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Opening an Individual Retirement Account (IRA) is an easy way to get your retirement savings on track and possibly save on taxes.

Meredith Village Savings Bank offers you the control and direction you need for retirement planning—with the security of working with a trusted, local bank. Our knowledgeable CD/IRA Team will help you choose the right IRA and provide the guidance, tools, and resources you need to meet your retirement goals.

Note All MVSB IRAs are held in Certificate of Deposit (CD) accounts. This is not a complete list of the rules and requirements for IRAs. More info can be found at www.irs.gov and www.treas.gov

Traditional vs. Roth IRA – What’s right for you?

Traditional IRA – The Traditional IRA allows you to defer taxes on the earnings on your contributions until they are withdrawn. Also, depending on eligibility, contributions are tax deductible in the tax year for which you make them.

Roth IRA – The Roth IRA allows only nondeductible contributions and features tax-free withdrawals for certain distribution reasons after a five-year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, if you expect to be in a higher tax bracket when you take distributions in retirement, you may benefit more from a Roth IRA than from a Traditional IRA.

Note Please consult your tax advisor to determine which option which is best for your situation.

Other Factors to Consider:

Income Limits
Roth IRAs have income limits that are subject to annual Cost of Living Adjustments (COLA). You may make a Roth IRA contribution if you or your spouse have compensation and your modified adjusted gross income (MAGI) for any tax year does not exceed the prescribed limits. Refer to the chart below:

Roth IRA Eligibility MAGI Thresholds
Filing Status Tax Year Full Contribution Partial Contribution No Contribution
Single 2013 ≤ $112,000 Between $112,000 and $127,000 ≥ 127,000
Single 2014 ≤ $114,000 Between $114,000 and $129,000 ≥ $129,000
Married, Joint 2013 ≤ $178,000 Between $178,000 and $188,000 ≥ $188,000
Married, Joint 2014 ≤ $181,000 Between $181,000 and $191,000 ≥ $191,000
Married, Separate 2013 N/A < $10,000 ≥ $10,000
Married, Separate 2014 N/A < $10,000 ≥ $10,000
See IRS Publication 590 for more information on calculating Roth IRA contribution amounts.

Age Limits for Contributions
If you want to be able to contribute to your IRA for as long as you like, you need to consider the age limits placed on IRA contributions.

  • Traditional IRAs, contributions must stop the year you reach age 70 1/2 and after.
  • Roth IRAs, there is no age limit.

IRA Features – both Traditional and Roth

Contribution Limits 2014
Contribution limits are set by the IRS and the U.S. Treasury and are subject to COLA and are the same for both Traditional and Roth IRAs. You can contribute any amount up to 100% of your compensation or up to $5,500.00, whichever is less (aggregated between a Traditional and a Roth IRA). Additionally, if you are age 50 or older by the end of the taxable year, you are eligible to make catch up contributions.

You can make your contribution as a large deposit—or through smaller deposits of at least $20 as you wish throughout the year. If you would like to move your retirement assets from other qualifying accounts into an MVSB IRA, our knowledgeable staff can assist you with transfers and rollovers.

2014 Annual Contribution Limits: 2015 Annual Contribution Limits:
$5,500 – under 50 $5,500 + COLA* – under 50
$6,500 – 50+ $6,500 + COLA* – 50+

*Subject to annual cost-of-living adjustments (COLAs) if any.

FDIC Insurance
Traditional and Roth IRAs are insured by the Federal Deposit Insurance Corporation. The FDIC adds together all qualifying retirement accounts owned by the same person at the same insured bank and insures the total amount up to $250,000. For more information, visit www.fdic.gov.

Using your Traditional or Roth IRA funds

  • IRS Penalties - if you are under the age of 59 ½ and withdraw funds from your IRA account you may be subject to an IRS premature withdrawal penalty of 10%. If you are over the age of 59½ the IRS allows withdrawals without an IRS penalty. Consult your tax professional to help determine any IRS penalty.
  • Bank CD Early Withdrawal Penalty - If over the age of 59 ½ and your CD/IRA allows it, you may not have to pay the bank early withdrawal penalty if you withdraw funds from your account. A representative from MVSB’s CD/IRA department will be able to help you understand this process and all the options that are available to you.

Bump Up the Interest on Your Traditional or Roth IRA
If you are over the age of 59½ and rates have increased since you opened your IRA and your CD/IRA allows it, you have the option to request the current non-promotional rate. You may do this once in a 12-month period. You will need to call the bank to initiate this rate change (offer subject to withdrawal).

Automatically Renewable Time Account
At maturity, we will renew your term using the schedule below at the current non-promotional rate and term. We encourage you to contact us to learn about other options as well.

Original CD Term Renewing CD Term
5-11 months 6 month CD
12-23 months 12 month CD
24-35 months 24 month CD
36-47 months 36 month CD
48-59 months 48 month CD
60 months or longer 60 month CD

IRA Rates & Fees

Transfer (or direct rollover) to another financial institution: $25
Early Closing (less than 6 months) Fee: $50

Early Closing Assessment

Current Maturity of: Penalty:
5 months -1 year 3 months interest
13 -17 months 6 months interest
18 -23 months 12 months interest
24 – 35 months 18 months interest
36 – 47 months 2 years interest
48 – 63 months 3 years interest
The interest rate on the day that your CD is opened will remain fixed throughout the term of the CD. The annual percentage yield (APY) for your account assumes that interest will remain on the deposit until maturity. If you withdraw, you may reduce earnings.

Interest on your account will be compounded monthly and credited to your account on the anniversary day of its opening.

When you deposit a non-cash item (for example checks), interest begins to accrue on the non-cash item on the next business day after the deposit is received. Deposits you give us on a weekend are treated as received the next business day.

If you close your account before interest is credited, you will receive the accrued interest. A penalty may apply.

Contact our knowledgeable CD/IRA Team to find out which IRA options are right for you.