IRAs

Features and Benefits

Rollover IRA

 

Traditional IRA

 

Roth IRA

 

SEP IRA

 

Description

Appeals to eligible investors who:

Want to move retirement funds from an employer-sponsored plan to an IRA CD

Anticipate being in a lower tax bracket in retirement, or

Meet the criteria for making tax-deductible contributions and are most interested in a current tax deduction

Expect their tax bracket to be the same or higher in retirement

Are most interested in passing IRA assets to their heirs

May not need their IRA assets to cover living expenses during retirement

Are self-employed individuals or business owners with employees.

Prefer a plan that is easy to set up and maintain

Minimum balance

$500.00


$500.00


$500.00

$500.00

Online Access

Account access to balances, and activity through AuburnBank’s online service

Account access to balances, and activity through AuburnBank’s online service

Account access to  balances, and activity through AuburnBank’s online service

Account access to  balances, and activity through AuburnBank’s online Service

Contributions

Annual Maximum Contribution

To preserve status as a "conduit" IRA, no annual contribution allowed

Otherwise, traditional IRA contribution limits apply

Lesser of 100 percent of your earned income, or:

In 2013, the contribution limit is $5,500

 

Aggregated with other IRA accounts (except Education Savings Accounts)

Lesser of 100 percent of your earned income, or: 

In 2013, the contribution limit is $5,500

Aggregated with other IRA accounts (except Education Savings Accounts)

Employer contributions only

Total contributions to each employee's IRA cannot exceed the lesser of $51,000 for 2013 (and subject to cost-of-living adjustments for later years) or 25% of gross income 

Catch-Up Provisions (for individuals age 50 and older)

No, if conduit IRA1

Otherwise, same as traditional IRA.

$1,000

 $1,000

No

Contribution Deadline

April 15 of the following year, the tax filing deadline.

April 15 of the following year, the tax filing deadline.

April 15 of the following year, the tax filing deadline.

The company's tax filing deadline, plus extensions.

Restrictions on Contributions

No contributions allowed for conduit IRAs

Otherwise, same as traditional IRA

Contributions can only be made prior to the year in which the IRA owner turns 70 ½

Must have earned income

No age requirements

Phased out for taxpayers with annual Adjusted Gross Income over $112,000 (single) and $178,000 (joint)

Must have earned income

Employer contributions only

Some employees may be excluded from this plan

Deductible Contributions?

Typically contains funds from another tax-advantaged plan (without additional contributions)

Subject to income limits and participation in an employer-sponsored plan

Contributions are not tax-deductible

Contributions are tax-deductible for the business, up to 20% of modified net earnings (self-employed) or 25% of salary (employees)

Withdrawals

Taxation on Withdrawals

Same as traditional IRA

Withdrawals are subject to current federal income taxes and a possible 10% penalty (if the participant is under age 59½)

Earnings and deductible contributions are taxed as ordinary income

10% federal tax penalty before age 59 ½ unless due to death, disability, eligible medical expenses, certain unemployed individual's health insurance premiums, limited "first time" home purchase, qualified higher expenses or IRS levy.

No tax on non-deductible contributions

Contributions may always be withdrawn tax- and penalty-free

Earnings are distributed tax-free and penalty free if held at least five years in the Roth IRA and either paid out after age 59 ½ or because of one of the following:

(1) Death
(2) Disability
(3) First home purchase

If earnings are taken earlier, they are subject to ordinary income tax and may be subject to a 10% penalty

Same as traditional IRA

Withdrawals are subject to current federal income taxes and a possible 10% federal tax penalty (if the participant is under age 59½)

Mandatory Distributions

Same as traditional IRA

Age 70 ½ or death

None during lifetime

Beneficiary (except spouse) must begin at IRA owner's death

Same as traditional IRA

Same as traditional IRA

Fees and Investment Charges

Set-up costs

None

None

None

None

Annual Fee

$0


$0


$0


$0