With the right plan, retirement can be one of life’s greatest rewards. With a Traditional IRA with First South Bank, you pay no taxes on your earnings until you withdraw ¹ them at retirement.

This site is provided for your information and does not constitute tax advice. Please consult with your accountant or tax advisor for specific guidance. Withdrawals from an IRA made prior to age 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.

Additional Traditional IRA Benefits:

• Contributions may be tax-deductible.²
• Everyone under age 70½, with earned income, is eligible to contribute. There is no income limit.
• By deferring taxes until you retire, you may gain higher compounded growth than in a regular investment.
• Choose from variety of non-FDIC insured investments through First South Bank Wealth Management, including stocks, bonds, mutual funds, and other investments, to make the most of your contributions.
• Also choose from bank products such as FDIC-insured CDs and money market accounts.
• Receive professional guidance from a First South Bank Wealth Management Consultant.

 When to Consider a Traditional IRA:

• You are eligible to deduct your contribution and you anticipate your tax rate at the time of withdrawal will be lower than your current tax rate.
• Your Modified Adjusted Gross Income (MAGI) is too high to contribute to a Roth IRA.³

1 Withdrawals from an IRA made prior to 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.
2 Contributions may not be tax-deductible for those covered by employer-sponsored retirement plans with incomes over certain levels. Spouses of retirement plan participants who are not covered by an employer plan are eligible for the tax deduction at higher income limits. Withdrawals prior to age 59½ may be subject to a 10% IRS penalty and additional ordinary tax.
3 IRA holders age 50 or older may contribute additional amounts in excess of the basic annual contributions.

The ideal retirement plan allows you to use your money when you need it most. A Roth Individual Retirement Account (IRA) provides you with flexibility and convenience. Unlike a Traditional IRA, contributions to a Roth IRA are allowed after age 70½ as long as you have earned income.

This site is provided for your information and does not constitute tax advice. Please consult with your accountant or tax advisor for specific guidance. Withdrawals from an IRA made prior to age 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.

Additional Roth IRA Benefits:

• Pay no taxes or penalties when you meet the requirements of a qualified withdrawal.¹
• Choose from variety of non-FDIC insured investments through First South Bank Wealth Management, including stocks, bonds, mutual funds, and other investments, to make the most of your contributions.
• Also choose from bank products such as FDIC-insured CDs and money market accounts.
• Receive professional guidance from a First South Bank Wealth Management Consultant.

When to Consider a Roth IRA:

• You are a middle-income investor who wants tax-free earnings.
• You want to make contributions after age 70½. 

Economic Growth and Tax Relief Reconciliation Act of 2001
The Economic Growth and Tax Relief Reconciliation Act of 2001 changed IRA contribution limits as indicated below.

IRA Annual Contribution Limits (Traditional and Roth):

• 2008 and thereafter $5,000 (indexed beginning in 2009)

IRA Catch-up Contributions – Age 50 and Older (Traditional and Roth)²:

• 2006 and thereafter $1,000

Required Minimum Distributions (RMDs)

Traditional, SEP, and SIMPLE IRAs are tax-deferred accounts. IRA regulations state that holders of these IRAs must begin RMDs at age 70½. The first required distribution must be taken by April 1 of the year following attainment of age 70½. After the first distribution, annual RMDs must be taken by December 31 of each year. Failure to take the RMD may result in a 50% IRS tax penalty on the difference between the RMD and the amount actually withdrawn. Roth IRAs are exempt from required distributions during the owner’s lifetime.

For more information on Personal Finance Options, click here to send us your questions, or contact us at 1-800-946-4178.

1 Withdrawals from an IRA made prior to 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.
2 Contributions may not be tax-deductible for those covered by employer-sponsored retirement plans with incomes over certain levels. Spouses of retirement plan participants who are not covered by an employer plan are eligible for the tax deduction at higher income limits. Withdrawals prior to age 59½ may be subject to a 10% IRS penalty and additional ordinary tax.
 

Simplified Employee Pension (SEP) accounts are a pension plan established by a business where the employer deposits contributions into an account for the employees of the company and is tax deductible by the employer. They provide maximum flexibility for contributions allowing you to set aside a different percentage each year. It is typically preferred by self-employed individuals or business owners with only a few employees.

Any employer including a sole proprietor with no employees can establish a SEP for their own benefit. The employer elects to pay all employees involved the same percent or the same dollar amount across the board. Contributions to a SEP for yourself and your employees are tax-deductible as a business expense.

This site is provided for your information and does not constitute tax advice. Please consult with your accountant or tax advisor for specific guidance. Withdrawals from an IRA made prior to age 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.

SEP Benefits as an Employer:

• A SEP can provide a significant source of income at retirement.
• Contributions to a SEP are tax deductible and your business pays no taxes on the earnings on a SEP's investments.
• You are not locked into making contributions in future years. You can decide each year whether to pay into the SEP and how much to contribute.
• Once you put money into a SEP you have no further responsibility for the amounts contributed. The funds are managed by a financial institution.
• A SEP can be established and operated without the administrative expenses, consulting fees or commissions usually associated with maintaining a conventional retirement plan.
• You ordinarily do not have to file any documents with the government. SEPs can be set up by sole proprietors, partnerships and corporations, including S-corporations.
• You can deduct contributions to a SEP for a previous tax year if you make contributions by the due date of the employer's tax return, including any extensions

SEP Benefits for Employees:

• The money you contribute to your employees' SEP accounts, as well as the investment earnings, belongs to them, even if they stop working for you.
• Employers' contributions to the SEP-IRA are not included in employees' income for income tax purposes.
• Employees pay no taxes on the amounts in their SEP accounts until they start withdrawing the funds.
• Employees can change the financial institution where their SEP is invested. In case of an employee's death, the assets in a SEP will go to someone the employee has chosen.
• SEP contributions can continue until employees retire, but they must start withdrawing assets from a SEP when they reach age 70½.
• Choose from variety of non-FDIC insured investments through First South Bank Wealth Management, including stocks, bonds, mutual funds, and other investments, to make the most of your contributions.
• Also choose from bank products such as FDIC-insured CDs and money market accounts.
• Receive professional guidance from a First South Bank Wealth Management Consultant.

 
For more information on Personal Finance Options, click here to send us your questions, or contact us at 1-800-946-4178.

Your retirement plan assets may be one of the single largest sums of money you’ll ever accumulate, which makes managing these investments one of the most important decisions of your working life. When you change jobs, a First South Bank Rollover^* Individual Retirement Account (IRA) may be the best solution for your retirement plan distribution. It helps protect your assets from taxes and penalties may ensure that savings continue tax-advantaged growth, and frequently offers the widest range of investment choices, so you have the flexibility to create an IRA that suits you.

• Choose from variety of non-FDIC insured investments through First South Bank Wealth Management, including stocks, bonds, mutual funds, and other investments, to make the most of your contributions.
• Also choose from bank products such as FDIC-insured CDs and money market accounts.
• Receive professional guidance from a First South Bank Wealth Management Consultant.

For more information on Personal Finance Options, click here to send us your questions, or contact us at 1-800-946-4178.

*Rollover IRA refers to a Traditional IRA in which qualified retirement plan funds are contributed.