Trust Tuesday: What to Know Before Transferring an IRA
Saving for retirement is one of the smartest financial decisions you can make. An Individual Retirement Account (IRA) helps many people build long-term financial security while offering valuable tax advantages.
If you are considering transferring or moving an IRA, it is important to handle the process correctly. A mistake during an IRA transfer could lead to unnecessary taxes, penalties, or delays in investing your funds.
At First Western, our team works with you to understand your options, avoid costly mistakes, and make sure your IRA continues working toward your long-term goals.
What Is an IRA?
An IRA is a personal retirement savings account designed to help individuals save for retirement while receiving tax advantages. It is one of the most common tools people use to prepare for their financial future.
There are two primary types of IRAs:
• Traditional IRA
A Traditional IRA may allow you to deduct contributions today, reducing your taxable income for the year. Your money then grows tax-deferred, and you generally only pay taxes when you withdraw funds.
• Roth IRA
A Roth IRA is funded with after-tax dollars. While contributions are not tax-deductible, your earnings grow tax-free, and qualified withdrawals in retirement are generally tax-free as well. This can be especially beneficial if you expect to be in a higher tax bracket later in life.
Both types of IRAs offer meaningful benefits. Choosing the right one depends on your current financial situation and long-term goals.
IRA Options at First Western
First Western offers a range of IRA solutions designed to fit your needs.
Many choose IRA Certificates of Deposit (CDs) for stability and guaranteed returns with competitive fixed rates. Others select professionally managed investment portfolios through our Trust Department*, where our team develops an investment strategy aligned with your goals and timeline.
If you already have an IRA at another institution, we can help facilitate a secure IRA transfer, so your retirement savings remain protected and continue working toward your future.
Transfer an IRA Correctly
Transferring an IRA may seem straightforward, but the rules can easily become confusing. If the transfer is not completed properly, it could be considered a distribution, which can trigger taxes and early withdrawal penalties. Even a short period of time out of the market can impact your long-term earnings. Working with a First Western banker or trust professional who understands the process helps you avoid these unnecessary risks.
A Simple Plan to Get Started
- Connect - We start with a conversation to understand your goals, your current IRA, and your retirement plans.
- Transfer - Our Trust Department helps guide the paperwork and ensures your IRA is transferred correctly to avoid unintended tax consequences.
- Ongoing Support - Once your IRA is here, our team continues to keep you informed so you understand how your retirement savings support your long-term plans.
Whether you are looking to open a new IRA, transfer an IRA, or review your retirement options, First Western is here to help.
Contact our Trust Department at 701-857-7150 to get started or visit your local First Western Bank location today!
*Products offered through the First Western Trust Department are: not FDIC insured; no bank guarantee; may lose value.