Individual Retirement Accounts (IRA)

How to Get Started?

The Traditional and Roth IRAs RiverWood Bank offers differ mainly in how and when your money is taxed. The tax advantage of a Traditional IRA is that your contributions are tax-deductible in the year they are made. The tax advantage of a Roth IRA is that your withdrawals in retirement are not taxed. Check with a RiverWood Banker to see if you are eligible for an IRA, the IRS has specific rules to follow. Don’t forget to consult a tax advisor too.

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Traditional IRAs*

• Contributions to a Traditional IRA may be tax-deductible, up to 100%, but distributions are generally taxable.
• Earnings grow tax deferred.
• Distributions are required to be taken by Traditional IRA holders beginning at age 70 ½.
• Distributions are generally taxable, but are penalty-free if withdrawn under one of the following circumstances:
  
  • Attaining age 59 ½;
  • Incurring a disability;
  • Payment for certain health insurance, medical expenses, and higher education expenses;
  • Payment for first-time homebuyer expenses;
  • Death (payments to beneficiaries); or
  • Being a qualified military reservist.

Roth IRAs*

• Contributions to a Roth IRA are not deductible.
• Earnings can grow tax free.
• Contributions can generally be distributed tax free at any time.
• Distributions are not required by Roth IRA holders, though beneficiaries may be subject to required distributions.
• Earnings can be distributed tax free if the Roth IRA holder first made a Roth IRA contributions at least five years ago, and one of the following events occurs:
  
  • Attaining age 59 ½;
  • Incurring a disability;
  • Payment for first-time homebuyer expenses; or
  • Death (payments to beneficiaries).

Still Have Questions?

Find FAQs, routing numbers and online banking tutorials in our Education Center.

*Consult your tax advisor, legal counsel, and/or insurance agent for advice and information concerning your particular situation and your eligibility for IRAs. RiverWood Bank representatives may not give legal or tax advice.