Retirement

Annuities

An annuity is a great tool that can be used as part of a retirement strategy.  Simply put, annuities are insurance products allowing you to put aside money, have it increase each year without paying taxes, and then trigger a stream of payments on a timeline you can control.  The payments are taxed as ordinary income.  Unlike IRAs, there is no income limitation in how much money you can contribute.  Other benefits of an annuity from Connection Bank include:
  • Higher rates than traditional CDs and IRAs
  • No taxation on annual interest
  • No service charges or fees
  • Accessible beginning at age 59.5
ANNUITIES ARE NOT FDIC INSURED - NOT A DEPOSIT - NOT GUARANTEED BY THE BANK - NOT INSURED BY ANY GOVERNMENT AGENCY - MAY LOSE VALUE

Traditional IRA

It pays to plan ahead so you can have the retirement you desire. An IRA is a great way to prepare for your future. If you are under the age of 70 1/2 with an income, you are eligible to open a traditional IRA.

  • Contributions are tax deductible*
  • Interest earnings are tax deferred
  • Can begin withdrawing at age 59 ½
  • Early withdrawals are subject to penalty**
  • Mandatory withdrawals begin at age 70 ½
  • Interest Bearing
  • No maintenance fees
  • FDIC insured

*Consult with your tax advisor.
**Certain exceptions apply, such as healthcare, purchasing your first home, and others.


Roth IRA

If used properly, a Roth IRA is an amazing investment which can result in a tax-free retirement. To fully contribute, earnings must not exceed $111,000 annually for a single ($173,000 for married couples).

  • Contributions are not tax deductible
  • Earnings are 100% tax free upon withdrawal
  • Direct contributions may by withdrawn at any time free of penalty*
  • Interest withdrawals can be made at age 59 1/2, penalty free
  • Early interest withdrawals are subject to penalty**
  • No mandatory age for withdrawal
  • Interest bearing
  • No maintenance fees
  • FDIC insured

*Consult with your tax advisor.
**Certain exceptions apply, such as healthcare, purchasing your first home, and others.


Coverdell Education Savings Account (CESA)

This account provides tax-free earnings when the funds are used for the educational expenses (such as college) of a child.

  • Contributions are not tax deductible
  • No income restrictions or limits to open
  • Interest grows tax free
  • Withdrawals are tax free when used for qualified expenses*
  • Beneficiary must be under the age of 18 at account opening
  • Beneficiary does not have to be a relative
  • Mandatory distributions begin when beneficiary reaches the age of 30, if a balance remains
  • Maximum annual contribution of $2,000
  • Interest bearing 
  • No maintenance fees
  • FDIC insured

*Qualified expenses include tuition and fees, required books, supplies and equipment, and qualified expenses for room and board.

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