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CD’s & IRA’s

Certificates of Deposit and IRA’s are smart additions to your investment portfolio.

Certificates of Deposit

Deposit Rate Sheet

From 3 months to 5 years, our certificates of deposit have a minimum investment amount (usually $1,000). Interest payments vary with the term of the CD.

Contact St. Ansgar State Bank for current interest rates and terms at (641) 713-4501.

  • Free Online Banking
  • Initial deposit of $1,000
  • The security of a fixed return
  • Choose the term that meets your needs:
    • Longer terms offer potentially higher interest rates
    • Shorter terms mean quicker access to your funds

Individual Retirement Accounts (IRA)

An individual retirement account (IRA) is a personal savings plan that offers specific tax benefits while helping you achieve your retirement goals. IRAs are one of the most powerful retirement savings tools available to you. Even if you are contributing to a 401(k) or other plan at work, you should also consider investing in an IRA.

Benefits

  • Contributions can be tax-deductible or non-tax deductible (Consult with your tax advisor)
  • Earnings grow tax-deferred until withdrawn after age 59 1/2, at which time they are taxed at your current rate

Eligibility

  • Anyone under age 70 1/2 who has earned income equal to or greater than their IRA contribution amount
  • If you contribute to an employer-sponsored plan such as a 401(k) you may still be eligible to contribute to a Traditional IRA
  • If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, you can contribute to a Traditional IRA

Roth IRA

An individual retirement account (IRA) is a personal savings plan that offers specific tax benefits while helping you achieve your retirement goals. IRAs are one of the most powerful retirement savings tools available to you. Even if you’re contributing to a 401(k) or other plan at work, you should also consider investing in an IRA.

Roth IRA contributions are not deductible, but distributions (including earnings) can be tax free at retirement if certain circumstances exist. (Earnings you withdraw are tax-free after age 59 1/2 and the account has been established for a minimum of five years).

Benefits

  • Contributions can be withdrawn at any age without taxes or penalties
  • Earnings you withdraw are tax-free after age 59 1/2 as long as the account has been established for a minimum of five years
  • Contributions can be made after age 70 1/2 as long as you have earned income
  • No required minimum distributions during your lifetime
  • Beneficiaries may pay no income tax on proceeds

Eligibility

  • Anyone who has earned income equal to or greater than their IRA contribution amount
  • If you contribute to an employer-sponsored plan such as a 401(k), you are still eligible to contribute to a Roth IRA as long as you meet the income limits
  • If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, you can contribute to a Roth IRA

SIMPLE IRA Plan

A SIMPLE IRA plan (Savings Incentive Match Plan for Employees) allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.

Overview

  • Available to any small business — generally with 100 or fewer employees
  • Easily established by adopting Form 5304-SIMPLE, 5305-SIMPLE, a SIMPLE IRA prototype or an individually designed plan document
  • Employer cannot have any other retirement plan
  • No filing requirement for the employer
  • Contributions – Call to discuss details

How does a SIMPLE IRA plan work? Example: Elizabeth works for the Rockland Quarry Company, a small business with 50 employees. Rockland has decided to establish a SIMPLE IRA plan for its employees and will match its employees’ contributions dollar-for-dollar up to 3% of each employee’s compensation. Under this option, if a Rockland employee does not contribute to his or her SIMPLE IRA, then that employee does not receive any matching employer contribution.

Elizabeth has a yearly compensation of $50,000 and contributes 5% of her compensation ($2,500) to her SIMPLE IRA. The Rockland matching contribution is $1,500 (3% of $50,000). Therefore, the total contribution to Elizabeth’s SIMPLE IRA that year is $4,000 (her $2,500 contribution plus Rockland’s $1,500 contribution).

Pros and Cons

  • Easy and inexpensive to set up and operate
  • Employees share responsibility for their retirement
  • No discrimination testing required
  • Inflexible contributions
  • Lower contribution limits than some other retirement plan

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