Individual Retirement Accounts (IRAs)

Traditional IRAs

This type of IRA account offers two big advantages or incentives to encourage people to save for retirement. First, Traditional IRA contributions may be tax deductible on the account holder’s tax return. Secondly, earnings on a Traditional IRA are not taxed until the IRA holder or beneficiary takes the money out. It is these accrued earnings, regular deposits, and the passage of time that combine to produce large account balances.

Roth IRAs

Unlike Traditional IRAs, Roth IRA contributions are not tax-deductible. However, if certain requirements are met, qualified distributions—including earnings—are tax-free. Another key advantage of Roth IRAs is that they are not subject to the Required Minimum Distribution (RMD) rules that apply to Traditional IRAs. Additionally, you can continue making contributions to a Roth IRA at any age, as long as you have earned income.

Rollover IRA

A Rollover IRA allows you to move funds from an employer-sponsored retirement plan, such as a 401(k), into an IRA without triggering taxes or penalties, as long as the transfer is handled properly. First Western Bank & Trust can assist with the rollover process by managing the transfer, ensuring compliance with IRS rules, and providing personalized investment management.