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INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)

First United Bank offers a variety of Individual Retirement Accounts (IRA's) to meet your individual needs. Your family's future is dependent upon sensible planning and making your money work harder for you.
Don’t wait until it is too late.  It is easy to forget about your future, but by starting now, you can plan adequately for the future.  Whether your retirement is five (5), ten (10), fifteen (15) years or more away, start planning today by opening an IRA that is right for you.  First United Bank offers the following retirement options:

 
 
First United Bank   TRADITIONAL IRA


Take advantage of tax-deferred earnings and possible yearly tax deductions.  A Traditional IRA may be the perfect investment option for you if you meet the following criteria:
  • You do not have another IRA.
  • You are a taxpayer under the age of 70 1/2 with earned income, or you are a nonworking spouse.
  • Deductible contributions are more important to you than tax-free distributions.
  • You would like to begin taking distributions by age 59 ½ years.
  FEATURES:
  • No income restrictions.
  • Taxes are paid on earnings when withdrawn from the IRA.
  • All withdrawals prior to age 59 ½ years are subject to 10% penalty.
  • Withdrawals begin at age 59 ½ (voluntary).
  • Mandatory withdrawals at age 70 ½.
 
 
1. FIXED RATE IRAs
  FEATURES:
  • Competitive interest rates.
  • $1,000 minimum opening balance.
  • Interest compounded and credited monthly.
  • Automatic renewal.
  • Contributions are generally tax deductible.
  • Earnings grow tax deferred.
  • Ability to lock in a fixed interest rate.
  • Flexible options for interest payments: (1) Added to principal, (2) Monthly interest check, (3) Deposit to checking or savings account.
  • Flexible terms from 30 days to five (5) years.
  • Earn a higher interest rate by choosing a longer term or maintaining a higher balance.
  • FirstNet Online Banking.
  • FirstCall Telephone Banking.
 
 
*Withdrawals from some IRAs before age 59 ½ years may be subject to a 10% Federal IRA penalty.  Additionally, withdrawals from your IRA before the maturity date may also be subject to an early withdrawal penalty.
  
 
2. ROLLOVER IRAs
Take advantage of tax-deferred earnings and possible yearly tax deductions.  A Rollover IRA may be the perfect investment option for you if you meet the following criteria:
 
  • You are an individual who is changing jobs or retiring and would like to keep your retirement plan pay out growing unaffected by taxes. (Must be moved from an Employer-Sponsored Qualified Retirement Plan).
  • You would like to see more of your money compound tax deferred and avoid withholding taxes and penalties on a distribution from a qualified employer-sponsored plan by making a direct rollover contribution from a qualified employer-sponsored plan.
*Withdrawals from the IRA are taxable in the year of receipt, and must begin by April 1 of the year following the year you reach age 70 1/2.
 
 
3. SIMPLIFIED EMPLOYEE PENSION (SEP) IRAs
 
Take advantage of tax-deferred earnings and possible yearly tax deductions.  A Simplified Employee Pension (SEP) IRA may be the perfect investment option for you if you meet the following requirements:
 
  • You are a business owner looking for an effective way to build yours and your employees retirement savings.
  • You are a small business owner, self-employed individual, or salaried individual who operates a business on the side.
  • Want contributions for yourself and your employees that are tax-deductible as a business expense.
  • Want earnings that grow tax free until withdrawals begin. With taxes deferred, your balance may grow faster, potentially giving you more than you would have by investing the same amounts in a taxable investment account.
  • Want an investment option that is easy to set up and maintain with little paperwork or administrative responsibility for your company.
  • Want an investment option where contributions which are made to each employee's SEP IRA are administered by the employee.
 
 
*Withdrawals from a SEP IRA before age 59 ½ may result in IRA tax penalties.  Withdrawals from a SEP IRA before maturity may result in substantial penalties for early withdrawal.
  
 
First United Bank   ROTH IRA
The Roth IRA gives you added flexibility in saving for your future. This type of IRA allows your investment dollars to build and be withdrawn tax-free if certain conditions are met. A ROTH IRA may be the perfect investment option for you if you meet the following criteria:
 
  • You meet the maximum adjusted gross income (AGI) limits.
  • You do not have another IRA.
  • You expect to be in a higher tax bracket in the future.
  • You want to split contributions.
  • You want to make contributions after age 70 1/2.
FEATURES:
  • Contributions aren't tax deductible but principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
  • All earnings and principal are 100% tax free if certain conditions are met
  • No mandatory distribution age.
  • Available for single-filers who meet the maximum adjusted gross income requirements.
You may also want to consider converting an Existing IRA to a Roth IRA for the following reasons*:
  • To draw your IRA funds tax-free during your retirement years.
  • To continue making IRA contributions after age 70 1/2.
  • To avoid taking minimum distributions during your lifetime.
*Must pay the income tax associated with the conversion.
 
 


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   EDUCATIONAL IRA/COVERDELL EDUCATION SAVINGS ACCOUNT (CESA)
An Educational IRA can help you save for your child or grandchild's college education. The Education IRA can provide benefits and relief in funding a student's education.  An Educational IRA may be the perfect investment option for you if you meet the following criteria:
  • You want to help pay for a child's higher education and you want earnings to grow tax-free.  The account must be set up for the benefit of a child.
  • You meet the maximum adjusted gross income (AGI) limitations.
FEATURES:
  • May be established for any child under the age of 18 years.
  • Nondeductible contributions of up to a maximum amount may be made to each child's account annually (Contributions to an Education IRA are not allowed if a contribution is made by anyone to a qualified state tuition program on behalf of the same child in the same year).
  • The contribution limit is phased out for contributors who meet the adjusted gross income (AGI) limitations.
  • Education IRA withdrawals used to pay for higher education expenses, such as college tuition and fees, are generally tax-free and are not subject to a 10% IRS penalty for early withdrawal.
NOTE: If a child receives a scholarship or does not go to college, you may elect a tax-free rollover from one student's Education IRA to that of another family member (Rollovers do no affect the annual contribution limit). Funds in an Education IRA must be distributed, or transferred to another family member's Education IRA, at the time the designated student reaches age 30. If the funds are not used for qualified education expenses, withdrawals are generally taxable and may be subject to a 10% penalty.
 
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