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BankEast IRAs
Traditional IRA
Traditional IRAs provide a retirement vehicle with tax-deferred
earnings. You can contribute up to $4,000 of your earned income
($5,000 if you are 50+). Anyone with earned income can contribute to
an IRA, and your contributions may be tax deductible. For more
specific information about a Traditional IRA, please refer to the
IRA Guide.
Roth IRA
Roth IRAs are similar to Traditional IRAs in several ways. Both
types of IRAs let you invest money into a tax-deferred account,
and both have the same contribution limits. However, with a Roth
IRA, the money you deposit is not tax-deductible. When you begin
making withdrawals from your Roth IRA, you pay no federal income
taxes on qualifying withdrawals. In other words, your money comes
out income tax-free. The IRA Guide provides more information about
the differences between Traditional and Roth IRAs.
Coverdell Education Savings Account
A Coverdell Education Savings Account (formerly known as the
Education IRA) lets you save tax-deferred for education expenses.
Anyone can contribute on behalf of a child under the age of
18
parents, grandparents, aunts, uncles, even family friends. The
money grows tax-deferred until the money is withdrawn, and
qualifying withdrawals are tax-free. Please refer to the IRA Guide
for more specific details.
BankEast Individual
Retirement Account Guide
| Product Name |
Traditional |
Roth |
Coverdell
Education Savings Account (CESA) |
|
|
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| Minimum Opening Deposit |
$1,000 |
$1,000 |
$100 |
Annual Contribution Limit
Per Individual Owner/Beneficiary |
100% of income up to $4,000 ($5,000 if 50 or
older) |
100%
of income up to $4,000 ($5,000 if 50 or older) |
$2,000 per child per year
(contributions completely separate from
retirement IRAs)
|
| Eligibility Requirements |
For Deductible IRA
Must have earned income
Special deduction rules for married couples filing jointly
For single active participant, deductions phased out from
MAGI of $52,000 to $62,000
For married filing jointly active participant, deduction
phased out from MAGI of $83,000 to $103,000.
For married filing jointly, not an active participant but
spouse is, deduction phased out from MAGI of $156,000 to
$166,000
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Available to those who dont qualify for deductible IRA. Also
an alternative for those who do qualify for a deductible IRA.
Income Limits
Contributions phased out for singles with MAGI of $99,000 to
$114,000
Contributions phased out for married couples filing jointly
with MAGI of $156,000 to $166,000
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Income Limits
Contributions phased out for single donors when MAGI reaches $95,000 to $110,000
Contributions phased out for donors who are married couples
filing jointly when MAGI reaches $190,000 to $220,000 |
| Withdrawal Limits |
Must be age 59½ to begin withdrawing
distributions without penalties
Penalties for early withdrawals
Exceptions: Owner death or disability
Distributions for education, medical and first time home
buyer by filing IRS Form 5329 |
For Tax-Free Withdrawals
Account must have been opened for five years
Owner must be 59½ year old
Distributions for education, medical and first time home buyer by filing IRS Form 5329
Offers greater flexibility and simplicity in planning
distributions
No elections to be made when owner reaches 70½
No tax penalties for allowing account to grow undisturbed,
tax-free
Contributions after 70½ are permitted
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Distributions for primary, secondary and
college educational expenses. |
| Tax Requirements |
10% tax penalty for withdrawals before age
59½
If qualified for a deductible IRA, may take a $4,000 ($5,000) tax
deduction
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All
withdrawals tax-free if certain conditions are met. |
All withdrawals tax-free if certain conditions
are met. |
| Other Features |
Various rates and terms.
Deposits of $25 or more may be made anytime
during the term.
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Various rates and terms.
Deposits of $25 or more may be made anytime
during the term.
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Various rates and terms.
Deposits of $25 or more may be made anytime
during the term.
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Equal Housing Lender