Share buttons

 

 

Investment and Retirement Advice You Can Count On.

We make it easy to do everyday banking at Horizon, but everybody still needs some sensible advice from time to time to help with their goals and strategies for saving, investing wisely and making the most out of your financial journey. That’s why we provide fresh advice topics to help you along the way.

Looking for specific advice? Use our search feature to explore our various topics.

IRAs: A Flexible Way to Save

Girl on computer

If you've been hesitant to open an IRA because you were afraid of tying up your money, you can be assured that exceptions exist that will allow you to access your money if needed for specific life milestones or emergencies. This makes an IRA a great way to save for retirement while also being prepared for the unexpected.

Take a look at these ways you can use an IRA that does not trigger the age-related penalty fees associated with early withdrawal (though you may owe income tax on the distributions).

College costs. You can use an IRA to pay for higher education expenses for yourself, your spouse, children, or grandchildren without penalty. Note that money used from your IRA for these purposes will count as income in determining eligibility for need-based financial aid.

First-time home purchase. First-time homebuyers can use up to $10,000 of IRA assets to buy, build or rebuild a primary home without penalty. For this purpose, first-time homebuyers are defined as any individual who has not owned a home in the past two years. Plus, if you and your spouse both qualify, you can use distributions from your IRA totaling up to $20,000 in distributions together.

Birth or adoption of a child. Thanks to the SECURE Act, parents may take early withdrawals of up to $5,000 (each) from their retirement accounts without penalty within a year of a child's birth or adoption. The adoption cannot be the children of a spouse from a prior partner.

Unreimbursed medical expenses. Your IRA can be used to pay unreimbursed medical costs that exceed 7.5 percent of your adjusted gross income without having to pay the 10 percent early withdrawal penalty.

Health insurance for the unemployed. Individuals may also be eligible to withdraw from their IRA penalty-free if they are unemployed. Withdrawals can be used to cover health insurance costs, including premiums paid for COBRA continuation coverage.

Income during a disability. Individuals who become disabled and unable to work may be able to tap into their IRA. Proof of disability as determined by a physician is required, and your disability must be expected to last an indefinite period of time and prevent substantial gainful activity.

With any IRA withdrawal, it's important to weigh the costs as well as the benefits. The IRA is designed to provide long-term growth that may be compromised when early withdrawals are used. Still, there are times when withdrawing from an IRA may be the right move.

Ready to open an IRA? Here’s a handy comparison chart for options based for your current needs and future retirement savings goals. Give us a call at 888-873-2640 if you have any questions.


* Certain exceptions apply. Consult your tax advisor for details. Investment products are not federally insured. 

The web site you have selected is an external site not operated by Horizon Bank. This link is provided for convenience and informational purposes only and Horizon does not endorse and is not responsible for the content links, privacy policy or security policy of this website or app you are about to visit.  Horizon Bank is not responsible for (and does not provide) any products, services or content for this third-party site or app, except for products and services that explicitly carry the Horizon Bank name. Click Proceed to continue or Cancel to go back.