Individual retirement accounts (IRAs) help you plan for tomorrow, today.

The sooner you start saving for retirement, the more time you will have for your money to grow. At Carter Bank & Trust, Traditional and Roth IRAs that help you save on a tax-deferred basis depending on your age, income, and financial goals.

We also offer a Coverdell Education Savings Account (ESA), a flexible, tax-advantaged way to save for your children’s education. An ESA offers more investment options than a savings account and can be used for K-12 qualified education expenses. Planning for the future is a great way to gain peace of mind.


Discover more information about the Retirement Enhancement Act of 2019 (The Secure Act)


  • Earnings grow federal income tax-deferred until withdrawn at or after the age of 59 ½ at which time they are taxed at your current federal income tax rate
  • Contributions and earnings can be withdrawn free of the 10% additional federal income tax at or after the age of 59 ½
  • Contributions may be tax deductible


  • Anyone who has earned income equal to or greater than their IRA contribution amount
  • Subject to exceptions, a required minimum distribution must be taken at the beginning of the year in which you turn 72 years old
Young male reviewing his traditional IRA funds with his Carter Bank account.


  • Earnings are federal income tax-free if withdrawn at or after the age of 59 ½ and the account has been open for five years or more
  • Contributions (not earnings) can be withdrawn tax free at any time*


  • Any age as long as your modified adjusted gross income for 2022 does not exceed $144,000 for single tax filers and $214,000 for joint tax filers
  • Traditional IRA may be converted to Roth IRA regardless of your modified adjusted gross income. Restrictions mentioned previously only apply to how much you can contribute a Roth IRA.


  • No required minimum distribution ever

*There is a single, five-year holding period when determining whether earnings can be withdrawn federal, and in many cases state, income tax-free as part of a qualified distribution from a Roth IRA. This period begins January 1 of the year of the first contribution to any Roth IRA account. Unlike the Traditional IRA, contributions are not tax deductible.

Older Couple enjoying retirement utilizing their Carter Roth IRA funds.

In 2002, the Education IRA was renamed the Coverdell Education Savings Account (ESA) in memory of a champion of the Education IRA, U.S. Senator Paul Coverdell, who died of a cerebral hemorrhage in 2000 at the age of 61.


  • A tax-deferred account with earnings and withdrawals free from federal income tax if used for qualified education expenses
  • Unlike 529 college saving plans, Coverdell ESA’s qualified education expenses include college and K-12 private school education*
  • Maximum yearly contribution per child is $2,000 until 18 years old with exceptions for special needs’ children**


  • Single tax filer with a modified adjusted gross income in 2022 less than $95,000 (partial contribution between $95,000 and $110,000)
  • Joint tax filer with a modified adjusted gross income in 2022 less than $190,000 (partial contribution between $190,000 and $220,000)
  • Contribution age limit is 18 and contribution must be used by the recipient of these funds by the age of 30***

Penalties for Non-qualified Withdrawals

  • Earnings subject to income tax
  • 10% IRS penalty on earnings with certain exceptions

*Qualified education expenses include tuition, room and board, fees, books, equipment and supplies at an eligible K-12 and post-secondary school, along with computer equipment for K-12 (restrictions apply).

**A Special Needs ESA may continue to receive contributions after the intended recipient of these funds turns 18 years old.

***ESA can remain for the recipient of the ESA until this recipient turns 30. Any balance remaining in the ESA at the time the recipient becomes 30 years old must be distributed within 30 days.

Young couple feeling confident with their Carter Educational IRA account.

The calculators on our website are provided for informational purposes only. Carter Bank & Trust and our affiliates disclaim any warranties, endorsement or representation, express or implied, related to these resources.

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Early withdrawal penalties may be imposed for early withdrawals. The interest rate and annual percentage yield may change. At our discretion, we may change the interest rate daily. Fees may reduce earnings.