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IRAs

Whether you are considering a career move or looking at retirement, you may need an individual retirement account (IRA) to protect your retirement assets. Our staff can help you sort through the options so you may make decisions that are best for you. We offer Traditional, Roth and Coverdell Education Accounts.  We can also assist you with an IRA Rollover or Transfer.  Other reason to invest in Central Bank is the piece of mind knowing your money is safe in an FDIC insured bank.  Did you know that your FDIC insurance for IRA accounts is separate from your other FDIC insured deposits?

All of our Certificate of Deposit accounts can be opened as IRA accounts.  Check out our current terms and rates.

Traditional IRA

The traditional IRA first became available in 1975 to encourage people to save for their retirement and to provide for beneficiaries upon death. Higher contribution limits and greater flexibility were added with the implementation of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. If deferring taxes on part of your income is your tax strategy, a Traditional IRA may be right for you.

Roth IRA

The Roth IRA was first made available on January 1, 1998. Contributions are made with after-tax dollars and earnings are free from taxes and IRA penalties if certain conditions are met. If your income level is too high for a Traditional IRA, a Roth IRA may be just the thing for you.

Coverdell Education Savings Account

In July 2001, President Bush signed legislation that formally renamed the Education IRA the Coverdell Education Savings Account (CESA). This is named after the late Senator Paul Coverdell, who championed the creation of the Education IRA.

The CESA is a tax-favored savings tool created to assist in saving for an individual’s education expenses. Distributions for qualified education expenses are not subject to federal income tax or a 10 percent penalty tax.

IRA Transfers & Rollovers

IRS Announces IRA Rollover Rule Game Changer effective 1/1/15.

IRA rollover limits are nothing new. However, the IRS will begin enforcing a new interpretation of the rule that limits the number of nontaxable IRA rollovers an individual can complete. Because of this, IRA owners will need to tread even more carefully when contemplating IRA-to-IRA rollovers. 

Previously, the IRS allowed one rollover per 12-month period from each IRA an individual owned. Based on the current tax code and subsequent ruling by the U.S. Tax Court, IRA owners will be allowed to complete only one IRA-to-IRA rollover per 12-months. Period. Regardless of how many IRAs they own.

Rolling over multiple distributions may result in additional taxes and penalties, such as excess contribution penalties and ordinary income taxes on the erroneous rollover amounts, late-tax payment penalties, and potential early distribution penalties.

It’s easy to move your IRA to Central Bank. Whether a Roth or Traditional IRA, you can move existing IRA money as follows:

  • Transfers -- you can come into our office, establish an IRA account with us, and complete a transfer form. This form is then sent to the institution that currently holds your funds. After receipt, the funds are sent directly to us for deposit into your account. The IRS places no limits on transfers and no part of this transaction is reported to the IRS.
  • Rollovers -- To complete a rollover, you take the funds from one institution and deposit into another institution. A rollover may be done once per 12 month period regardless of how many IRAs you own. The redeposit must be completed within 60 days of distribution from the first institution. A rollover is also used when moving funds from a qualified pension plan to a Traditional IRA.

IRA Distributions

When you withdraw money from a retirement account, it is called a distribution. Distributions from a Traditional IRA are reported to the IRS as income and as such, may be subject to income tax. There may also be IRS imposed penalties except under special circumstances such as death, first time home purchase, disability, education and reaching age 59 ½.  Distributions from a Roth IRA have more complex tax implications. You should speak with your tax advisor, accountant or attorney before proceeding with this type of transaction.

Required Minimum Distributions (RMD)

The IRS requires that, beginning in the year you become 70 ½ years of age, you begin taking a “Required Minimum Distribution” from your Traditional IRA each year. This amount will vary based upon governmental tables. Our representatives will be happy to assist in calculating your RMD if requested.