 50 are allowed to contribute extra income to their IRA each year. Bank customers can change their CD term over the phone or at the bank.

“There is no set rule as to which type or term length of IRA is best,” said Deb Brock, KCB Financial Services Representative. “We can help you look at all factors and decide on the best course of action.”

To get started with your IRA, contact Deb, Tonya or another Financial Services Representative for an appointment.

Individual Retirement Accounts

Start sowing the seeds early that will reap a solid return for your retirement. Individual Retirement Accounts are available from 12 months to 60 months. Interest is compounded and paid semi-annually. $500 minimum balance required to open and obtain APY*.

*Annual Percentage Yield. Interest Rates and APYs quoted are good as of Aug 1, 2005. Fees could reduce earnings. An early withdrawal penalty may apply.