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There are various types of individual retirement accounts (IRAs), including traditional, and Roth IRAs.

Traditional IRAs

A traditional IRA is a special tax-deferred savings account authorized by Internal Revenue Code section 408. It is a unique and simple way to encourage people to save money for retirement.
Generally, you may add up to $5,500 or $6,500 (catchup provision for people 50 and older) for 2018, of earned income to your IRA account and have it be either fully or partially tax deductible. If your contribution is tax deductible, then you receive two tax benefits: 1) an immediate tax savings because you will pay fewer taxes because of the deduction and 2) the earnings generated by the IRA funds are not taxed until distributed. If your contribution is not tax deductible, you still receive the tax benefit of tax deferral on the IRA's earnings. You may also qualify for a tax credit.  New limits of $6,000 or $7,000 (catchup provision) apply for 2019.
You have until the due date (without extensions) for filing your federal income tax return, normally April 15, to establish and fund your traditional IRA for the previous tax year.
You are eligible for a regular contribution if you do not reach age 70½ in the calendar year for which you wish to make the contribution, and you have compensation (income earned from performing material personal services). You may also qualify for a rollover or a transfer contribution.
You may contribute to your traditional IRA and your Roth IRA for the same year, but you are subject to the applicable contribution limit for such years. You may also make nondeductible contributions when you are unable to claim a tax deduction.
The contribution limit for a person who is younger than age 50 or older than age 50 varies. Please see grid comparison.
IBC Bank IRA Accounts

Roth IRAs

Contributions to a Roth IRA are made with after-tax dollars but grow tax free.
For 2018, the annual limit for contributions is $5,500 (or $6,500, under catchup provision) and may be reduced if your modified adjusted gross income exceeds:
  • Single $135,000 (phase-out begins at $120,000)
  • Married filing jointly $199,000 (phase-out begins at $189,000)

For 2019, the annual limit for contributions is $6,000 (or $7,000, under catchup provision) and may be reduced if your modified adjusted gross income exceeds:
  • Single $137,000 (phase-out begins at $122,000)
  • Married filing jointly $203,000 (phase-out begins at $193,000)
Contributions to Roth IRAs may be further reduced by contribution made to a regular IRA.
Income limitation also applies to conversions of traditional IRAs into Roth IRAs. Such rollovers are taxable but may be advantageous for investors with a longer time horizon.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, if they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change. 

Learn more about strategies to attain your financial goals, such as Retirement Solutions, Changing Jobs (Rollovers), Retiring (Rollovers and Immediate Annuities), College Savings, 529 Plans, Guidance Planning, and Estate Tax Planning.


IRAs Comparison Grid

Regular contributions to IRAs can be a great way to help pursue your retirement goals. Our IRA Comparison Grid lets you compare IRA options side by side.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA / SIPC). Insurance products are offered through LPL or its licensed affiliates. IBC Bank and IBC Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using IBC Investment Services and may also be employees of IBC Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of IBC Bank or IBC Investment Services. This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial registered representatives associated with this site may only discuss and/or transact securities business with residents of the following states: Alabama, Arkansas, Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and Washington.

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