Individual Retirement Accounts

Whether you're beginning to plan for retirement, or nearing retirement and want easy access to your funds, an IRA might be the right solution for you. An IRA allows you to put away savings at your own pace. There are two types; traditional IRAs and Roth IRAs. The main benefit of a Traditional IRA is that contributions may be tax-deductible. Roth IRAs on the other hand are beneficial because they are tax-free upon withdrawal.

Why consider opening an IRA?

  • An IRA is a great way to begin saving for retirement.
  • You can open an IRA to supplement your employer sponsored program.
  • If you are nearing retirement, an IRA typically provides greater access to your funds than an employer sponsored program. You may want to consider rolling over your retirement funds to an IRA for greater access.
  • Those who are in-between jobs may want to roll over their retirement funds into an IRA before moving them into a new employer sponsored retirement program.
 Traditional IRARoth IRA
Tax Benefits
  • Tax-deferred growth
  • Contributions may be tax-deductible
  • Tax-free growth
  • Tax-free qualified withdrawals 
Restrictions on Contributions
  • Must be under age 70 1/2
  • Must receive employment compensation
  • No age restrictions
  • Must receive employment compensation 
Income Limits
  • No income limits to make contributions
  • Income limits apply in order to make contributions
Tax Benefits at Withdrawal
  • Pre-tax contributions and any earnings are taxable when withdrawn 
  • Contributions are withdrawn tax-free
  • Earnings are federally tax-free after the five-year aging requirement has been satisfied and certain conditions are met
Withdrawal Penalties
  • Withdrawals before 59 1/2 may be subject to a 10% early withdrawal penalty unless an exception applies*
  • Non-qualified withdrawals are subject to taxation of earnings and a 10% additional tax unless an exception applies**
Distribution Requirements
  • Minimum required distributions starting at 70 1/2
  • No minimum required distributions during the lifetime of the original owner

*For Traditional IRAs, penalty-free withdrawals include but are not limited to: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments.
**A distribution from a Roth IRA is federally tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, qualified first time home purchase, or death.

For more detail, speak with a personal banker at 708.660.1000 or email us at

Community Bank offers both Roth and Traditional IRA options. Maturities and rates are the same as for standard CDs. Please consult with your tax advisor.


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