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IRAs & SPECIAL SAVINGS ACCOUNTS
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An Individual Retirement Account (IRA) is an excellent tool for retirement
savings. Unlike most investments, depending on the type of IRA you choose,
contributions may be tax deductible and will grow either tax-deferred or
tax-free. Community West Bank offers more IRA choices than ever before with
competitive rates and various terms to meet your needs. Protect your financial
future by choosing one of our Traditional, Roth or Education IRAs or transfer
your existing Individual Retirement Account to Community West Bank.
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Traditional IRA
The traditional IRA is an account which allows you to defer taxes on your
earnings until they are withdrawn. Certain contributions are tax-deductible in
the tax year for which they are made. If you are under 70½ for the entire tax
year and have earned income (or your spouse has earned income), you may be
eligible to establish a traditional IRA.
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Roth IRA
The Roth IRA has no age limit and features tax-free withdrawals for certain
distributions after a five-year holding period. Roth IRA earnings are tax-free
but contributions are nondeductible and taxed in the year they are earned.
People who expect to be in a higher tax bracket after retirement may benefit
more from this account than from a traditional IRA. There are two eligibility
requirements for a Roth IRA: you or your spouse must have earned income and
your modified adjusted gross income (MAGI) cannot exceed certain limits.
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Education Savings Account
A Coverdell Education Savings Account (ESA) (formerly Education IRA) is a great
way for parents, grandparents and others to meet the rising costs of a
student's education. ESAs allow you to contribute a specified amount each year
for higher education. While there is no tax deduction for contributions to an
ESA, earnings grow tax-free . Be sure to consult your financial or tax advisor
regarding guidelines for the Federal and State tax ramifications of your IRA
contributions and withdrawals.
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