Individual Retirement Accounts

Individual Retirement Accounts (IRAS)

An IRA is designed to help you grow your money for retirement. We know the financial markets can be uncertain and full of risk, which is why we offer low risk IRA-Certificates of Deposit that offer more consistent returns and are FDIC-insured. Having an IRA-CD account with us is a safe and secure way to grow your retirement savings.

There are different types of IRAs to choose from to save for retirement, each with their own set of rules and potential tax advantages.

Traditional IRA

All individuals with earned income can contribute to a Traditional IRA and may benefit from tax-deferred compounding of potential earnings. Some who meet income requirements can make contributions that are deductible from current taxes. Earnings and tax-deductible contributions are taxed at ordinary income tax rates when money is withdrawn from the IRA.

A Traditional IRA may be a good choice if you:

  • qualify to make tax-deductible contributions;
  •  earn too much income to be eligible to contribute to a Roth IRA;
  • want to build a pool of savings that could be converted to a Roth IRA at a later date; or
  • expect to be in a lower tax bracket when you retire.

ROTH IRA

Roth IRAs offer the power of tax-free compounding of potential earnings making them an alternative for many investors who qualify to make contributions (based on income limits). If holding period requirements are met, all earnings that accumulate in a Roth IRA can be withdrawn on a tax-free basis. By paying taxes now before you make contributions, you may save the tax benefits for later – even beyond your own life. Dollars accumulated in a Roth IRA can generate a stream of tax-free income for you later in life. Money remaining in your account after your death can continue to provide tax-free income for your heirs.

A Roth IRA may be a good choice if you:

  • want a source of tax-free income in retirement;
  • seek to avoid required minimum distributions (RMDs) from your IRA when you reach age 70-1/2 (distributions are required from a Traditional IRA at that age);
  • expect to be in a comparable or a higher tax bracket when you retire; or
  • wish to leave heirs with a tax-advantaged income source after your death.

Please consult with your tax advisor for details on which IRA is the best for your situation.

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Links to non-Farmers Bank websites are provided solely as pointers to information on topics that may be useful to our users and will not apply to Farmers Bank's Privacy Policy. Farmers Bank has no control over the content of such non-Farmers Bank websites. If you choose to link to a website not controlled by Farmers Bank, Farmers Bank makes no warranties, either expressed or implied, concerning the content of such site, including the accuracy, completeness, reliability or suitability thereof for any particular purpose, nor does Farmers Bank warrant that such site or content is free from any claims of copyright, trademark or other infringement of the rights of third parties or that such site or content is devoid of viruses or other contamination. Farmers Bank does not guarantee the authenticity of documents on the Internet. Links to non-Farmers Bank sites do not imply any endorsement of or responsibility for the opinions, ideas, products, information or services offered at such sites, or any representation regarding the content at such sites.
THIRD PARTY SITE DISCLAIMER
THIRD PARTY SITE DISCLAIMER
Links to non-Farmers Bank websites are provided solely as pointers to information on topics that may be useful to our users and will not apply to Farmers Bank's Privacy Policy. Farmers Bank has no control over the content of such non-Farmers Bank websites. If you choose to link to a website not controlled by Farmers Bank, Farmers Bank makes no warranties, either expressed or implied, concerning the content of such site, including the accuracy, completeness, reliability or suitability thereof for any particular purpose, nor does Farmers Bank warrant that such site or content is free from any claims of copyright, trademark or other infringement of the rights of third parties or that such site or content is devoid of viruses or other contamination. Farmers Bank does not guarantee the authenticity of documents on the Internet. Links to non-Farmers Bank sites do not imply any endorsement of or responsibility for the opinions, ideas, products, information or services offered at such sites, or any representation regarding the content at such sites.