Learn About Our Retirement Products

Simsbury Bank offers a full array of tax advantaged vehicles and savings options. Read on to find out which bank insured products best fit your savings strategy, lifestyle and retirement goals.

• Traditional IRA
• Roth IRA
• SEP IRA
• QRP (Keogh)
• Rollover IRA
• Simple IRA
• Year Round IRA

Traditional IRA

A tax-advantaged way to save for retirement

• Earnings are tax-deferred until withdrawn
• Contributions may be tax-deductible

Who is it for?
A Traditional IRA is intended for anyone under the age of 70 1/2 who has earned income and is looking for a tax-efficient way to save for retirement.

Contribution deadline
April 15, 2013, for tax year 2012; April 15, 2014, for tax year 2013.

Maximum annual contribution amounts
The account owner must be under age 70½ and have earned income equal to or greater than the amount of their contribution.

Withdrawals
Withdrawals are taxed as ordinary income, and can be made without penalty after age 59½.

There is a 10% penalty for withdrawals taken before age 59½, unless the withdrawals are made for one of the following reasons:

• Higher education expenses for you or a family member
• Qualified first-time home purchase expenses ($10,000 lifetime limit)
• Death or disability of the account owner
• Certain medical expenses and health insurance premium payments of unemployed individuals and un-reimbursed expenses exceeding 7.5% of adjusted gross income (AGI)

Withdrawals made in equal installments over the account holder's life expectancy

The IRS mandates Traditional IRA owners begin taking Required Minimum Distributions (RMD) at age 70½. There is a 50% penalty if you do not withdraw the required minimum in the year you turn 70½ or if you take less than the required amount.

For details and additional information on Traditional IRAs, please see IRS Publication 590 at www.irs.gov.

Minimum initial investment
None

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Roth IRA

The most tax-advantaged IRA

• Earnings grow tax-deferred
• No federal tax on withdrawals
• No required minimum distributions

What is it?
A Roth IRA provides your contributions and investment earnings the opportunity to grow free from tax until you retire. Generally, Roth IRAs offer greater tax savings and withdrawal flexibility than Traditional IRAs, and there are no required minimum distributions at age 70½.

Who is it for?
A Roth IRA is intended for investors who want to save for retirement on a tax-free basis, while enjoying more flexibility with withdrawals. Individual and joint tax filers, who have an annual modified adjusted gross income less than $125,000 and $183,000, respectively for tax year 2012 ($127,000 and $188,000 respectively for tax year 2013) are eligible to contribute to Roth IRAs.

The account owner must be under age 70½ and have earned income equal to or greater than the amount of their contribution.

Maximum annual contribution amounts
The account owner must be under age 70½ and have earned income equal to or greater than the amount of their contribution.

Withdrawals
Contributions may be withdrawn at any age, penalty-free. Earnings can be withdrawn federally tax free after age 59½, provided the account has been open for five years.

There is a 10% penalty for withdrawals taken before age 59½, unless the withdrawals are made for one of the following reasons:

• Higher education expenses for you or a family member
• Qualified first-time home purchase expenses ($10,000 lifetime limit)
• Death or disability of the account owner
• Certain medical expenses and health insurance premium payments of unemployed individuals and un-reimbursed expenses exceeding 7.5% of adjusted gross income (AGI)
• Withdrawals made in equal installments over the account holder's life expectancy (substantially equal periodic payments)

For details and additional information on Roth IRAs, please see IRS Publication 590 at www.irs.gov.

Minimum initial investment
None

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SEP IRA

For the self-employed and businesses with few employees

• Features many of the same tax advantages as a 401(k)
• Funded solely by employer contributions
• Contribute up to 25% of compensation

Who is it for?
A SEP-IRA is best for employers who want flexibility in the amounts they contribute annually and want a simple, easy-to-administer, low-cost plan with no complicated tax filings. A SEP-IRA may be best for the following people:

• A self-employed individual
• An employer with few or no employees
• An employer who wants to make high contributions to their own accounts and the accounts of partners or employees

The employer and their employees can establish their own SEP-IRAs. The employer contributions are then made into each eligible employee's SEP-IRA.

Tax Advantages
As a small business owner, you can deduct contributions for yourself and your employees from your company's federal income tax.

Contributions

• Employers can contribute up to 25% of compensation, up to $50,000 for 2012 ($51,000 for 2013). The maximum compensation on which contributions can be based is $250,000 for 2012 ($255,000 for 2013). These amounts may be subject to cost-of-living adjustments.
• Contributions do not have to be made every year, but if employers contribute to their own accounts, they also must contribute to the accounts of all eligible employees.
• Contributions must be made by the company's tax filing deadline (including any extensions).
• SEP IRA owners may also make contributions to a Roth or Traditional IRA in the same year, provided eligibility requirements are met. For more information, refer to the Roth and Traditional IRA Contribution Guidelines.

Withdrawals
Withdrawals are taxed as ordinary income. There is a 10% penalty for withdrawals before age 59½, unless the withdrawal is made for one of the following reasons:

• Transfer to a Rollover IRA, Traditional IRA, or employer-sponsored plan
• Higher education expenses for you or a family member
• Qualified first-time home purchase expenses ($10,000 lifetime limit)
• Death or disability of the account owner
• Certain medical expenses including qualifying health insurance costs for certain unemployed individuals and non-reimbursed expenses exceeding 7.5% of adjusted gross income (AGI)
• Withdrawals made in equal installments over the account holder's life expectancy (substantially equal periodic payments)

The IRS mandates that SEP IRA owners begin taking required minimum distributions (RMD) at age 70½. There is a penalty of 50% if you do not withdraw the required minimum in the year you turn 70½ or if you withdraw less than the required amount.

Please see IRS Publication 560 at www.irs.gov for further details regarding SEP IRA eligibility, contributions, withdrawals, and plans.

Minimum to Open
None

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QRP (Keogh)

Profit-sharing plan for small businesses with few or no employees and varying profits

• Flexible contributions can vary with your business’s performance
• Deduct contributions from your company’s federal income tax

Who is it for?
A Qualified Retirement Plan (QRP), also known as a Keogh, may be appropriate for small businesses with few or no employees and for self-employed individuals with fluctuating profits or limited financial resources. A Keogh is a profit-sharing plan for small businesses that offers greater flexibility in choosing the percentage of income to contribute each year. It does not require an annual contribution and offers an efficient cost-control system.

Tax Advantages
As a small business owner, you can deduct contributions for yourself and your employees from your company's federal income tax.

Annual Contribution Amounts

• Employers can contribute up to 25% of compensation, up to $50,000 for 2012 ($51,000 for 2013). The maximum compensation on which contributions can be based is $250,000 for 2012 ($255,000 for 2013). These amounts may be subject to cost-of-living adjustments.
• Contributions do not have to be made every year, but if employers contribute to their own accounts, they also must contribute to the accounts of all eligible employees.
• Contributions must be made by the company's tax filing deadline (including any extensions).
• QRP owners may also make contributions to a Roth or Traditional IRA in the same year, provided eligibility requirements are met. For more information, refer to the Roth and Traditional IRA Contribution Guidelines.

Withdrawals
Eligible rollover distributions that are not rolled over to another qualified retirement plan or a traditional IRA are subject to a mandatory 20% withholding.

Generally, there is a 10% penalty for withdrawals before age 59½, however some exceptions apply:

• Death or disability of the account owner
• Withdrawals made in equal installments over the account holder's life expectancy (substantially equal periodic payments)
• Distributions made to the employee following separation from service after reaching age 55
• Certain medical expenses and health insurance costs for unemployed individuals and un-reimbursed expenses exceeding 7.5% of adjusted gross income (AGI)

The IRS mandates that QRP participants who own 5% or more of the business must begin taking required minimum distributions at age 70½. There is a 50% penalty if you do not withdraw the required minimum distribution beginning the year you turn 70½ or if you take less than the required amount.

Please see IRS Publication 560 at www.irs.gov for further details regarding Keogh eligibility, contributions, withdrawals, and plans.

Minimum to Open
None

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Rollover IRA

Three reasons to consider a rollover:

• Expand your investment options
• Consolidates your assets for simpler management
• Maintains the account’s tax-deferred status

Who is it for?
A Rollover IRA is intended for those who are changing jobs or those who have retirement accounts with previous employers. For such investors, the consolidating of several retirement plans may greatly simplify the management of retirement assets and increase investment choices by allowing investment in stocks, bonds, and mutual funds, and exchange-traded funds.

FDIC insured certificates of deposit (CDs) and money market savings accounts.

Withdrawals
Withdrawals are taxed as ordinary income, and can be made without penalty after age 59½.

There is a 10% penalty for withdrawals taken before age 59½, unless the withdrawals are made for one of the following reasons :

• Higher education expenses for you or a family member
• Qualified first-time home purchase expenses ($10,000 lifetime limit)
• Death or disability of the account owner
• Certain medical expenses and health insurance premium payments of unemployed individuals and un-reimbursed expenses exceeding 7.5% of adjusted gross income (AGI)
• Withdrawals made in equal installments over the account holder's life expectancy

Minimum initial investment
None

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Simple IRA

Like a 401(k) plan for small businesses.

• Easy set-up, cost effective and less complicated tax filings
• For companies with fewer than 100 employees
• Employer match contributions may be tax deductible

Who is it for?
A SIMPLE IRA is for sole proprietors and businesses with less than 100 employees looking for an easy way to provide a tax-deferred retirement plan to their employees. It can be established for the benefit of the employer, employees, or both.

Employers must have steady income to meet mandatory contribution requirements, while employees must have earned at least $5,000 in any two previous years and expect to earn at least the same in the current year.

What can I invest in?
Your investment options include over 13,000 mutual funds, in addition to stocks, bonds, options, and exchange-traded funds (ETFs).

Contributions
Employees can contribute up to 100% of their compensation to a maximum of $11,500 ($14,000 for those 50 and over) for 2012 and a maximum of $12,000 ($14,500 for those 50 and over) for 2013. These amounts may be subject to cost-of-living adjustments.

Employers have two contribution options:

• They can match employee salary contributions up to 3% of compensation. This can be reduced to 1% in any 2 out of 5 years3.
• They can make a non-elective contribution of 2% of compensation for all eligible employees (including those who decide not to contribute for themselves), regardless of whether the participant contributes.

Deadlines

• The employer must establish the plan before October 1st of the year that the account is being opened
• Employer contributions can be made annually before the tax-filing deadlines
• Employee contributions must be deducted and deposited monthly from their salaries

Withdrawals
Withdrawals are taxed as ordinary income. There is a 10% penalty for withdrawals taken before age 59½, unless the withdrawals are made for one of the following reasons:

• Higher education expenses for you or a family member
• Qualified first-time home purchase expenses ($10,000 lifetime limit)
• Death or disability of the account owner
• Certain medical expenses and health insurance premium payments of unemployed individuals and un-reimbursed expenses
• Withdrawals made in equal installments over the account holder's life expectancy
• If the withdrawal occurs within the first 2 years of participation in the Simple IRA plan, the 10% penalty is increased to 25%.

There is a penalty of 50% if you reach age 70½ and do not start the Required Minimum Distribution (RMD) from the account, or if you take less than the required amount.

Please see IRS Publication 560 at www.irs.gov for further details regarding SIMPLE IRA eligibility, contributions, withdrawals, and plans.

Minimum to Open
None

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Year ‘Round IRA CD

Our innovative IRA option that allows you to add savings throughout its 15- month term and lock in a great interest rate with the security of FDIC insurance.

• Receive the same rate for all deposits that you make during the 15-month term of this CD
  
• Excellent option for 401(k) rollovers or IRA consolidation that allows you to control your savings directly

Download our Year 'Round IRA Brochure

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