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Traditional IRAs

A traditional IRA allows you to defer taxes on your earnings until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which they are made.

You qualify if you are under age 70 1/2 for the entire tax year and have earned income (or your spouse has earned income), even if you already participate in any type of government plan, tax-sheltered annuity, simplified employee pension (SEP) plan, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE), or qualified plan (pension or profit sharing) established by an employer.

The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 increased the contribution amounts for both traditional and Roth IRAs. EGTRRA further increased contribution amounts for IRA owners who attain age 50 or older by the end of the year, allowing them to "catch-up" on their lost retirement savings.

See any of our representatives for more details and to complete the necessary forms.

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Roth IRAs

The Roth IRA is a nondeductible account that features tax-free withdrawals for certain distribution reasons after a five-year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, people who expect to be in a higher tax bracket when they retire may benefit more from these accounts than from a traditional IRA.

There are two requirements for eligibility to contribute to a Roth IRA: you (or your spouse) must have earned income, and your modified adjusted gross income (MAGI) cannot exceed certain limits (see the Single / Married, Joint Filers table below).

The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 increased the contribution amounts for both traditional and Roth IRAs. EGTRRA further increased contribution amounts for IRA owners who attain age 50 or older by the end of the year, allowing them to "catch-up" on their lost retirement savings.

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Coverdell Educational Savings Account

Investing in one of these accounts can help parents and others save for the expenses of a child's education. You can make up to a $2000 non-deductible annual contribution* to a CESA for children under the age of 18. Earnings on the Educational IRA may be tax-free provided that the funds are used to pay for qualified education expenses (including kindergarten through grade 12) of the designated child.

Virginia Commonwealth Bank offers a CESA investment in a Certificate of Deposit with a fixed rate for the term of the Certificate and interest compounded on a quarterly basis. Available terms are 1, 3, and 5 years.

For more details on the Coverdell Education Savings Account, please contact one of our offices.


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Since Virginia Commonwealth is a small bank, dedicated to serving the needs of our local communities, deposit accounts and loan applications are accepted only from residents of the communities served by our branch offices and their surroundings.