Retirement Accounts

Fixed Rate and Variable Rate Individual Retirement Accounts (IRAs)

A Fixed Rate IRA has a guaranteed return similar to a CD with the tax benefits of an IRA. A Variable Rate IRA has the tax benefits of an IRA, but the interest rate can vary during the life of the IRA. Additionally, withdrawals can be taken from the Variable Rate IRA as needed or automatically transferred to a checking or savings account at Community First Bank on a monthly basis to conveniently create an income stream.

Features and Benefits

• Many terms and rates are available for the Fixed Rate IRA
• $100 minimum to open the Variable Rate IRA
• $1000 minimum to open (most terms) a Fixed Rate IRA
• No set-up or maintenance fees
• Early withdrawal penalty may apply

Traditional IRA Features and Benefits

• Eligibility: No age limit, but must have earned income
• Contributions may be tax-deductible*
• Earnings grow tax-deferred
• Withdrawals
  • Taxable, but penalty free after age 59 ½
  • Prior to age 59 ½, subject to an additional 10% penalty tax**
  • Mandatory withdrawals must begin at age 72 (70 ½ if you reach 70 ½ before January 1, 2020)

*consult your tax advisor

**certain exceptions may apply (disability, first-time home purchase, qualified higher education expenses, and others)

Roth IRA Features and Benefits

• Eligibility: No age limits, but income limits may apply
• Contributions are not tax-deductible
• Withdrawals
  • Original contributions may be withdrawn without tax or penalty*
  • Qualified withdrawals of earnings are tax-free and penalty-free**
  • Certain withdrawals may be subject to tax, but no penalty***
  • Early withdrawals may be subject to tax and 10% penalty
  • No mandatory withdrawals at age 72 (70 ½ if you reach 70 ½ before January 1, 2020)

*consult your tax advisor

**qualified withdrawals: have had Roth IRA for five years and one additional qualification (over age 59 ½, disability, death, or qualified first-time home purchase (up to $10,000/life))

***exceptions to penalty may include health insurance, qualified higher education expenses, plan not open for five years (but other qualified reason) and others

Rollovers and Transfers

We will gladly assist you with your 401(k) rollover or IRA transfer from another custodian. Bring in your last statement, maturity notice, or rollover paperwork for assistance today.

Coverdell Education Savings Account (formerly Education IRA)

• Contribution eligibility: No age limits, but income limits may apply
• Beneficiary: Must be under 18, need not be a relative
• Contributions are not tax-deductible
• Maximum annual contribution of $2000
• Withdrawals
  • Qualified education expenses may be withdrawn without tax or penalty *
  • Earnings distributed due to death, disability or scholarship are taxable
  • Earnings withdrawn for non-qualified expenses are subject to tax and penalty
  • CESA assets may be transferred to another beneficiary (if related)
  • Account must be depleted by age 30

*Qualified expenses include tuition, fees, books, supplies, equipment and room and board