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Retirement Accounts

People are living longer, and with uncertainty surrounding the future of Social Security, it is more important than ever for everyone to take charge of saving for retirement. Whether through an employer-sponsored retirement plan or an IRA, everyone must save for retirement.

There are many ways to save for retirement, the one that allows an individual the most flexibility and control over retirement assets is an Individual Retirement Account.


Traditional:  A Traditional IRA allows a person to deposit up to $5,500/year ($6,500 if you’re age 50 or over) and deduct the contribution from their personal income taxes (subject to certain rules and restrictions regarding participation in employee retirement plans). Investment gains are not subject to tax, however, all distributions are taxed as regular income when distributed and may be subject to early withdrawal penalties if taken prior to age 59 ½.

Roth: A Roth IRA allows for the same saving potential of up to $5,500/year ($6,500 if you’re age 50 or over), but the funds deposited are subject to income taxes for the year of the contribution. Future withdrawals are not subject to further tax if taken after age 59 ½. Distributions prior to age 59 ½ may be subject to early withdrawal penalties unless the distribution is taken for the purchase of a first home or a child’s education expenses

Rollover: Many people may have money saved in several former employers’ retirement plans. These funds can be combined into one Rollover IRA, and as long as no additional contributions are made, can later be rolled into another qualifying employer-sponsored retirement plan (if the plan allows it).

Standard Bank will act as custodian for Individual Retirement Accounts, whether they are Traditional IRAs, Roth IRAs or Rollovers from employer-sponsored retirement plans.  This allows for a great deal of investment flexibility, and all of the information regarding the investments is contained in one statement.

Simple Employee Pension (SEP) Plan

This is the simplest plan, allowing discretionary contributions by the employer. SEP contributions are placed into individual IRA accounts for the employees, who have complete control over the investment of their funds. The plan requires no government reporting or participant accounting. Once the funds are deposited into the IRA account, they are thereafter governed by IRA rules and regulations.