Planning for Retirement Starts With Choosing the Right Account
Tax Deferred
Allows your contributions to grow tax-deferred until you withdraw them in retirement. Depending on your income, contributions may also be tax-deductible—helping reduce your taxable income today while investing in your future. Withdrawals are taxed as ordinary income in retirement.
Tax-free growth
You contribute after-tax dollars, but your earnings grow tax-free—and qualified withdrawals in retirement are tax-free as well. It’s a great choice if you anticipate higher tax rates in the future or want more flexibility with withdrawals.
Changing Jobs? Rollover Your Retirement Savings
Avoid unnecessary taxes and penalties by rolling over your retirement savings into a Territorial Savings IRA. Simply ask your employer to initiate a direct rollover of your 401K into an IRA with us. Or rollover an existing IRA to consolidate your savings.
To protect your full savings, rollovers must be completed within 60 days of receiving funds from your former retirement plan. Missing the deadline may result in mandatory 20% tax withholding and additional penalties.
Please consult your tax advisor regarding your specific situation and the deductibility of IRA contributions.
Which IRA is Right for You
| Traditional IRA Best if you expect to be in a lower tax bracket later Visit Branch |
Roth IRA Best if you expect to be in a higher tax bracket later Visit Branch |
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|---|---|---|
| How Contributions Grow | Earnings grow tax-deferred | Earnings grow tax -free |
| Contribution Dollars | Pre-tax / Deductible | After-tax |
| 2026 Contribution Limit | $7,500 ($8,600 if 50+) | $7,500 ($8,600 if 50+) |
| Withdrawal Age | 59½ years old | Account open for 5 years + 59½ years old |
| Withdrawal Tax Treatment | Withdrawals are taxed as current income | Withdrawals are tax-free |
| Early Withdrawal Penalty | Before age 59½, you may incur a 10% penalty. | Earnings distributions are penalty free after 5 years and age 59½ |
| Required Minimum Distributions (RMDs) | Yes, starting at age 73. | None |
| Disclosures | Contact a Branch | Contact a Branch |