Minnwest Bank

Individual Retirement Accounts (IRA)

The key to building a retirement nest egg is beginning early and contributing annually.  If you're eligible, IRAs can offer you some tax advantages.  At Minnwest, we offer two different IRAs.  A Minnwest representative can get you started and explain the details.

Whether it's a Traditional or Roth IRA, 2011 contributions are:

Individual: $5,000 ($6,000 if over age 50)
Married filing jointly: $10,000 (up to $5,000 each) ($12,000 or $6,000 each if over age 50)

Traditional IRA

The main advantage of a Traditional IRA is that contributions are tax-deductible (based on retirement plan coverage, adjusted gross income and filing status).  If you are covered by an employer-sponsored plan or your adjusted gross income is too high, you contributions may not be tax deductible.*  Your  initial contributions and interest earnings are subject to taxation when you begin withdrawing funds at retirement. 

Primary advantage: Contributions may be tax-deductible based on your situation.

Roth IRA

Roth IRAs primarily differ from Traditional IRAs in that the contributions are not tax-deductible, but all the interest earned on the account is tax-exempt.  When you begin taking qualified withdrawals from an IRA, all the funds, including interest earned, will be tax-free.  This is quite an advantage when every dollar counts if you are on a fixed income in later years.  There are some income eligibility limits for a Roth IRA, especially if you are in a higher wage bracket.  Our Minnwest representatives can walk you through them.

Primary advantage:  Interest earned on Roth IRA is tax exempt

* Consult your tax advisor for advice on deductibility in your situation.