Tax Advantaged Investment Solutions for Retirement, Education and Health Savings

Let Columbia Bank help you plan for the future. Whether you're looking to grow your nest egg for retirement, support a beneficiary's education, or supplement coverage for medical expenses with a health savings account, we have a tax-advantaged¹ investment solution for you!

1. Please consult your tax advisor for tax advantage eligibility.

Calculate your own personal nest egg with our Retirement Calculator!

• An Individual Retirement Account mostly funded with pre-tax dollars

• An Individual Retirement Account with non-deductible contributions and tax-free withdrawals.

• Let your contributions grow tax free to help fund a beneficiary's (child) primary and post-secondary education expenses. 

• Supplement your High Deductible Health Plan (HDHP) by paying for medical expenses with a tax-exempt, interest-bearing savings account.  Contributions, tax deductible, earnings tax deferred, and distributions tax free for qualified medical expenses. 

Traditional IRA

• The maximum allowable IRA contribution for tax year 2011 and 2012 is $5,000. ($6,000 for individuals age 50 and older)
• Allows individuals to enjoy tax-deferred interest while saving for retirement.
• IRA contributions are tax deductible for individuals who are not active participants in qualified retirement plans.
• For active qualified plan participants, a tax deduction may be available - depending on income levels.
• Direct Rollover IRA allows an individual to retain tax-deferred status when rolling over funds from a pension plan.
• IRA distributions are not subject to IRS penalty after age 59 ½.
• Minimum required distributions must start at age 70 ½.
• IRA funds grow at a faster rate because IRA earnings are tax deferred.

Roth IRA

• Individuals can make non-deductible contributions of up to $5,000 for tax year 2011 and 2012. ($6,000 for individuals age 50 and older)
• Distributions are tax-free and IRS penalty-free for qualifying first-time homebuyers and individuals over age 59½.
• No minimum distribution required at age 70½.

Coverdell Education Savings Account (CESA)

• The purpose of a CESA is to fund the future cost of a beneficiary's (child) primary and post secondary education at an eligible school, college or vocational school.
• Non-deductible contributions of up to $2,000 annually per designated beneficiary under age 18. The beneficiary may be a child, grandchild or another eligible relative.
• Distributions for qualified higher-education expenses, such as tuition, fees, books, supplies, equipment and other related expenses, are both tax-free and IRS penalty-free.
• Contributions must stop when the beneficiary reaches the age of 18, and funds must be distributed by age 30. If funds are not distributed, they can be rolled over into a new Coverdell account for the benefit of a different qualifying relative.

Health Savings Account (HSA)

Tax-exempt trust or custodial account established exclusively to pay qualified medical expenses of the HSA owner and family members.

• Eligibility requirements:
  • Must be covered by a high deductible health plan
    • 2012 Single Coverage: Deductible of at least $1,200 AND the maximum out-of-pocket expenses of $6,050.
    • 2012 Family coverage: Deductible of at least $2,400 AND the maximum out-of-pocket expenses of $12,100.
  • Must not be covered by any other health plan that is not considered a high deductible health plan.
  • Must not be entitled or enrolled for benefits under Medicare.
  • Must not be claimed as a dependent on another person's tax return.
  • HSA contributions are no longer limited by a health plan's deductible amount, resulting in higher contribution amounts for most HSA holders.
  • IRA holders may make a one time "direct rollover" to an HSA.
  • HSA holders are allowed to make a one time transfer of assets from FSA or HRA plans to an HSA.
  • HSA holders with FSAs are now eligible to make HSA contributions during the grace period (first three months of the year) allowed for FSAs.
• Contributions:
  • Self-only Coverage: The maximum yearly contribution amount for 2011 is $3,050 and for 2012 is $3,100.
  • Family Coverage: The maximum yearly contribution amount for 2011 is $6,150 and for 2012 is $6,250.
  • "Catch-up" contribution allowed for individuals age 55 and over is $1,000.
  • Contributions must be made by April 15th.
• Distributions:
  • Tax-free distributions if funds are used to pay for medical expenses.
  • Distributions for non-medical expenses are taxable, and subject to a 20% penalty if withdrawn before age 65 (except in the cases of death or disability).

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