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Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs)

Retirement is a beautiful thing. An IRA from F & M Community Bank helps keep it that way by establishing financial backing for your future dreams. We offer both traditional and Roth plans, plus an education fund for college expenses — each with different associated tax advantages.

Benefit from interest above standard savings, helping you get closer to the perfect future that you deserve. Whether your ideal retirement looks like a golf course, a boat, or relaxing down time with the family, keep it within your reach by starting to set aside in an F & M IRA early.


Summary
  • Tax-advantaged retirement savings*
  • Competitive interest above standard savings rates
  • Traditional and Roth IRA options
  • No setup fees
  • No monthly or annual maintenance charges
  • $5,000 contribution limit per year
  • Additional $1,000 "catch-up" contribution allowed for ages 50+
  • Funds can be used to purchase CDs or fund savings accounts within an IRA
  • No minimum deposit to open account
  • $1,000 minimum deposit to open a CD within the IRA

*Consult a tax adviser.

Traditional vs. Roth

There are advantages to both traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.

Traditional IRA

  • No income limits to open
  • No minimum contribution requirement
  • Contributions are tax deductible on state and federal income tax*
  • Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
  • Withdrawals can begin at age 59 ½
  • Early withdrawals subject to penalty**
  • Mandatory withdrawals at age 70 ½

Roth IRA

  • Income limits to be eligible to open Roth IRA***
  • Contributions are NOT tax deductible
  • Earnings are 100% tax free at withdrawal*
  • Principal contributions can be withdrawn without penalty*
  • Withdrawals on interest can begin at age 59 ½
  • Early withdrawals on interest subject to penalty**
  • No mandatory distribution age
  • No age limit on making contributions as long as you have earned income

*Subject to some minimal conditions. Consult a tax advisor.

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

***Consult a tax advisor.

Coverdell Education Savings Account (CESA)

Create an easier transition into college for yourself and your student by setting up a savings account early. A Coverdell Education Savings Account (CESA) provides a tax-free safe place to grow competitive interest and also financial confidence for a new stage in life.

  • Set aside funds for your child's education
  • No setup or annual fee
  • Interest grows tax-free
  • Withdrawals are tax-free and penalty-free when used for qualified education expenses*
  • Designated beneficiary must be under 18 when contributions are made
  • To contribute to a CESA, certain income limits apply**
  • Contributions are not tax deductible
  • $2,000 maximum annual contribution per child
  • The money must be withdrawn by the time he or she turns 30***
  • The CESA may be transferred without penalty to another member of the family
  • No minimum deposit to open

*Qualified expenses include tuition and fees, books, supplies, board, etc.

**Consult your tax advisor to determine your contribution limit.

***Those earnings are subject to income tax and a 10% penalty.