Individual Retirement Accounts
Caldwell Trust Company offers a variety of individual retirement accounts to meet your personal retirement planning needs. We can set up any of these accounts as custodial, self-directed, or managed under a trust. In managing your IRA, you can self-direct all investments or let us do the work. Our goals will be the same as yours — growing your assets to ensure that you can relax and enjoy your retirement. Whether you are just starting your retirement savings or want to roll over one or more accounts from other institutions to Caldwell Trust, we can help. To meet our clients' varied needs, we provide a variety of account types including:
- Traditional IRAs,
- Roth IRAs,
- Roth Conversion IRAs, and
- SEP (Simplified Employee Pension plan) IRAs.
The advantages we can provide you include:
- Flexible diversification within one consolidated account.
- Safekeeping of your account assets.
- Economical execution of trades — usually at only 3 or 4 cents per share.
- Regular, detailed statements of your holdings.
- Notification of required minimum distributions.
- Internet access to your account information from any computer, any time.
- Personal attention to your account needs by your Account Officer.
- Ability to name (or change) your beneficiaries easily.
Following is an overview of the types of accounts we offer. Remember that in addition to the information provided, additional rules and features apply which your Account Officer can discuss with you in detail.
TRADITIONAL IRAS
Contributions, currently up to $5,000 in one year if you are under 50, or $6,000 if you are over, are made in "before-tax" dollars. This means that some or all of the contributed amount may be tax-deductible depending on whether you file taxes as single or married and on the amount of your Adjusted Gross Income (AGI). Assets grow tax-deferred and you don't start paying taxes on this income until you start taking distributions, which you can begin doing at age 59-1/2. If you withdraw before reaching that age, the withdrawals are usually subject to a 10% penalty in addition to the income tax. At the end of the year in which you reach age 70-1/2, you can no longer make contributions and you must start to take systematic distributions.
ROTH IRAS
If you have earned income or receive alimony, you can open a Roth IRA even if you are over the age of 70-1/2. Like a traditional IRA, you can currently contriute up to $4,000 in one year if you are under 50 or $5,000 if you are over. However, your contributions are made in "after-tax" dollars and therefore are not deductible. Income generated by your account assets accumulates tax-free. When you reach age 59-1/2, you can make tax-free withdrawals provided funds have been in your account for five years. Contributions may also be withdrawn tax-free at any time.
ROTH CONVERSION IRAS
If you meet certain age and tax bracket criteria, it could be to your financial advantage to convert your Traditional IRA to a Roth IRA. You will have to pay taxes on the converted amount, but all income earned will be tax-free, which, depending on your individual circumstances could net more for you at retirement than would retaining a Traditional IRA. Evaluating whether this is right for you is complicated and you should consult with your tax professional before proceeding.
SEP IRAS
A Simplified Employee Pension Plan, a SEP IRA, enables a self-employed person or small business owner to start a employee retirement plan. You can start a SEP if you are a sole proprietor, in a partnership, or the owner of an incorporated or unincorporated business. SEPs are easier and less expensive to start and administer than traditional pension plans. Once established, the employer makes tax-deductible contributions to the SEP set up by each employee. As with other types of IRAs, taxes on contributions are tax-deferred until they are they are withdrawn.
