iras & 401k
An IRA can be a smart way to invest in your retirement. Learn about the different types of IRAs and how to open an account.

What is an IRA?

An IRA can be a smart way to invest in your retirement. Learn about the different types of IRAs and how to open an account.


Open an IRA

An individual retirement account (IRA) is a tax-advantaged investment account designed to help you save toward retirement. IRAs are one of the most effective ways to save and invest for the future. They allow your money to grow on a tax-deferred or tax-free basis, depending on the type of account (see the table below for details).

Illuminus Bank’s IRA and 401(k) Plans are designed to help individuals and businesses achieve long-term financial security and retirement goals. Here’s an overview of what Illuminus Bank offers:

Illuminus Individual Retirement Accounts (IRAs)

1. Traditional IRA

  • Tax Advantages: Contributions may be tax-deductible, and earnings grow tax-deferred until withdrawal.
  • Flexible Contribution Limits: Meet annual IRS guidelines for contributions.
  • Eligibility: Available to individuals below a certain income level (as per IRS rules).

2. Roth IRA

  • Tax-Free Growth: Contributions are made with after-tax dollars, but withdrawals in retirement are tax-free.
  • No Age Restrictions: Contributions can be made regardless of age, as long as you meet income eligibility.
  • Flexible Withdrawals: Withdraw contributions penalty-free at any time.

3. SEP IRA (Simplified Employee Pension)

  • Business-Friendly: Perfect for small business owners and self-employed individuals.
  • High Contribution Limits: Employers can contribute up to 25% of compensation annually.
  • Easy Setup: Minimal paperwork and administrative burden for businesses.

Illuminus 401(k) Plans

1. Individual 401(k) (Solo 401(k))

  • Exclusive for Self-Employed: Designed for self-employed individuals or small business owners with no employees.
  • Higher Contribution Limits: Includes both employee and employer contributions for maximum savings.
  • Loan Options: Borrow against your plan for personal needs or investments.

2. Traditional 401(k)

  • Employee Pre-Tax Savings: Contributions are made before taxes, reducing taxable income.
  • Employer Matching Programs: Illuminus Bank offers guidance to employers to set competitive match rates.
  • Variety of Investment Options: Diversify your retirement portfolio with stocks, bonds, ETFs, and more.

3. Roth 401(k)

  • Post-Tax Contributions: Ideal for those anticipating higher tax rates during retirement.
  • Tax-Free Withdrawals: Enjoy tax-free income in retirement.
  • Flexibility: Combine Traditional and Roth options for a balanced tax strategy.

Application Process for IRAs and 401(k)s

Step 1: Initial Consultation

  • Schedule a meeting with an Illuminus Bank retirement specialist to determine the best account type.

Step 2: Submit Required Information

  • For IRAs: Provide proof of income and personal identification.
  • For 401(k): Employers need business registration details and employee information.

Step 3: Select Investment Strategy

  • Choose from a variety of portfolios based on risk tolerance and financial goals.

Step 4: Set Up Contributions

  • Automate monthly contributions or make flexible one-time deposits.

Benefits of Choosing Illuminus Bank

  1. Expert Advice: Access to dedicated financial advisors specializing in retirement planning.
  2. Competitive Fees: Transparent pricing with no hidden charges.
  3. Investment Variety: Diversified options to ensure long-term growth.
  4. Digital Access: Manage accounts and track progress via the Illuminus Bank App.
  5. Retirement Tools: Use calculators and educational materials to optimize your contributions.


Description

  • No tax on the portion of your income you invest
  • No tax on additional value your investments gain
  • Potential taxes on withdrawals in retirement
  • Funded with income that has been taxed
  • No tax on additional value your investments gain
  • No taxes on withdrawals in retirement
  • A traditional IRA an employer sets up for themselves and employees
  • Earnings grow tax free and are subject to the same rules as traditional IRAs


Eligibility

  • Any age
  • Must have earned income/wages
  • Any age
  • Must have earned income/wages
  • Income thresholds apply
  • Any age. However, the employer can set a minimum age (below age 21)
  • Any size business, including self-employed individuals and independent contractors
  • Certain salary and service requirements can apply


Contribution limits

  • Under age 50: $7,000 per year
  • Over age 50: $8,000 per year

  • Under age 50: $7,000 per year
  • Over age 50: $8,000 per year

  • Up to 25% of compensation
  • $69,000 in 2025 and $70,000 in 2026
  • No catch-up contributions


Distributions and withdrawals

  • Required minimum distributions start at age 73 (distributions are taxed)
  • Penalty for withdrawals before age 59-1/2
  • No required minimum distributions
  • Penalty for withdrawals before age 59-1/2
  • Required minimum distributions start at age 73 (distributions are taxed)
  • Penalty for withdrawals before age 59-1/2


How to open an IRA

You can easily open and fund an IRA. Whether you prefer investing on your own or want personal investment guidance, we have an option to fit your needs. When you open an IRA, you’ll enjoy benefits like tax-advantaged growth, which can mean more money saved for your future.


IRAs for the self-employed, and small business owners

If you’re self-employed or a small business owner, consider a simplified employee pension (SEP) IRA for yourself and any employees. A SEP IRA offers higher contribution limits than other retirement accounts. For the 2024 tax year, contributions can be up to 25% of compensation, with a $69,000 maximum.


401(k) rollover


Rolling over your employer-sponsored 401(k) or 403(b) accounts into an IRA can give you a clearer view of your retirement investments. We’ll help you make sense of your options and gain confidence as you navigate the tax implications of your retirement savings decisions. 

Disclosure

Exchange Traded Funds (ETFs) are subject to risks similar to those of stocks, such as market risk. Investing in ETFs may bear indirect fees and expenses charged by ETFs in addition to its direct fees and expenses, as well as indirectly bearing the principal risks of those ETFs. ETFs may trade at a discount to their net asset value and are subject to the market fluctuations of their underlying investments.

A rollover of qualified plan assets into an IRA is not your only option. Before deciding whether to keep an existing plan, or roll assets into an IRA, be sure to consider potential benefits and limitations of all options. These include total fees and expenses, range of investment options available, penalty-free withdrawals, availability of services, protection from creditors, RMD planning, and taxation of employer stock. Discuss rollover options with your tax advisor for tax considerations.

Investment and insurance products and services including annuities are:
Not a deposit • Not FDIC insured • May lose value • Not bank guaranteed • Not insured by any federal government agency.

The information provided represents the opinion of Illuminus Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.