Roth IRAs

For people who want more discretion over when they take distributions from their retirement account, a Roth IRA may be an ideal option. You can invest up to $5,500 of earned income, tax-free (or up to $6,500 if you are over 50), and unlike Traditional IRAs you are not required to take distributions at age 70 ½, and you can continue making contributions with earned income at that point. Speak with a professional at First National to see if a Roth IRA is right for you.

Account Features:

  • Individuals can invest up to $5,500 of earned income, tax-free. Those 50 and over can contribute up to $6,500
  • Unlike a Traditional IRA, there is no requirement to take a minimum distribution at age 70 ½
  • Anyone with earned income is eligible
  • Contributions are not tax-deductible
  • Traditional IRAs can generally be converted to Roth IRAs, although tax consequences may apply
  • Funds can be withdrawn without penalty once you reach the age of 59 ½, or before that subject to a 10 percent penalty unless exceptions apply††
  • A qualified Roth distribution is a distribution of assets that are held in a Roth IRA for at least five taxable years (beginning with the first taxable year for which the Roth IRA holder made a Roth IRA contribution of any kind to any Roth IRA) and one of the following events occurs:
    1. Attainment of age 59 ½
    2. Disability
    3. Qualifying first time home purchase
    4. Death
  • A qualified distribution from a Roth IRA may be withdrawn tax and penalty free (bank fees may apply if you are breaking terms before account maturity)

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† Certain qualifications apply. Consult your tax advisor for more information.

†† Exceptions allowing for non-penalty early withdrawals include disability, qualifying medical expenses (under certain conditions), qualifying education expenses, unemployment (under certain conditions), qualifying first home purchase, and death.