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Traditional IRA
[Tax - Deferred Growth]

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Reduce your taxable income by deducting your contributions, if eligible, and your potential earnings could grow tax deferred.

An IRA is an account set up at Your Bank of Whittier that allows you to save for retirement with tax-free growth or on a tax-deferred basis.

If you have a 401-K Profit Sharing Plan You GENERALLY do not Qualify for an IRA

WARNING: Please Update the List and Distribution of Your Beneficiaries Who will Inherit You

Open an account

You make contributions with money you may be able to deduct on your tax return, and any earnings can potentially grow tax-deferred until you withdraw them in retirement.  Many retirees find themselves in a lower tax bracket than they were in pre-retirement, so the tax-deferral means the money may be taxed at a lower rate.

A Bank of Whittier RF IRA Savings Account offers you a tax-advantaged way to save for retirement by stashing cash in an RF savings account in an RF FDIC-Insured Certificate of Deposit. With a traditional IRA, your contributions may be tax deductible, and you'll be taxed on all withdrawals.

OPENING AN IRA RETIREMENT SAVINGS ACCOUNT TO INVEST IN RIBA FREE CD (RF CD):

• You open an RF IRA Account with Bank of Whittier.
• Account Must be Funded on or Before Tax Return Official Deadline of April 15th. Annual additions must be be On or Before April 15th for the Previous Year.
• You contribute the maximum allowed IRA contribution in the tax year. In 2024 the maximum is $7,000. This level changes from year to year. Please check with us.
  • According to the IRS, you can only contribute up to a limit in your traditional IRA account annually. This limit depends on your age.
  • The tax years 2023 and 2024 have $7,000 for people under 50 Years of age. Savers above 50 can make higher annual contributions through catch-up contributions for an additional $1,000 (total of $8,000).
• The $7,000 (or less) contribution is tax deductible.
• That is; if your income is say $50,000 you can deduct from it $7,000 and your taxable income will be $50,000 less $7,000 = $43,000. Of course, you can deduct other eligible deductions.
• Invest in an RF CD. Your investment grows TAX FREE.

ADDING MONEY ANNUALLY TO YOUR IRA RF CD ACCOUNT:

• You are encouraged to add the maximum amount allowed by the government every year on Before April 15th for the prior year.

WITHDRAWING MONEY BEFORE THE AGE OF 59½

• If you withdraw Money out of your IRA account before the age of 59 ½ years of age
• At the age of 59 ½ You can start withdrawing money as you need. The money you withdraw will be considered an added income to your annual income and is taxable.

WHAT ARE THE PENALTIES IF YOU WITHDRAW MONEY BEFORE THE AGE OF 59½?

• If you withdraw funds before the age of 59½:
  • You Pay 10% Penalty of the amount you withdraw.
  • You Pay income tax on the amount withdrawn.

CAN YOU WITHDRAW FROM YOUR TRADITIONAL IRA WITHOUT PENALTIES?

The IRS usually imposes a 10% penalty for withdrawing funds from your traditional IRA before reaching the age of 59 ½. However, you can avoid this in certain circumstances like:

• No health insurance with a huge medical bill.
• Unemployed and have health insurance premiums.
• Permanently disabled and are unable to work.
• Fund higher education.
• Inherited an IRA.
• Want to buy, build, or rebuild a home.
• Have unpaid federal taxes.
• Qualified reservist called to active duty.

WHEN MUST I WITHDRAW MONEY? Required Minimum Distribution RMD:

• At the Age of 73 You should withdraw RMD. This age changes. Please check with us and/or Your Retirement Planners.
• The amount of RMD will be calculated by your Bank of Whittier and we shall notify you.

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