IRA Accounts

Traditional, Roth & Educational Accounts

Individual Retirement Accounts are available for individuals to set aside funds for retirement and to take advantage of tax deferred or tax free interest income when the funds are withdrawn. The tax and investment choices on retirement savings are difficult to master, but your secure retirement is well worth the effort. Citizens Bank of Mukwonago can get you headed in the right direction.

Account Type Opening Balance Rate Type Additional Deposits Allowed Anytime Early Widthdrawal Penalty
18 Months $100 Variable $50 minimum 6 month
1 Year $500 Fixed $100 minimum 3 month
2 Years $500 Fixed $100 minimum 6 month
3 Years $500 Fixed $100 minimum 6 month
1 Month $250 Fixed $50 minimum No Penalty

All IRAs will renew automatically.

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Check out our Future Value/Annuity or How Much Will I Need to Retire calculators. These calculators can help you start down the path to a financially secure retirement.

Please consult our Certified Financial Planner or your tax advisor to see if an IRA is right for you. There are many types of IRA’s. Some of the most common types of IRAs are listed below.

Traditional Individual Retirement Account

Contribution Eligibility: Anyone who is younger than age 70 ½ for the entire year and has earned income from employment or is the spouse of someone who has earned income from employment. Also keep in mind, you have until April 15th each year to make a contribution for the previous tax year.

In addition, you will receive a full tax deduction for your contribution if you and your spouse are not covered by an employer sponsored retirement plan. If you or your spouse are participants in an employer sponsored retirement plan, your income and filing status will determine the amount of your deductible contribution.

  • Earnings grow tax deferred
  • Full deductions allowed at higher income levels
  • Special rules for married filling jointly
  • At age 50 and over a catch up contribution is permitted

Distributions: Distributions must begin at age 70 ½. Failure to take a Required Minimum Distribution will result in a 50% excise tax assessment on the undistributed amount. New, penalty-free withdrawals are permitted under certain circumstances.

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Roth Individual Retirement Account

Contribution Eligibility: The Roth IRA gives you the ability to invest your after-tax dollars today and let the investment grow tax-deferred. Unlike the Traditional IRA, there is no 70 ½ age limit on making contributions. You simply need to have earned income equal to the amount you contribute. The amount you may contribute is based on your modified adjusted gross income. Check with our IRA specialists or your tax advisor to determine your contribution limit.

However, here are a few basic rules that govern Roth IRA's:

  • Special rules for married filling jointly
  • At age 50 and over a catch up contribution is permitted

Distributions: Unlike the Traditional IRA, there are no required minimum distributions at age 70 ½. Your dollars can continue to grow until you need them. There are special distribution requirements when these plans pass to your beneficiaries.

If you satisfy two conditions, you may make tax-free and penalty-free withdrawals from your Roth IRA. First, a Roth IRA must have been opened for a minimum of five years. Second, the withdrawal must be made after the occurrence of one of the following events:

  • You attain age 59 1/2
  • Death
  • Disability
  • First-time home purchase

Distributions which meet the above requirements are referred to as “qualified distributions.” While you may take distributions from your Roth IRA at any time, distributions which are not qualified distributions will be subject to taxes, and in some cases, early distribution penalties.

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Coverdell Educational Savings Account (ESA)

Contribution Eligibility: The Coverdell Education Savings Account (Formerly Educational IRA) is a great way to save for a child's education. Although the contributions are not tax-deductible, the earnings grow tax-free provided that the funds are used to pay for qualified education expenses of the designated child. The contributions are limited to $2,000 per year, per child under the age of 18.

  • Contributions can come from many sources
  • Contribution limits will be based on your Modified Adjusted Gross Income
  • In the event of remaining funds, an eligible member of the child’s family may be named as the new beneficiary

Distributions: Contributions and earnings are tax free when withdrawn to pay for qualified education expenses. A qualified education expense is one that is required for the enrollment or attendance by your child at an eligible educational institution, including elementary, secondary or post-secondary institutions. These expenses include:

  • Tuition
  • Fees
  • Books
  • Supplies
  • Equipment

Contact us for more information.