An IRA (Individual Retirement Account) is a great way to save for retirement if you do not have the opportunity to benefit from a 401k or if your employer doesn’t offer one, or even if you would like to save more for retirement.

FSB offer three types of IRAs. A traditional IRA which will shelter the money invested toward your retirement. A Roth IRA is nondeductible account that features tax-free withdrawals for certain distribution reasons. An educational IRA allows you to save money towards a child's higher education.

FSB can set up an IRA with as little as $500.  Our rates are great right now.

With a CD IRA, you pick your term and your rate.  If you want to see what rates do before you commit, you can open a Money Market IRA.  You need to decide what works better for you and your specific circumstance. FSB is here to help; however, it is always best to check with your tax professional about deductibility of withdrawals and deposits.

Come in today to open your IRA

Frequently ask questions:

How much money can I contribute to my IRA?

Tax years 2006 and 2007: You can contribute $4,000 per tax year if you are younger than 50 and $5,000 per tax year if you are older than 50.

Tax year 2008: You can contribute $5,000 if you are younger than 50 and $6,000 if you are older than 50.

Do I have to deposit my maximum contribution all at once?

No. You can make monthly, weekly, even daily deposits if you would like.

Who is eligible for a Traditional IRA?

You can open a Traditional IRA if:

• You are younger than 70 ½ for the entire tax year and
• You or your spouse have earned income

Who is eligible for a Roth IRA?

You can open a Roth IRA if:

• You or your spouse have earned income and
• Your modified adjusted gross income does not exceed the limits*

* Roth Contribution Chart

Modified Adjusted Gross Income	Single	Married, filing jointly	Married filing separately
Less than $10,000	Full contribution	Full contribution	Phaseout
$10,000-$99,000	Full contribution	Full contribution	No contribution
$99,001-$114,000	Phaseout	Full contribution	No contribution
$114,001-$156,000	No contribution	Full contribution	No contribution
$156,001- $165,999	No contribution	Phaseout	No contribution
$166, 000 or over	No contribution	No contribution	No Contribution

Source: Which IRA is right for you? © 1997 Wolters Kluwer Financial Services- Bankers Systems ™  IRA-BRO-COMP rev. 10/01/2006

What is earned income?

Earned income is your salary you earn as an employee; the net income you make if you are self employed, and taxable alimony. Rental income, interest, and dividends are not considered earned income.

As always, check with your tax professional to determine your earned income eligibility.

What is the benefit of having a Roth IRA?

While you do not get tax deductible contributions, a Roth IRA gives you the benefit of tax-free qualified withdrawals.  This includes any earnings on your Roth.  You do, however have to wait five years before making the first withdrawal on your Roth. There is no age limit on the Roth.

As always, check with your tax professional about tax-free withdrawals from your Roth IRA.

Are there any penalties for taking money out of a Roth?

If your withdrawal is not a qualified withdrawal, there is a ten percent penalty. Bank penalties may also apply.

What is a qualified withdrawal?

Any of the following is considered a qualified withdrawal:

• Distributions taken when and after you turn 59 ½
• Distributions to your beneficiary after your death
• Distributions taken if you are disabled
• Distribution taken for first-time home buyer ($10,000 max)
• Equal periodic payments
• Qualified Reservist Distributions
• Medical expenses over 7.5% of your adjusted gross income
• Health insurance premiums for certain unemployed individuals
• Higher education expenses
• IRS levies

As always, check with your tax professional before taking a distribution from your IRA to make sure it is a qualified distribution in your specific circumstance.

Do I ever have to take money out of my Roth IRA?

No, there is no required minimum distribution for the Roth IRA.

What is the benefit of a Traditional IRA?

A Traditional IRA allows you to take tax deductions on the money you put into your IRA, however; you will have to pay taxes on money you withdraw later.

As always, check with your tax professional on the deductibility of IRA deposits and withdrawals.

Do I have to pay penalties on withdrawals from my Traditional IRA?

If your withdrawal is not one of the exceptions and if you are younger than 59 ½, then there is a ten percent penalty.

Bank fees may also apply.

What are the exceptions?

An exception or qualified distribution is:

• Distributions taken when and after you turn 59 ½
• Distributions to your beneficiary after your death
• Distributions taken if you are disabled
• Distribution taken for first-time home buyer ($10,000 max)
• Equal periodic payments
• Qualified Reservist Distributions
• Medical expenses over 7.5% of your adjusted gross income
• Health insurance premiums for certain unemployed individuals
• Higher education expenses
• IRS levies
• A Roth IRA rollover

As always, check with your tax professional before taking a distribution from your IRA to make sure it is a qualified distribution in your specific circumstance.

When do I have to take money out of my IRA?

Once you turn 70 ½ years of age, you must take required minimum distributions from your Traditional IRA.

Can I have both a Roth and a Traditional IRA?

Provided you meet the criteria for a Roth, yes you can have both a Roth and a Traditional IRA.

What if I have a 401k I want to roll over?

We can do that for you. Bring in the information about your current 401k and we take care of the paperwork to get it moved here.

What if I want to move my existing IRA to FSB?

We can take care of that for you. Bring in the information on your current IRA and we take care of the paperwork to move it here.

How do I set up an IRA at Farmers State Bank?

We can set up an IRA with as little as $500.  Rates are great right now.

With a CD IRA, you pick your term and your rate.  If you want to see what rates do before you commit, you can open a Money Market IRA.  You need to decide what works better for you and your specific circumstance. We are here to help; however, it is always best to check with your tax professional about deductibility of withdrawals and deposits.

What if I have more questions?

Give us a call, stop by, or pop us an email.  We are here to help. Our qualified staff is ready to give you the information you need to make your decisions.