IRA's - Individual Retirement Accounts

Traditional IRA: pre-tax contributions, taxable earnings and distributions

  • You can deposit into an FDIC-insured certificate of deposit with terms of 1 to 5 years at fixed rates. CURRENT DEPOSIT RATES.     Financial calculators  
  • To make a contribution: Contact any DSB location. Annual contribution limit is $7,000 for current tax year. Depositor can make multiple contributions during a tax year until limit is achieved. Must have earned income; certain contribution restrictions based on adjusted gross income. There is no maximum age limit for contribution as long as there is taxable earned income. 
  • Individuals age 50 and over can make catch-up contributions. Individual can make maximum IRA contribution plus contribute an additional $1,000 per tax year, or $8,000 total.
  • Contributions and interest paid are tax deferred. Distributions are treated as ordinary income and taxable.* (see below) 
  • You may qualify for a tax deduction if you are not an active participant in a retirement plan. Otherwise, phase-out rules apply.
  • Contribution deadline is the contributor's tax filing deadline (example: contributions for calendar year 2024 can be made until April 15, 2025).
  • To take a distribution: Contact any DSB location. The required distribution age is 73.
  • Transfer of rollover funds and re-deposit within 60 days, once a year.
  • No set-up fee.
  • IRAs are FDIC-insured to $250,000 separately from any other deposits you may have at the same institution.
  • Electronic notices delivery, such as pre-maturity notice (optional)

Roth IRA: post-tax contributions, untaxed earnings and distributions

The Roth IRA is a non-deductible account that features non-taxed earnings for certain distribution reasons after a five-year waiting period. In the long run, you'll accumulate your annual contributions, plus you'll save money in the end on your untaxed distributions. If you expect to be in the same or higher tax bracket when you retire, you'll benefit more from a Roth IRA than a traditional IRA.

  • You can deposit into an FDIC-insured certificate of deposit with terms of 1 to 5 years at fixed rates. CURRENT DEPOSIT RATES.   Financial calculators 
  • To make a contribution: Contact any DSB location. Annual contribution limit is $7,000 for current tax year. Must have earned income; certain contribution restrictions based on adjusted gross income. There is no maximum contribution age. 
  • Individuals over the age of 50 can make catch-up contributions. Individual can make maximum IRA contribution plus contribute an additional $1,000 per tax year, or $8,000 total.
  • Contribution deadline is the contributor's tax filing deadline (example: contributions for calendar year 2024 can be made until April 15, 2025).
  • Contributions are post-tax: they are not tax deductible or tax deferred. Distributions are untaxed under certain guidelines.* (see below) 
  • To take a distribution: Contact any DSB location. There is no required distribution for a Roth IRA. A qualified distribution must occur at least five years after a person's first-ever Roth IRA was established and the owner is 59 1/2 years old.  
  • You can convert your existing Traditional IRA into a Roth IRA.
  • IRAs are FDIC-insured to $250,000 separately from any other deposits you may have at the same institution.
  • Electronic notice delivery (optional) 

Simplified Employee Pension (SEP) IRA

The SEP IRA is designed for small businesses and self-employed individuals to benefit from a retirement plan for themselves and all qualifying employees. 

  • All tax-deductible contributions are made by the employer.
  • You can deposit into an FDIC-insured certificate of deposit with terms of 1 to 5 years at fixed rates.
  • For tax year 2025, contribution limit is $70,000.
  • Contributions are not considered as income until distribution is taken, and therefore are tax-deferred.
  • Must be at least 21 years of age.
  • No set-up fee. 

Visit Rex Frazier or Jodie Swendson at the Holton main bank about SEP IRAs.

*Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. If you have questions regarding accounting issues specifically related to your personal or business circumstances, you should consult with your own professional tax advisor, accountant, attorney, industry expert or professional association.