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Individual Retirement Accounts (IRAs)

Understanding Your Options

We at Thomaston Savings Bank are proud that we have an experienced staff to help you make those tough decisions involved in saving for your retirement. You’ve made the commitment to save for your future. An IRA may be the perfect savings vehicle for you. And never before have had individuals had so many IRA savings choices. Now, you may be eligible to choose from both Roth and Traditional IRAs.

· Traditional IRAs. Under this arrangement, contributions may be partially or fully deductible, but distributions are generally taxable.

· Roth IRAs. With Roth IRAs, contributions are not deductible, but distributions can generally be withdrawn tax-free.

Both types of IRAs are attractive, and choosing can certainly be difficult. So, a good place to start is often by determining what options are available to you.

Traditional and Roth IRAs

Before you determine your eligibility to contribute to a deductible Traditional IRA or Roth IRA, you may find it helpful to review the following summaries about how Traditional and Roth IRAs work.

Traditional IRAs

· Contributions may by Tax-deductible.

· Earnings grow Tax-deferred.

· Distributions are generally taxable, but penalty-free if withdrawn under one of the following circumstances:

- attaining age 59 ½

- incurring a disability

- rollover

- payment for certain health insurance, medical expenses, and higher education expenses.

- payments for first- time home purchase

- taking equal, periodic payments

- death (payments to beneficiaries)

- conversions to Roth IRAs

- IRS Tax Levy

- qualified Reservist distributions

· Distributions are required to be taken by Traditional IRA holders beginning at age 70 1/2.

Roth IRAs

· Contributions are not deductible

· Earnings can grow tax-free.

· Contributions can generally be distributed tax-free at any time.

· Earnings can be distributed tax-free if the Roth IRA holder first made a Roth IRA contribution at least five years ago AND one of the following events occurs:

- attaining age 59 ½

- incurring a disability

- purchasing a first home

- death (payments to beneficiaries).

· Distributions are not required to be taken by Roth IRA holders at age 70 1/2.

Contribution Limits

· A maximum of $5,000, effective 2008

· Plus catch-up contributions of $1,000 if you are age 50 or older

Call us today! Our Customer Service Representatives will be happy to discuss the benefits of IRA savings.