Individual Retirement Accounts

A simple savings strategy for your up-and-coming or long-ways-off retirement.

BNC Bank offers 4 different IRA plans: Traditional, ROTH, Simplified Employee Pension Plans (SEP), and Coverdell Education Savings Account (CESA).

Traditional IRA

A traditional IRA is primarily an individual savings plan. Contributions are made up to a specified limit with the contribution tax deductible. Money invested and earned in a traditional IRA are subject to income taxes at the time of withdrawal. Withdrawals can be made without penalty once you reach the age of 59 1/2 years of age and you must begin withdrawing from your account when you reach the age of 70 1/2.

Deductibility for your contribution is based on IRS guidelines. All earnings on your Traditional IRA contributions remain tax deferred until you make withdrawals, and are then taxed as income for that year.

Roth IRA

A non-deductible account that features tax free withdrawals after five years for certain distribution reasons. To qualify for a Roth IRA, you must have earned income (or your spouse must have earned income).

Simplified Employee Pension Plans (SEP)

A retirement plan that is available to self-employed individuals and small businesses. A SEP-IRA is a written plan that allows a self-employed person to contribute towards his/her retirement and to contribute towards employee's retirements without the complexity of other plans.

Coverdell Education Savings Account (CESA)

The Coverdell Education Savings Account is a nondeductible account that features tax-free withdrawals for a very specific purpose such as a child's education expenses. These accounts were formerly known as Education Individual Retirement Accounts (IRAs) and at first glance, a CESA may look similar to traditional or ROTH IRAs. Higher education distributions are also permitted from these accounts, but while qualified higher education distributions from a traditional or ROTH IRA are only penalty tax-free, the same distribution from a CESA are penalty-free and federal income tax-free. Consult your tax or legal professional for further information regarding state or local income tax laws.

For additional information regarding your IRA accounts, please contact your tax advisor. 

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