Individual Retirement Accounts (IRAs)

Retirement may be here before you know it, but it won’t be here before you’re ready when you grow your savings with an FDIC-insured Individual Retirement Account¹. Choose the plan that’s right for the way you live today and the way you want to live when you walk out of the office and into your first day of retirement. View our current IRA rates and use the below information to help guide you before opening a retirement account.

Traditional IRA

All contributions may be fully or partially deductible based on your tax filing status and income¹
You’ll save on taxes now, but pay later when you make required withdrawals
You can contribute at any age if you have earned income
Your annual contribution limits are set by the IRS and include a catch up amount for those age 50 and older¹
Required Minimum Distributions (RMD) must begin at age 73

Roth IRA

You’ll pay taxes on your contributions now, but enjoy tax-free qualified withdrawals later¹
Contributions are never tax-deductible
You can contribute at any age if you have earned income below the IRS threshold¹
Your annual contribution limits are set by the IRS and include a catch up amount for those age 50 and older¹
There is no mandatory distribution at any age

	Traditional IRA	ROTH IRA
Who's Eligible	Anyone of any age with earned income No income ceiling is imposed	Anyone of any age with earned income that does not exceed the annual IRS income ceiling
Contribution Limit	Your annual contribution limits are set by the IRS, are subject to change, and include a catch up amount for those age 50 and above	Your annual contribution limits are set by the IRS, are subject to change, and include a catch up amount for those age 50 and above
Tax-Deductible Contributions	Fully deductible if not covered by an employer-sponsored plan Partially deductible if covered by an employer-sponsored plan and income is within certain limits	Not deductible for anyone
Tax-Advantaged Growth	Tax-deferred growth - No federal taxes due until normal distributions are taken	Tax-free growth - No federal taxes due when money is taken out, if account is open for five years, and you are at least 59 1/2 years old
Withdrawals prior to age 59 1/2	Subject to a 10% IRS penalty tax and taxed as ordinary income Some exceptions apply.	"Growth" portions of withdrawals may be subject to a 10% penalty tax and taxed as ordinary income Some exceptions apply.

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Traditional IRA

ROTH IRA

Who's Eligible

Anyone of any age with earned income

No income ceiling is imposed

Anyone of any age with earned income that does not exceed the annual IRS income ceiling

Contribution Limit

Your annual contribution limits are set by the IRS, are subject to change, and include a catch up amount for those age 50 and above

Tax-Deductible Contributions

Fully deductible if not covered by an employer-sponsored plan

Partially deductible if covered by an employer-sponsored plan and income is within certain limits

Not deductible for anyone

Tax-Advantaged Growth

Tax-deferred growth - No federal taxes due until normal distributions are taken

Tax-free growth - No federal taxes due when money is taken out, if account is open for five years, and you are at least 59 1/2 years old

Withdrawals prior to age 59 1/2

Subject to a 10% IRS penalty tax and taxed as ordinary income

Some exceptions apply.

"Growth" portions of withdrawals may be subject to a 10% penalty tax and taxed as ordinary income

Some exceptions apply.

Simplified Employee Pension (SEP) IRA

Contribution eligibility is limited to self-employed individuals and to eligible employers on behalf of their employees – no age ceiling
Your annual contribution limits are set by the IRS and are normally substantially higher than the limits for Traditional and Roth IRAs¹
You’ll save on taxes now, but pay later when you make withdrawals
Required Minimum Distributions (RMD) must begin at age 73 even if you still have earned income

Once you’ve determined the best plan for your future, choose an IRA certificate of deposit or savings account:

IRA Certificates of Deposit (CDs)

A Traditional IRA CD is a tax-deferred account that provides the benefits of a Traditional IRA (tax-deductible contributions, tax-deferred growth, FDIC insurance, etc.) and a CD account (fixed rate of interest, higher returns, set maturity date, etc.).
A Roth IRA CD is a tax-exempt account that provides the benefits of a Roth IRA (tax-free growth, no required minimum distributions, etc.) and a CD account (fixed rate of interest, higher returns, set maturity date, etc.).
Open your retirement account with a minimum balance of $500 for any term from 90 days to 60 months
Watch your investment grow with a fixed rate of interest for the duration of the term
Any additional deposits may only be made during the 10-day grace period following the maturity date

IRA Savings

With a low minimum balance to open and no bank early withdrawal penalty, the IRA Savings account offers benefits perfect for someone who is just starting to think about retirement or someone who may be looking for an alternative to the IRA CD.
IRA Savings accounts can be Traditional or Roth
Open your retirement account with a minimum balance of $25. Additional contributions of at least $25 may be made at any time, up to your annual maximum eligibility amount

IRA deposits are insured separately from other deposit accounts for FDIC insurance coverage, up to $250,000 for all IRAs owned by the same person at the same bank.

¹ Intended for informational purposes only. See IRS Publication 590 for further details or consult your tax advisor. First Commonwealth does not offer tax or legal advice.