Piedmont Federal Savings Bank – Banking Services – Accounts – Retirement

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Traditional IRAs, Roth IRAs, and Simplified Employee Pension (SEP) Plans

	TRADITIONAL IRA	ROTH IRA	SEP IRA
Best if you want	Your money to grow tax-deferred until you retire	Both tax-free growth and tax-free withdrawals	A plan if you’re self-employed or a small business
Contribution eligibility	Until the year in which you turn 70½, with taxable compensation	Any age with taxable compensation	Only the employer can make contributions
Maximum contribution limits	Contributions Limits for 2017: $5,500 if under age 50 $6,500 if age 50 or older	Contributions Limits for 2017: $5,500 if under age 50 $6,500 if age 50 or older	Contributions Limits for 2017: Employer contributions that are lesser of 25% of employee’s compensation or $54,000
Tax advantages	Pay no taxes until you take distributions	Tax-free when you take distributions	Pay no taxes until you take distributions
Tax deductions	Depends on: Your earnings Whether you (or your spouse, if married) participate in an employer’s retirement plan Your tax filing status	Contributions are not deductible	The lesser of your contributions or 25% of employee’s compensation (limited to $270,000) not to exceed $54,000 If you’re self-employed, your business can generally deduct the contributions you make to your own SEP IRA
Distributions	Reportable and may be subject to income tax Distributions are IRS penalty-free after age 59½	Tax-free after 5 year IRS holding period and you are 59½ Distribution of a contribution is IRS tax and penalty-free	Reportable and may be subject to income tax Distributions are IRS penalty free after age 59½
Required minimum distribution	Mandatory at age 70½	None	Mandatory at age 70½
Products	View IRA products chart
Additional benefits	Learn more about Traditional IRAs (PDF)	Learn more about Roth IRAs (PDF)	Learn more about SEP IRAs (PDF)
Other information	Which IRA is right for you? (PDF) Moving Assets Between Retirement Plans (PDF)
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RETIREMENT

TRADITIONAL IRA

Best if you want your money to grow tax-deferred until you retire
Any age with taxable compensation is eligible to contribute
Maximum contribution limits
Contributions Limits for 2017:
- $5,500 if under age 50
- $6,500 if age 50 or older
Pay no taxes until you take distributions
Tax deductions
Depends on:
- Your earnings
- Whether you (or your spouse, if married) participate in an employer’s retirement plan
- Your tax filing status
Distributions
- Reportable and may be subject to income tax
- Distribution are IRS penalty-free after age 59½
Required minimum distribution mandatory at age 70½

ROTH IRA

Best if you want both tax-free growth and tax-free withdrawals
Any age with taxable compensation is eligible to contribute
Maximum contribution limits
Contributions Limits for 2017:
- $5,500 if under age 50
- $6,500 if age 50 or older
Tax-free when you take distributions
Contributions are not tax deductible
Distributions
- Tax-free after 5 year IRS holding period and you are 59½
- Distribution of a contribution is IRS tax and penalty-free
No required minimum distribution

SEP IRA

Best if you want a plan if you’re self-employed or a small business
Only the employer can make contributions
Maximum contribution limits
Contributions Limits for 2017:
- Employer contributions that are lesser of 25% of employee’s compensation or $54,000
Pay no taxes until you take distributions
Tax deductions
- The lesser of your contributions or 25% or employee’s compensation (limited to $270,000) not to exceed $54,000
- If you’re self-employed, your business can generally deduct the contributions you make to your own SEP IRA
Distributions
- Reportable and may be subject to income tax
- Distribution are IRS penalty-free after age 59½
- Required minimum distribution mandatory at age 70½