Individual Retirement AccountsRoth IRA

What is a Roth IRA?

• A Roth IRA is a type of Individual Retirement Plan that allows eligible individuals to invest up to $5,000 of earned income, tax-free. Unlike Traditional IRAs, you are not required at age 70 1/2 to take a minimum distribution and may continue to make contributions with earned income.
• If you are 50 years or older, you may contribute up to $6,000.
  

Who is eligible to contribute and how much?

• Any individual who has earned income.
• You may contribute up to a maximum of $5,000 of earned income if your Modified Adjusted Gross Income (MAGI) is no more than $166,000 (married filing jointly) or $114,000 (single filer).
• Even if your spouse is not working, you may contribute up to $5,000 into your spouse's IRA, if your earned income allows.
• If you are 50 years or older, you may contribute up to $6,000.

Are my contributions tax-deductible?

• Contributions to Roth IRAs are not tax-deductible.

Can I convert my existing Traditional IRA into a Roth?

• You are eligible to convert your existing Traditional IRAs into a Roth IRA if your Modified Adjusted Gross Income (single or married filing jointly) does not exceed $100,000 in the year of the conversion.
• If you are married filing separately, you are not eligible to convert your existing Traditional IRAs into a Roth IRA.
  

What are the tax consequences?

• When you convert or rollover an existing IRA into a Roth IRA, you must pay taxes on any earnings and pretax contributions that you convert.

When can I withdraw my funds?

• You can withdraw funds at any time before reaching 59 ½, but your withdrawal is then subject to a 10% IRS early withdrawal penalty and any additional bank penalties that may apply.
• The following exceptions apply to the early withdrawal penalty:

Disability Qualifying medical expenses (under certain conditions) Qualifying education expenses Unemployment (under certain conditions) Qualifying first home purchase Death Levy

What is a qualified Roth distribution?

 A qualified Roth distribution is a distribution of assets that are held in a Roth IRA for at least five taxable years (beginning with the first taxable year for which the Roth IRA holder made a Roth IRA contribution of any kind to any Roth IRA) and one of the following events occurs:

• Attainment of age 59 ½
• Disability
• First time home purchase
• Death

A qualified distribution from a Roth IRA may be withdrawn tax and penalty free* (bank fees may apply if you are breaking terms before account maturity).

* Certain qualifications apply. Consult your tax advisor for more information.

What is a nonqualified Roth distribution?

A Roth IRA distribution which does not meet both of the qualification requirements is a 'nonqualified' distribution.

Am I required to take distributions?

• Unlike Traditional IRAs, there is no required minimum distribution at age 70 1/2.
• Your earnings can continue to grow until you need them.
  

What are some other IRA investment options?

First National offers a wide variety of non-FDIC insured investment products and services through First National Investments & Planning.* U.S. Treasury Securities Municipal Bonds Stocks Options Mutual Funds Annuities * Products offered by PrimeVest Financial Services, Inc., located at First National Investments & Planning, at the Bank, are not federally insured by the FDIC, the Federal Reserve Board, or any other agency; are not deposits or guaranteed by the Bank or PrimeVest Financial Services, Inc.; are subject to investment risks, including possible loss of principal invested. Financial Advisors at First National Investments & Planning are employees of the Bank and registered representatives of PrimeVest Financial Services, Inc.