Whether you are just beginning to save for retirement, or whether you already have a retirement plan in place, a Chevy Chase Individual Retirement Account (IRA) is a smart and easy way to save for your future.
An IRA is a smart way to save, joining two powerful forces: compounded interest and
tax savings. Plus, continue to take advantage of higher contribution limits that allow you to put more money aside for retirement each year.* Whatever your retirement goals may be, we can help.
Your IRA savings dollars can work even harder for you at Chevy Chase Bank.
- Include your IRA in a Platinum or Silver Banking Package to earn extra rewards and great values including higher rates and a consolidated monthly statement that simplifies money management.
- Link your IRA to your Chevy Chase Check or ATM Card and enjoy 24/7 access for account information via Chevy Chase Online Banking, Telephone Banking, and Chevy Chase Bank ATMs.
- Enjoy unmatched peace of mind with the safety of FDIC insurance — now up to $250,000.1
So, plan for your future today! Call 301-987-BANK or 1-800-987-BANK (out of area), or visit the
Chevy Chase Bank branch nearest you.
* As provided under the Economic Growth and Tax Relief Act.
Frequently Asked Questions
"What's the difference between a Traditional IRA and a Roth IRA, and what are the tax benefits of each?"
"When may a Traditional IRA be a better choice than a Roth IRA?"
"What's the difference between a Traditional IRA and a Roth IRA, and what are the tax benefits of each?"
Both types of IRAs are a smart choice for retirement savings. They allow you to enjoy tax advantages while saving for your future.
With a Traditional IRA, investment earnings are tax-deferred, so you pay taxes only when you withdraw funds. Plus, contributions made to your Traditional IRA may be tax deductible. (Consult your tax advisor for details.)
With Roth IRAs, all withdrawals are federal income tax and penalty-free, including earnings - assuming you are over 59 1/2 years old and your account has been open for at least five tax years when you make your withdrawals. Unlike Traditional IRAs, contributions to Roth IRAs are never deductible. (Consult your tax advisor for details.)
For more information, view the comparison chart below.
| What's the Difference Between a Traditional IRA and a Roth IRA? |
| Frequently Asked Questions |
Traditional IRA |
Roth IRA |
| Who is eligible to contribute? |
- Anyone under age 70½ who has earned income
|
- Single individuals who earn less than $116,000 and married individuals who earn less than $169,000 combined for 2008
|
| How much can I contribute? 1 |
- 2008 Tax Year:
Maximum Contribution: $5,000 if you are under age 50
Maximum Contribution: $6,000 if you are age 50 - 70½
|
- If you are single, you can make the maximum contribution (same as Traditional IRA) if your AGI is $101,000 or less, or a partial contribution if your income is between $101,000 and $116,000
- If you are married and file a joint income tax return, you can make the maximum contribution (same as Traditional IRA) if your combined income is less than $159,000, or a partial contribution if your income is between $159,000 and $169,000
- Indexed to inflation for 2009 and limit removal is set to occur in 2010
|
| What is the deadline for my contributions? |
- 2008 Tax Year:
Wednesday, April 15th, 2009
|
|
| When can I begin withdrawing funds without incurring a penalty? |
- Age 59½, but you must start withdrawing by April 1st following the year in which you reach 70½.
- Beneficiaries can withdraw upon the death of the primary owner.
- For first-time home purchases, qualified higher education expenses, or disability. (These distributions are still subject to income tax.)
|
- Age 59½, after 5-year holding period has been met, but unlike Traditional IRAs, you do not have to begin distributions at age 70½.
- For first-time home purchases, disability, or qualified higher education expenses if 5-year holding period has been met. (These distributions are not subject to income tax.)
- Contributions (not earnings) to a Roth IRA may be withdrawn at any time without the payment of income tax
|
| What are my tax benefits? 2 |
- Investment earnings grow tax-free until they are withdrawn.
- Earn interest while gaining tax advantage during peak earning years.
- Pay taxes only on amounts withdrawn and without penalty after age 59½ when you are potentially in a lower tax bracket.
- Save money by lowering your taxable income through tax deductibility of contributions (depends on income, filing status, and participation in an employer plan).
|
- If you have met the 5-year holding period, you will not pay taxes on earnings as long as you begin taking withdrawals after age 59½, or for specific purposes such as first-time home purchase, disability, or qualified higher education expenses.
|
Individual Retirement Account Contribution Limits (Traditional and Roth)
Tax Year |
Contribution Limit
Age < 50 |
Contribution Limit Age
50 to 70½ ** |
2008 and beyond |
$5,000 |
$6,000 |
May adjust annually for inflation, but only in $500 increments.
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"When may a Traditional IRA be a better choice than a Roth IRA?"
In general, you may benefit more with a Traditional IRA if:
- You are eligible to deduct your entire contribution.
- You anticipate your tax rate at the time of withdrawals to be lower than your current tax rate.
- Your income level disqualifies you from a Roth IRA.
Otherwise, you may want to consider a Roth IRA. Consult your tax advisor for details.
1 Learn more about the increase in FDIC insurance on certain retirement savings accounts. Or, use the FDIC's "Electronic Deposit Insurance Estimator" to quickly and easily check FDIC insurance coverage for your accounts.
2 There is no contribution age limit on a Roth IRA. This is not meant to serve as a tax guide. If you have specific questions or need tax advice, you should consult a tax advisor.
Chevy Chase Bank does not provide tax advice to any of its clients. You may want to seek
professional tax advice prior to choosing a retirement product.
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Savings Accounts