Personal Banking

CD's and IRA's

CERTIFICATES OF DEPOSIT (CD)

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

Traditional IRA

The traditional IRA first became available in 1975 to encourage people to save for their retirement and provide for beneficiaries upon death. Higher contribution limits and greater flexibility were added with the implementation of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. If deferring taxes on a portion of your current income is your tax strategy, a Traditional IRA may be right for you.

Roth IRA

The Roth IRA was first made available on January 1, 1998. As opposed to a Traditional IRA, contributions are made with “after-tax” dollars. Earnings are free from taxes and IRA penalties, if certain conditions are met. If your income level is too high for a Traditional IRA, a Roth IRA may be a good alternative for you.

Transfers and Rollovers

It’s easy to move your IRA to First Colony Bank. For either a Roth or Traditional IRA, you can move existing IRA monies as follows:

Distributions

When you withdraw money from a retirement account, it is called a distribution. Distributions from a Traditional IRA are reported to the IRS as income and may be subject to income tax. Except under special circumstances or upon reaching age 59 ½, there may also be IRS imposed penalties for early distributions. Distributions from a Roth IRA have more complex tax implications. Prior to any type of IRA distribution, you should speak with your tax advisor, accountant or attorney.

Required Minimum Distributions (RMD)

The IRS requires that, beginning in the year you become 70 ½ years of age, you begin taking a “Required Minimum Distribution” from your Traditional IRA annually. This amount will vary based upon governmental tables. Our Personal Bankers will be happy to assist in calculating your RMD, if requested.