Retirement & Educational Account Options


Understanding retirement and educational savings account options to plan for the future

Whether you’re thinking about retirement or are focused on building savings for your child’s educational expenses, it’s important to understand the different options available to support your goals.

Individual Retirement Account (IRAs)

Available to most individuals, an IRA is a secure way to save for retirement. The two most common types of accounts are Traditional and Roth IRAs. While these accounts pursue the same goal and offer many of the same benefits, they each have some unique features:

Traditional IRA Features

  • Contributions can be pre- or after-tax dollars
  • Some contributions may be tax-deductible
  • Tax is paid at the time of withdrawal for pre-tax or deducted contributions
  • Mandatory distributions are required after age 72
  • Anyone with earned income is eligible

Roth IRA Features

  • Tax is paid at the time of the contribution
  • Contributions are not tax-deductible
  • Withdrawals are penalty and tax-free after 5 years and age 59½
  • You can make contributions to your Roth IRA after you reach age 70½
  • No mandatory distribution are required
  • To be eligible, income must be below a certain level

If you’d like assistance planning for retirement, please contact us at (209) 444-5300 to set up an appointment.

Coverdell Savings Account (Coverdell ESA)

A Coverdell Savings Account is designed specifically for paying for qualified educational expenses. When established, a Coverdell ESA must have a designated beneficiary who is under 18 years old or a special needs beneficiary. Features of these account include:

  • Tax-deferred growth and distributions
  • Savings can be used for expenses including tuition, room, board, computers/laptops, books and supplies, tutoring, and transportation.
  • Funds can be utilized for elementary, secondary, and higher education expenses. 
  • Funds must be distributed to the child by age 30 or rolled over to another child.

Learn more about Individual Retirement Accounts and Coverdell Savings Accounts by visiting the IRS’s website today.