Account Types

Traditional IRA

A traditional IRA is a way to save for retirement that gives you tax advantages. Contributions you make to a traditional IRA may be fully or partially tax deductible. Generally, amounts in your traditional IRA, including earnings and gains, are not taxed until distributed from the IRA. For detailed information, visit https://www.irs.gov/retirement-plans/traditional-iras.

Roth IRA

A Roth IRA is a way to save for retirement that gives you tax advantages. Any earnings on assets in a Roth IRA generally grow tax free. Contributions to a Roth IRA are not tax deductible. Generally, when distributions are taken from a Roth IRA they are tax-free provided certain requirements are met. For more information, visit https://www.irs.gov/retirement-plans/roth-iras.

SEP IRA

A SEP IRA, or Simplified Employee Pension Plan, allows employers to contribute to traditional IRAs set up for employees. A business of any size, even self-employed, can establish a SEP. Compared to other types of employee retirement plans, SEPs are easy to set up and operate, have low administrative costs, and allow flexible annual contributions. For more information on SEPs, visit the IRS website at: https://www.irs.gov/retirement-plans/plan-sponsor/simplified-employee-pension-plan-sep.

Inherited (Beneficiary) IRA

An Inherited IRA is inherited from a deceased individual’s Traditional, SEP, or Roth IRA. Federal tax laws require that the entire inherited IRA be distributed within a certain amount of time. The length of time varies according to the beneficiary’s relationship with the original account owner and age of the original account owner and the beneficiary. An inherited IRA allows you to leave the assets in the IRA to grow tax-deferred for as long as the rules permit. Additional information is available at https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary.

Non-Qualified Account

Unlike IRAs, non-qualified accounts do not receive tax benefits from the IRS. Investment income and capital gains are taxed in the year in which they are incurred. CNB allows the following types of non-qualified account registrations: Individual, Joint Tenants with Rights of Survivorship, Tenants in Common, Trust, Conservatorship, Guardianship, Custodial for Minors, and Estate. Using a custodian for non-qualified accounts allows a combined statement, consolidated tax reporting, a savings account for dividends to be directed to, and one place to call for questions regarding all funds within the account. For financial advisors that work with fee-based accounts, this allows all investments to be combined into one account for easy fee calculation and payment of the advisory fee from cash within the account.