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IRA'S
At First State Bank Southwest we offer four different types of
IRA's. We offer the Traditional, Roth,
Simple, and SEP. An IRA is a savings plan that lets
you prepare for retirement. Your contributions may be tax deductible.
TRADITIONAL IRA
The Traditional IRA is an account which allows you to defer taxes
on your earnings until they are withdrawn.
- May contribute up to $5,000 for tax year
2010.
- May be tax deductible.
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ROTH IRA
A Roth IRA allows only nondeductible contributions but features
tax-free withdrawals for certain distribution reasons, after a five
year holding period.
- May contribute up to $5,000 for tax
year 2010.
- Not tax deductible
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SIMPLE IRA
A Simple IRA is an employee salary deferral plan that requires
a limited employer contribution. Though it is like a 401(K) in operation,
it is easier because it does not require any special discrimination
testing.
- Eligibility for Establishment is 100 or fewer
employees; no other plans; October 1 deadline
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SEP IRA
A Simplified Employee Pension (SEP) plan is a business retirement
plan that uses individual retirement account (IRA's) as the investment
vehicle. (An employer contributes money into its employee's traditional
IRA's.) The employer gets a tax deduction, and the contribution
is not income to the employee until distributed from the IRA.
- SEP has higher contribution limits.
- An employer (whether incorporated or unincorporated;
full-time or part-time) is eligible to establish a SEP plan.
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