Individual Retirement Accounts

​Individual Retirement Accounts (IRAs)

​IRAs can provide you with tax advantages not found with typical savings accounts. PCSB Bank offers both Traditional IRAs and Roth IRAs to help our Lower Hudson Valley, NY customers plan for retirement.
 

​Traditional Individual Retirement Account (IRA)

A traditional IRA is an individual retirement account that offers tax advantages to savers. Here are the key details on the traditional IRA:

  • The IRA contribution limit for 2019 is $6,000, or $7,000 if you’re 50 or older. You can use an IRA to save even if you already participate in a workplace 401(k).

  • If you are eligible, your traditional IRA contributions are tax deductible in the year they are made. 

  • Your investments grow tax-deferred in a traditional IRA, meaning you won’t be taxed on gains until you withdraw them.

  • Retirement distributions are taxed as ordinary income.

  • Unless they meet certain conditions, early withdrawals may be taxed as income and assessed a 10% penalty.


Roth Individual Retirement Account (IRA)

Unlike a traditional IRA, your contributions to a Roth IRA are not tax-deductible. But those contributions and your investment earnings grow tax-free, meaning there’s no tax on your Roth IRA withdrawals in retirement. With a traditional IRA, your withdrawals in retirement are taxed as income.

  • In 2019, you can make contributions to a Roth IRA of up to $6,000 per year — or $7,000 if you are 50 or older — and you can use it in addition to a 401(k). 

  • Roth IRA accounts are not subject to minimum distributions typically required from a traditional IRA or 401(k) beginning the year you reach age 73. This means you can use a Roth IRA to pass money to your heirs.

  • Because you’ve already paid taxes on your Roth contributions, you can withdraw them without tax or penalty at any time. You may, however, be taxed or penalized if you withdraw your investment earnings.

  • Once you hit 59½ and have held the account for at least five years, you can take distributions, including earnings, from a Roth IRA without paying federal taxes.

  • You can use Roth IRA money to pay for qualified college expenses without an early distribution penalty.

    Contact us or visit a New York branch conveniently located throughout Westchester, Putnam, Dutchess and Rockland Counties, to get started.
     

5.00% APY Rate Special
7 Month CD 

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Roth vs. Traditional IRA Calculator

Disclaimer
​Please consult with your tax adviser for information on which IRA product will be best for your specific financial needs.
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