Individual Retirement Account

Which IRA Is Better?

The question many investors ask is, “Which is better – a traditional IRA or a Roth IRA?” Both have their advantages depending upon your retirement goals. For most people, the bottom line is taxes. Do you want to pay now or pay later in retirement? The answer seems easy – whenever your tax bracket is lower. However, the challenge is guessing what your taxes may be in the future. If you think your taxes will stay the same or be higher, the Roth IRA has the potential for a tax-free earnings advantage. First Federal can help you with any additional questions. Source: The Hartford

Traditional IRA

Features & Contributions

  • Earnings are tax-deferred
  • Contributions may be tax deductible1
  • You must have earned income to make a contribution
  • Customers who are age 50 or over may make Catch-Up Contributions
  • Contributions for the previous tax year may be made up to April 15th of the current year
  • Contributions are 100% of earned income or based upon the following table, whichever is less:
Tax YearStandard LimitAdditional Catch-Up Contribution LimitTotal Contribution Limit for Age 50 or Over
2024$7,000 + COLA2$1,000 $7,000 + COLA2 + $1,000

Rollovers, Transfers & Distributions

  • Funds from other qualified retirement plans may be rolled over into a Traditional IRA
  • Funds from Traditional IRAs at other institutions may be transferred or rolled over into a Traditional IRA at First Federal
  • Distributions taken prior to the IRA owner reaching age 59½ are generally subject to a 10% IRS penalty
  • IRA owners reaching age 73 are required to begin taking minimum distributions based upon their life expectancy

Roth IRA

Features & Contributions

  • Earnings are tax-deferred
  • Contributions are not tax-deductible
  • Customers reaching age 73 are not required to take distributions
  • You must have earned income to make a contribution
  • Contributions for the previous tax year may be made up to April 15th of the current year
  • In general, contributions may be made up to 100% of earned income or the amount listed in the following table.
Tax YearStandard LimitAdditional Catch-Up Contribution LimitTotal Contribution Limit for Age 50 or Over
2024$7,000 + COLA2 $1,000 $7,000 + COLA2 + $1,000

Rollovers, Transfers & Conversions

  • Funds from Roth IRAs at other institutions may be transferred or rolled over into a Roth IRA at First Federal
  • Traditional IRA funds may be converted to a Roth IRA. This transaction may be taxable1
  • Customers reaching age 73 are not required to take distributions
  • Qualified distributions from a Roth IRA may be tax and/or penalty-free

 

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Deposit Operations Support strives to provide you with exceptional customer service.  We are available 8:00 am to 5:00 pm CST Monday through Friday (excluding bank holidays) to assist with inquiries and requests regarding these products.

 

Please contact us by calling 812-492-8200 or via email at depositoperations@fbei.net.

1 Please consult your tax adviser.
2 Cost-of-living adjustments (COLA).

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Lost/Stolen ATM Card

Please contact us Monday through Friday from 8:00 AM CST to 5:00 PM CST at (812) 492-8123, if your ATM or Visa Debit card is lost or stolen. After normal business hours, call (800) 554-8969.