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Depending on the type of IRA CD you choose, contributions may be tax-deductible and will grow either tax-deferred or tax free!
| Traditional IRA | Roth IRA | |
|---|---|---|
| Age Anyone with Earned Income Can Contribute | Anyone, regardless of income level, even after age 72. | Anyone, even after age 72. |
| Spouses with One Earned Income Can Contribute For Both | Yes | Yes |
| Contributions After Age 72 | Allowed | Allowed |
| 2025 Maximum Annual Contributions (The maximum can be contributed to one IRA type or the other – or – split between both. For ages 50 and over, the amount includes $1,000 catch-up). | Under 50 - $7,000 50 and Over - $8,000 | Under 50 - $7,000 50 and Over - $8,000 |
| 2024 Maximum Annual Contributions (The maximum can be contributed to one IRA type or the other – or – split between both. For ages 50 and over, the amount includes $1,000 catch-up). | Under 50 - $7,000 50 and Over - $8,000 | Under 50 - $7,000 50 and Over - $8,000 |
| Catch-up Contribution Limits for Anyone Age 50 and Over | Up to $1,000 | Up to $1,000 |
| Contribution Restrictions (May be limited depending on your Modified Adjusted Gross Income) | Yes (If active participant in employer retirement plan) | Yes |
| Contribution Deadlines (Contributions can be made between Jan 1 and the date your tax return is due for that tax year, excluding extensions). | Typically, April 15 of the following year | Typically, April 15 of the following year |
| Earnings | Grow tax-deferred until withdrawn | Grows tax-free |
| Taxes Upon Withdrawal | Withdrawals are taxed as income | No (Unless taxed for early withdrawal) |
| Tax Advantages | Yes (Deductible contributions tax-deferred until withdrawal) | Yes (Qualified withdrawals are tax-free after age 59½ and 5 years invested) |
| Tax Deductibility for Contributions | Yes (Tax deferred up to 100% depending on MAGI and participation in an employer-sponsored retirement plan) | No (Taxes are paid up-front) |
| Most Withdrawal Restrictions Before Age 59½ Result in IRS Penalties. | Yes | Yes |
| IRS Penalty for Early Withdrawal. None if: • Over age 59½ • Qualified medical expenses • First-time home purchase (up to $10,000) • Child Birth/Adoption (up to $5,000) • Death or disability • Qualified college expenses • Due to IRS levy See your tax advisor for other distribution options. | Yes | Yes |
| Bank Penalty for Early Withdrawal Penalties Apply | Yes | Yes |
| Required Distributions | Yes (Must begin when participant turns 73) | Yes (After death of the participant) |
| Age at Which Withdrawals Must Begin | Must begin when participant turns 73 | N/A |
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The information provided here is for informational purposes only and is not intended as a substitute for tax, legal, or professional advice. This information was not prepared by any tax, legal, or accounting professional, and nothing in this material should be relied upon in isolation for the purpose of making an investment decision. Additional conditions apply to IRAs and IRA CDs, and you should consult your own tax, legal and accounting advisors before engaging in any financial transactions. First Bank of the Lake and its employees do not provide tax, legal, or accounting advice; and as such this information should not be construed as such. Additional terms and conditions apply to all IRA CD products offered by the bank.
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