IRA's

Traditional, Roth & Education IRA's are available at Fidelity Bank & Trust. We offer a time-open account where you have just one account to keep track of, or lock your rate into any CD term. The interest rate changes on the first day of each month. The interest is compounded quarterly and an annual status report is mailed. Contributions may be tax deductible and earnings can be tax free or tax deferred depending on the type of IRA chosen. IRA's are essential for a comfortable retirement. A minimum deposit of $50 is required to open an IRA account.

What's a ROTH IRA?
A Roth IRA is a nondeductible account that features tax-free withdrawals for certain distribution reasons after a 5 year holding period. You must have earned income and fall within certain income guidelines to contribute. No withdrawals are required once the account holder reaches 70 1/2 years of age. You may contribute up to $5,500 per qualified individual in 2013. Individuals age 50 and older may make additional contributions up to $1000 as a "catch-up" contribution. Earnings on the account may grow tax free if certain conditions are met.

What's a TRADITIONAL IRA?
A traditional IRA may be tax deductible. Deductibility is based on three factors; (1) active participation in an employer sponsored retirement plan, (2) federal income tax filing status (joint, single, married filing separately); (3) modified adjusted gross income. Earnings are tax deferred, and are taxable at the time of withdrawal. Withdrawals are required at the age of 70 1/2. Contributions up to $5,500 per qualified individual may be made in 2013. Individuals age 50 and older may make additional contributions up to $1000 as a "catch-up" contribution.

What's an EDUCATION SAVINGS ACCOUNT?
A Coverdell Education savings account is an account set up for the benefit of a child, to save money on a tax deferred basis, for higher education expenses. Contributions are not tax deductible, but withdrawals from the account for educational expenses are tax free and IRS penalty free. The maximum contribution allowed is $2,000, and must be made by April 15 for the previous year.

What's a SEP plan?

Under a SEP plan, an employer generally decides whether or not to make a contrbution in any year.  Contributions are directed into a Traditional IRA held by each employee.  Investment decisions and performance are the responsibility of each employee.  Contributions are usually the same percent of each employee's compensation(maximum of 25%), but some plans may instead specify a fixed dollar amount for all employees.  Employees who participate in a SEP plan are considered "active participants" in an employer-sponsored retirement  plan.  This may affect the deductibility of their Traditional IRA contributions, depending on their income.  SEP plan participation does not, however, reduce or eliminate an employee's aliblity to fund a Traditional IRA, and all Traditional IRA earnings are tax-deferred, regardless of SEP plan participation.  But more important, a SEP plan offers the advantage of a contribution that is potentially much larger than a Traditional IRA contribution. 2013 Contribution limits are $51,000.00 or 25% of compensation up to $250,000.00, the lesser of the two.

What is a SIMPLE IRA?

Savings Incentive Match Plan for Employees of small employers plan is a salary reduction plan. All types of businesses can establish SIMPLE IRA plans.  An employer must have 100 or fewer employees and have no other retirement plan.  There are two basic types of SIMPLE IRA plan contrubutions- voluntary employee salary reductions and required employer contributions.  2013 Deferral limits are $12,000.00 with $2,500.00 catch up over age 50.

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