When was the last time you evaluated your retirement savings
goals? Do you know how much you need to save for a comfortable
retirement? If you are like most of us, you will need to replace at
least 80% of your pre-retirement income with dollars from several
sources like Social Security, a
company pension or savings plan and other personal savings.
Financial experts speculate that Social Security will provide only
a small percentage of the total amount a retiree may need to
maintain their pre-retirement lifestyle. This means your personal
retirement savings is a crucial component in helping you meet your
retirement needs. A powerful and sometimes overlooked vehicle for
retirement savings is the IRA.
Choosing the right IRA for you can depend on several factors
including your current and future tax bracket and the number of
years it will take you to retire. There are obvious benefits to
both, and our Personal Bankers can help you find the right IRA to
help you meet your retirement investment needs.
Sandy Spring Bank offers a wide variety of IRAs options that are
FDIC insured - including IRA Savings and Money Market accounts, and
CDs with maturities from 6 to 60 months. All deposit products
provide competitive interest rates.
A tax-deferred savings plan available to all individuals with
earned income under age 70 ½ and their spouses if the spouse is
also under the age 70 ½. The deduction for contributions made to a
traditional IRA depends on whether the participant and/or the
participant's spouse were covered for any part of the year by an
employer retirement plan. When covered by a retirement plan, the
deductible amount is also affected by how much income was earned
and by the tax return filing status (single or joint). An IRA owner
must begin taking required minimum distributions (RMD) from their
accounts the year they turn 70½.
A tax-free savings plan available to all individuals with earned
income and their spouses who meet the income requirements.
Participation in a retirement plan, other than lowering current
income and potentially making someone Roth IRA-eligible, does not
affect Roth IRA eligibility. Tax-free growth is available, and all
withdrawals are potentially income- and penalty-tax free.
A Savings Incentive Match Plan IRA permits employees of small
businesses to contribute a portion of their income through
individual payroll deductions. Contributions are placed in an IRA
on their behalf and accumulate tax-deferred. Employers also are
required to make contributions on each employee's behalf.
A Simplified Employee Pension is a retirement plan that allows
small-business owners and corporations to fund up to 25 percent of
compensation (maximum annual contribution dollar limits apply) on a
discretionary basis. Contributions are made to an IRA established
by each participant. All contributions are fully vested. Each
employee may set up his or her own IRA account, wherever he or she
wants, or the employer may establish an IRA for each
Many 401(k) plan participants do not realize that rollovers to
IRAs provide great flexibility and portability. Aside from the
potential to use the Stretch IRA option, an IRA can move to another
institution's IRA or another qualified plan. The account can be
converted into a Roth IRA, which then will generally eliminate
An IRA funded by a married taxpayer in the name of his or her
spouse who is unemployed or has less than the annual limit in
compensation. The couple must file a joint tax return for the year
The beneficiaries of your traditional IRA would acquire the
interest in your IRA. Special rules apply to a Beneficiary IRA.
Contributions may not be made to a Beneficiary IRA, a rollover to
or from another IRA is not permitted, and the proceeds must be
distributed and taxed within a specific period as established by
the Internal Revenue Code.
For further information about IRAs, including how to open one,
please contact one of our Personal Bankers.
*These are basic definitions of IRA accounts and do not
cover all possible tax consequences or IRS rules and regulations.
Please consult IRS Publication 590 for a complete listing of all
IRS rules and regulations regarding IRA accounts. Please consult
your tax advisor about possible tax benefits and consequences for
opening and contributing to or withdrawing from an IRA.
For more information: