If you are like many people, you are concerned that at retirement time will you have enough money to live comfortably. At MCS Bank we want to help you do all the things you’ve dreamed of doing when that time comes. That’s why we offer Individual Retirement Accounts (IRAs).

Which is the right IRA for you? We offer both the Traditional IRA and the Roth IRA. Each plan has its own unique tax benefits and savings opportunities. All retirement products offer tax free accumulation of earnings which provide additional funds for future needs, but not all contributions are tax-deductible so it is important to consider your own personal goals and financial situation.

If it is your tax strategy to defer paying taxes on part of your income, you should consider a Traditional IRA.

The greatest benefit of a Traditional IRA investment is the tax deferred, compounded interest-earning feature which allows you to defer paying taxes on your earnings until you retire. Even then, you will be taxed on only the amount you withdraw each year. The remainder will continue to earn tax-deferred interest.

To open a Traditional IRA, it doesn’t matter how much you earn or if you are also enrolled in another retirement plan, provided that you are under the age of 70 ½ and are receiving earned income. However, contributions may not be tax deductible for those covered by employer retirement plans, depending on your level of income.

Penalty Free withdrawals (distributions) are permitted any time after age 59 ½ but must start by April 1st following the year in which you reach the age of 70 ½. After age 59 ½, you may make withdrawals even if you continue to earn income. It is not necessary to be retired in order to make withdrawals. In most cases, contributions cannot be withdrawn without IRS penalties until after age 59 ½ with the exceptions of a first time home purchase, qualified education expenses, qualified medical expenses, death or disability. Additional bank penalties may be incurred on early withdrawals from Certificate of Deposit accounts.

Contributions to a Roth IRA

Contributions to a Roth IRA are made with after-tax dollars (not tax deductible) but earnings are tax and IRS penalty free provided certain conditions are met. Anyone who has earned income that does not exceed the income limits, is eligible to contribute to a Roth, even after age 70 ½. Both working and non-working spouses are eligible to open and contribute to their own Roth IRA.

When you make a qualified withdrawal from your Roth IRA, you will not have to pay taxes on the interest earned. Penalty-free and tax-free withdrawals of your contributions are permitted at any time. Tax-free withdrawals of earnings are permitted after age 59 ½, in the event of death or total disability or as a qualified first-time homebuyer, provided the funds were on deposit for a period of 5 successive tax years. Additional bank penalties may be incurred on early withdrawals from Certificate of Deposit accounts.

Call us today to get more details about the IRA plans.

While it is important to contribute $4,000 each year to maximize your earnings, there may be years when it's just not possible. You are not required to contribute every year and there is no minimum amount required for contributions. (Note: If you are age 50 and older there is a catch up contribution of an additional $1000 for 2006 and thereafter.) Additionally, your IRA at MCS Bank can be made up of one or many different products such as Certificates of Deposits ranging in terms from one to five years and our passbook savings account, all within your IRA plan. You can also enjoy the safety of FDIC insurance on IRA deposits up to $250,000 exclusive of other deposits you may have with the bank. It’s easy to transfer an IRA account to MCS Bank where you are charged no administration or transaction fees for our services.