IRA Account FAQs
An Individual Retirement Account (IRA) is a type of savings account that is designed to help you save for retirement and offers many tax advantages. There are two different types of IRAs: Traditional and Roth IRAs. The difference between a Traditional and a Roth IRA is that a Roth IRA contribution is not tax deductible. The proceeds from the Roth IRA are not taxable, whereas the proceeds from the Traditional IRA are subject to income tax.
For 2015 and 2016, your total contributions to all your traditional and Roth IRAs cannot be more than:
- $5,500 ($6,500 if you’re age 50 or older), Or
- Your taxable compensation for the year, if your compensation was less than this dollar limit.
These amounts can change annually, so please check with the Bank for updated information about future years.
One of Oak Bank’s customer service representatives can assist you in opening an individual retirement account and the requirements for doing so. You will need to determine which type of account you want to open, a Traditional or Roth, and if you qualify based on IRS guidelines. Your Modified Adjusted Gross Income (MAGI) is an income tax term that refers to the amount used to calculate your annual income tax liability. It’s also used to determine whether or not you’re allowed certain tax benefits.
Oak Bank offers competitive rate CDs for your IRA investments.