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Individual Retirement

Taxpayers have until April 15th of each year to make contributions to an IRA account for the previous tax year. The Trust Department of First Bank and Trust Company offers IRA account services.

Traditional IRA

Traditional IRA is an account that allows you to defer taxes on the earnings on your contributions until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which they are made.

If you are younger than age 70 ½ for the entire tax year and have earned income (or your spouse must have earned income), you are eligible to establish a Traditional IRA.

Roth IRA

Roth IRA allows only nondeductible contributions and features tax-free withdrawals for certain distribution reason after a five year holding period. Since the 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 retire, you may benefit more from a Roth IRA than from a traditional IRA.

There are two requirements for eligibility to contribute to a Roth IRA: you must have earned income (or your spouse must have earned income), and your modified adjusted gross income cannot exceed certain prescribed limits.

You are eligible to establish a Roth IRA even if you already participate in or are receiving contributions from an employer sponsored retirement plan.

Coverdell Education Savings Account

Coverdell Education Savings Accounts are a nondeductible account that features tax-free withdrawals for a very specific purpose, a child’s education expenses. You are eligible if your modified adjusted gross income does not exceed certain limits.

Please visit our Trust Department for more information on IRAs.