Traditional IRA
For security and peace of mind.

A Traditional IRA provides significant tax incentives for placing a portion of one's income into long-term savings, not to be withdrawn until retirement. These incentives are:

• A possible tax deduction for contributions made to a Traditional IRA.*
• A tax deferral of earnings (e.g. interest, dividends and capital gains) on those contributions.
• The security of knowing that one has income, other than social security, for retirement.

When you make a contribution to a Traditional IRA, you may be able to take a tax deduction on your tax return.* The tax obligation is essentially placed on “hold.” When a withdrawal is made at retirement, the money is taxed at that time. However, you will likely be at a lower income level, and therefore would pay tax on withdrawals at a lower rate than when you were working.

Money that has been deposited into an IRA still belongs to the IRA owner. There are rules regarding the taxation of distributions (withdrawals) from IRAs. Tax penalties typically apply if distributions are taken before age 59 ½. Also, at age 70 ½ the IRA owner must start taking distributions from his/her IRA.

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*American Chartered Bank is not a tax advisor. Please speak with your tax consultant regarding deductions for a Traditional IRA.