Community Bank offers Traditional, Roth IRA’s as well as Coverdell Education Savings Accounts.   These are retirement and education savings vehicles established by individual taxpayers.  It’s never too early to save for your future.

A Traditional IRA is an account that allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred.  Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status and other factors.

• Earnings grow tax-deferred
• Contributions may be tax-deductible
• Distributions are taxed at ordinary income rates

A  Roth IRA is a retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawal.

• Earnings grow tax-deferred
• Contributions are not tax-deductible, but can be removed at any time
• Qualified distributions are tax-free

Coverdell Education Savings Account is a tax-deferred trust account created by the U.S. government to assist families in funding educational expenses for beneficiaries 18 years old or younger. Contribution per year for any single beneficiary is $2,000.00.

• Potentially tax-efficient way to contribute up to $2000.00 per year per beneficiary for education expenses
• CESA distributions are tax free if they are used for qualified education expenses at an eligible educational institution.

Simplified Employee Pension (SEP) plans can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. Under a SEP, an employer contributes directly to traditional individual retirement accounts (SEP-IRAs) for all employees (including themselves). A SEP does not have the start-up and operating costs of a conventional retirement plan and allows for a contribution of up to 25 percent of each employee’s pay.

• The employer makes contributions to the SEP IRA
• Contributions are tax deductible for the employer

If self-employed you can contribute to a SEP IRA on your own behalf.