IRA and HSA

Save for Your Health and Retirement

Health Savings Account (HSA)

High deductible health plans and medical expenses require forethought to avoid a big hit to the budget should medical needs arise. Plan ahead and start saving now with a health savings account at Cherokee State Bank.

HSA Advantages and Benefits

With an HSA you get protection against high or unexpected medical bills, the flexibility to be able to save for current or future medical needs and complete control over the account. An HSA is also portable. If you change employers or insurance carriers, you take your HSA with you. The funds will remain in the account from year to year, just like an IRA, with no “use it or lose it” rules. Contributions to this account are also 100% tax deductible, including tax-free earnings through investment and tax-free withdrawals for qualified medical expenses. 

HSA Eligibility

To be eligible for an HSA, you must be covered under a high-deductible health plan (HDHP). Ask a Cherokee State Bank expert for the current minimum deductibles. You cannot be covered by any other health plan that is not an HDHP, be enrolled in Medicare, or be claimed as a dependent on another person’s tax return. 

Contribution Limits

There are annual contribution limits established every year by the Internal Revenue Service (IRS). The maximum annual contribution amount is generally the less of 100% of the annual deductible under the HDHP or a specified amount. Limits are subject to change – ask a Cherokee State Bank expert for the current amount allowed when you apply. Annual out-of-pocket health expense limits are also subject to change – ask an associate for the current limits on single and family coverage.  

Eligible Expenses

You can use the money in your HSA to pay for any qualified medical expenses permitted under federal tax law. In general, this includes most medical, dental, and vision expenses, but not your insurance premium, unless you are unemployed and collecting federal unemployment benefits. For a list of eligible expenses provided by the Internal Revenue Service, visit www.irs.gov/pub/irs-pdf/p502.pdf.

You can use the money in the account to pay for medical expenses for yourself, your spouse, or your dependent children, even if they are not covered by your HDHP. 

How do I open my HSA?

• Enroll in an HSA qualified high-deductible health plan (HDHP) with an insurance carrier of your choice
• Stop by Cherokee State Bank to open your HSA

HSA Account Details

• $50 minimum to open
• No minimum balance required
• Self & employer contributions
• Unlimited check writing privileges
• Contact us for current rate information
• Online banking available
• Competitive account rates
• FDIC insured account
• Service Charge- A service charge of $3.00 plus tax if you receive paper statements. This service charge will not apply if you receive monthly statements electronically. 

* Contact us for current rate information

** Annual Percentage Yield (APY)

IRAs (Individual Retirement Accounts)

It pays to plan ahead. There are so many things to consider when thinking about your retirement. We can help you get the retirement you want. Our team can share with you how an IRA can be an essential part of your retirement. These tax-advantaged accounts can help you save for the future. Let our knowledgeable financial experts tell you more about these accounts to help you set up the account that's right for you.

Traditional IRA – Anyone with income and under the age of 70½ can open a traditional IRA.

• For contribution limits, consult with your tax advisor
• Contributions are tax-deductible*
• Interest earnings are tax-deferred
• Withdrawals can begin at age 59½
• Early withdrawals subject to penalty**
• Mandatory withdrawals begin at age 70½
• $1,000 minimum to open
• No maintenance fees
• FDIC insured

*Consult with your tax advisor.
** Certain exceptions apply, such as healthcare, purchasing a first home, and others.

Roth IRA – The Roth IRA is a retirement investment option that if used correctly can result in a tax-free retirement. 

• For contribution limits, check with your tax advisor
• Contributions are not tax-deductible
• Earnings are 100% tax-free upon withdrawal
• Direct contributions can be withdrawn free of penalty at any time*
• Early interest withdrawals subject to penalty**
• No mandatory withdrawals at age 70½
• $100 minimum to open
• No maintenance fees
• FDIC insured

*Consult with your tax advisor; subject to the 5-year rule being met.
** Certain exceptions apply, such as healthcare, purchasing a first home, and others.

A Simplified Employee Pension (SEP) plan allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan. A SEP-IRA account follows the same investment, distribution, and rollover rules as traditional IRAs.

• For contribution limits, talk with your tax advisor
• Must be age 21 or older and have worked three of the last five years with the company
• Interest earnings are tax-deferred
• Withdrawals can begin at age 59½
• Early withdrawals subject to penalty
• Mandatory withdrawals begin at age 70½
• $1,000 minimum to open
• No maintenance fees
• FDIC insured

¹Annual contribution limits are set annually by the Internal Revenue Service (IRS).