IRAs

Traditional IRA

A Traditional IRA is a tax-deferred retirement savings account that can be used by anyone who has earned income, or someone whose spouse has earned income.

Traditional IRAs can be transferred from one financial institution to another without a penalty as long as the funds are sent directly to the receiving bank as permitted by law. Traditional IRAs allow your contributions to grow tax-deferred and may be 100% deductible. Investors should obtain the advice of a tax planner before opening an IRA. Generally anyone who may retire in a high tax bracket would likely choose a Roth IRA. Individuals retiring in a lower tax bracket may favor the Traditional IRA.*

Benefits of a Traditional IRA:

  • Distributions before the age of 59 1/2 are generally taxable, but penalty-free for one of the following circumstances:
    • Incurring a disability
    • Payment for certain health insurance, medical and higher education expenses
    • Payment for a first home purchase
  • IRS Required Minimum Distributions are mandatory after the age of 70 1/2.

Certain penalties may apply if the Traditional IRA is liquidated for reasons other than those listed above.

Call Home Savings Bank at 608.282.6000 to learn more.


*Please seek the assistance of a tax advisor if you have additional questions regarding tax implications.


Roth IRA

This is a retirement planning tool for anyone who has earned income, whether yourself or your spouse.

How to use this product: Investors should obtain the advice of a tax planner before opening a Roth IRA. Generally anyone who may retire in a high tax bracket would likely choose a Roth IRA. Individuals retiring in a lower tax bracket may favor the Traditional IRA over a Roth IRA.

Benefits of product:

  • Contributions are not tax deductible, but the earnings are free as long as:
    • The funds have been in the account for at least 5 years
    • You are over the age of 59 1/2 , disabled or a first time home buyer.
    • Education and certain medical expenses may also be an exception to avoid tax consequences

If the funds are withdrawn for any other reason than listed above, penalties and taxes may apply.

Call Home Savings Bank at 608.282.6000 to learn more.