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.

Traditional IRA

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.

Roth IRA

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 participant.

Rollover IRA

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 further taxation.

Spousal IRA

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 of contribution.

Beneficiary IRA

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.


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