Individual Retirement Accounts (IRAs) are designed to help you plan for your retirement. They are technically a type of savings plan, but designed to offer significant tax benefits that save you the most money for when you're ready to retire.

Withdrawals can potentially incur a 10% penalty with exception of the following: upon reaching age 59 1/2, death or permanent disability, beneficiary of deceased IRA owner, qualified military reservist distribution, certain medical expenses, first home purchase (maximum of $10,000), qualified higher-education expenses, 72 periodic payments.

Note:  For Roth IRAs earning withdrawals cannot be taken without penalty until at least 5 years from the year of the first contribution or conversion.

Yes. Beginning at age 72 (or 73 if you turned  72 after December 31, 2022) withdrawals will be required for Traditional IRAs. There is no requirement for Roth IRA withdrawals. Inherited IRAs of all types have withdrawal requirements.

Yes. Any withdrawals (not including nondeductible contributions) will have regular income taxes and possible penalties if qualifying conditions are not met. There are no taxes or penalties on qualified direct rollovers.

Almost anyone with a qualified employer plan distribution can invest funds into a Rollover IRA. (Exceptions include: mandatory distributions, required minimum distributions, distributions on amounts that exceed limits, non-spousal death benefit distributions, hardship withdrawals and outstanding loan balances.)

Contributions when rolled over remain tax-deferred as well as any additional earnings to the account.

There are no limits on the rollover amount. 

Future contributions follow the same limitations as a Traditional or Roth IRA. For the tax year 2024, you can contribute $7,000. For age 50 and older, a contribution of $7,500 may be contributed for 2024. For the Roth IRA, there is a phase-out of contribution amounts as AGI approaches these certain limits. However, currently, there is no AGI limit on conversion to a Roth IRA.

NOTE: There are time limits and how frequently you can move your funds.  See the question “Is there a deadline for Account Opening and contributions on a Rollover IRA?”

Rollovers can be opened anytime as long as it is within 60 days of the distribution of assets from your employer-sponsored plan only once per year.

Horizon Bank offers both FDIC insured options such as Certificates of Deposit and non-FDIC options, including stocks and mutual funds, through Horizon Trust & Investment Management.

Horizon Bank has a variety of options to work around or supplement employer-sponsored plans. We often find that you can save additional money in conjunction with these plans, and together we can figure out exactly how much more you can save.