IRA Archives - SouthStar Bank, S.S.B.

by SouthStar BankOctober 11, 2023

Rules Governing IRAs

The previous IRA blog discussed the benefits of IRAs. However, understanding the unique rules governing IRAs is also essential. Knowing these rules is crucial in securing retirement savings and avoiding penalties. Rules Governing IRAs: For further explanation and detail, please visit the IRS website. Navigating the rules of IRA accounts is vital for successful retirement planning. By adhering to contribution limits, understanding eligibility criteria, and being aware of withdrawal and distribution rules, you can harness the full potential of your IRA to achieve your financial goals. Remember that IRS regulations may evolve, so staying informed and seeking guidance from financial professionals is essential. For more information or to inquire about IRA accounts, please contact SouthStar Bank’s IRA team at ira@southstarbank.com or 512.384.3948 Please note that all dates and rules are based on the year this article was published. Please check back with the IRS for important dates and regulations.

IRA Accounts

by SouthStar BankSeptember 20, 2023

Understanding the Benefits of IRAs

Understanding the benefits of Individual Retirement Accounts (IRAs) is essential for maximizing their potential and ensuring a secure financial future. Benefits of IRAs: Tax Advantages: IRAs offer significant tax benefits that vary depending on the type of IRA chosen. For example, contributions made through a Traditional IRA are typically tax-deductible, while Roth IRA contributions are made with after-tax dollars, which makes qualified withdrawals through that account entirely tax-free. These tax advantages can help you optimize your retirement savings and minimize tax liabilities. Interest: Many people will often forgo IRA accounts in favor of traditional Savings accounts with lower interest rates. IRA accounts often offer more interest than a Savings account, so be sure to do your due diligence and maximize the interest earned on your retirement savings. Investment Flexibility: Self-Directed IRAs allow for a wide range of investment options, such as stocks, bonds, mutual funds, ETFs, and more. This flexibility empowers you to tailor your investment strategy to match your risk tolerance and financial objectives. Diversifying your IRA investments can help spread risk and increase potential returns. Rollover and Portability: Changing jobs or retiring doesn’t mean leaving your retirement savings behind. You can roll over funds from employer-sponsored retirement plans, such as 401(k)s or 403(b)s, into an IRA without tax penalties. This manageability gives you greater control over your retirement savings and investment choices. Supplementing Employer Plans: IRAs serve as valuable complements to employer-sponsored retirement plans. If your employer’s plan has limited investment options, opening an IRA allows you to access a broader range of investments and tailor your portfolio to suit your preferences. Estate Planning Benefits: IRAs offer potential estate planning advantages. Beneficiary designations allow you to pass on your IRA assets to your beneficiaries, potentially continuing the tax-deferred growth or tax-free growth in the case of Roth IRAs and enabling a more efficient transfer of wealth. Understanding the benefits of IRAs is essential for successful retirement planning. These tax-advantaged accounts offer tax benefits, investment flexibility, and continued growth and security opportunities. By taking advantage of these unique benefits, you can harness the full potential of IRAs and build a robust retirement portfolio. SouthStar Bank is excited to offer a variety of IRA accounts with competitive interest rates. Look at SouthStar Bank’s rates and start maximizing your retirement savings today! For more information or to inquire about IRA accounts, please contact SouthStar Bank’s IRA team at ira@southstarbank.com or call 512.384.3948 Please note that all dates and rules are based on the year this article was published. Please check back with the IRS for important dates and regulations.

IRA Accounts

by SouthStar BankAugust 2, 2023

What IRA is Best for Me?

When it comes to saving for retirement, Individual Retirement Accounts (IRAs) offer a range of options to suit various needs and preferences. However, the choices can be overwhelming for the everyday consumer. Whether you have been saving for years or are just beginning to plan your future, SouthStar Bank can help you get started. Roth IRA: A Roth IRA is a retirement account funded with after-tax contributions. One of the main advantages is the potential for tax-free growth and withdrawals during retirement. With a Roth IRA, contributions are made with money that has already been taxed, which means you won’t get an immediate tax deduction. However, the earnings within the account grow tax-free, and qualified withdrawals, made after age 59 ½ and held for at least five years, are also tax-free. Additionally, Roth IRAs do not have required minimum distributions (RMDs) during the account owner’s lifetime, giving the account owner more flexibility in retirement planning. Traditional IRA: A Traditional IRA is a tax-advantaged retirement account where contributions may be tax-deductible in the year they are made. The money you contribute to a Traditional IRA is not taxed until you withdraw it during retirement. While the contributions and earnings grow tax-deferred over time, withdrawals made after age 59 ½ are treated as ordinary income and taxed accordingly. Another key aspect of Traditional IRAs is that they come with required minimum distributions (RMDs) that must begin at age 72 (73 if you reach age 72 after Dec. 31, 2022), ensuring gradual distributions during retirement. Self-Directed IRA: A Self-Directed IRA is a unique retirement account that allows investors to go beyond traditional assets like stocks and bonds. With a Self-Directed IRA, you have the flexibility to invest in alternative assets, such as real estate, precious metals, private equity, and more. This option empowers investors to diversify their portfolio beyond conventional investments, potentially enhancing returns and reducing risk. However, it requires diligent research and understanding of the chosen alternative investments, as they may not be as liquid or easily valued as traditional assets. Checkbook IRA (Self-Directed IRA with Checkbook Control): A Checkbook IRA, also known as a Self-Directed IRA with Checkbook Control, is a specific type of Self-Directed IRA that provides even greater control and convenience in managing investments. With a Checkbook IRA, you establish an LLC (Limited Liability Company) owned by the IRA, and the IRA custodian allows you to serve as the manager of the LLC. As the manager, you gain the authority to make investment decisions and write checks from the IRA’s funds directly, eliminating the need for custodian involvement for each investment transaction. This streamlines the investment process and can be especially beneficial for those who prefer a hands-on approach to managing their retirement funds. SouthStar Bank is excited to offer a variety of IRA products, including IRA loans, to the Texas communities we have served for over 100 years. Our knowledgeable team can guide you through the process of selecting the right IRA for your retirement goals and provide […]