Individual Retirement Accounts

​Traditional Individual Retirement Account (IRA)

A Traditional IRA is an individual retirement account that offers tax advantages to savers. Here are the key details on the Traditional IRA:

• The IRA contribution limit for 2025 is $7,000, or $8,000 if you’re age 50 or older.

• You can use an IRA to save even if you or your spouse already participate in a workplace retirement plan. If you or your spouse are covered by a retirement plan at work, the deductibility of your contribution to a Traditional IRA will be subject to income limitations based on your income level (Modified Adjusted Gross Income or MAGI) and filing status. Your tax professional can help you determine your actual deduction.

• Contributions are made with pre-tax dollars.

• Earnings remain tax deferred until you make withdrawals from your account.

• Contributions and earnings are taxed as ordinary income when you withdraw them.

• You can withdraw funds from your IRA without a 10% premature distribution IRS penalty after you reach 59½.
   

Roth Individual Retirement Account (IRA)

Unlike a Traditional IRA, your contributions to a Roth IRA are made with after-tax dollars and are therefore not tax-deductible. These contributions can be withdrawn at any time tax-free.

• In 2025, you can make contributions to a Roth IRA of up to $7,000 — or $8,000 if you are age 50 or older — and you can use it in addition to a 401(k).

• You are eligible to contribute to a Roth IRA if you or your spouse has compensation below the limits for the tax year. For single filers, the ability to contribute starts phasing out with a MAGI of $150,000 and is eliminated at $165,000 for 2025. For those married and filing jointly, the phase-out range starts at $236,000 and is eliminated at $246,000 for 2025.

• You cannot take a tax deduction for any contribution that you make to a Roth IRA. However, when you make a withdrawal, you pay no taxes on any of the earnings that your contributions have generated, provided you take the earnings as part of a “qualified distribution”.

• To fulfill the IRS’s Roth IRA Qualified Distribution requirements, you must meet a five-year holding period for your Roth IRA. This period begins as of the first day (January 1st) of the tax year for which you made your first Roth contribution. After that, any Roth IRA earnings you withdraw for a “Qualified Distribution” reason listed below are income tax free and IRS penalty tax free. Qualified distribution reasons are:
  • ​Made on or after the date on which you attain age 59½
  • Made to the beneficiary (or your estate) upon your death
  • Attributable to your being totally and medically certified disabled
  • Qualifying “first-time” home purchase (up to a $10,000 lifetime limit)

Individual Retirement Account (IRA) CD

A PCSB Bank IRA CD combines the benefits of an Individual Retirement Account (IRA) with the stability and fixed interest rates of a Certificate of Deposit (CD).² Because the IRA contributions are invested in a CD, you have the opportunity to save for retirement with potentially higher interest earnings compared to a standard savings account. IRA CDs function like regular CDs in that you will have to lock in your money for a set term (ranging from several months to several years) in exchange for a fixed interest rate. IRAs come in two types: Traditional and Roth.

• PCSB Bank’s IRA CDs are safe and low risk since returns are fixed and the principal is insured by the FDIC up to $250,000 per person, per account type.

• Contributions to IRA CDs are subject to the annual limits set by the IRS. In 2025, the limit is $7,000, or $8,000 if you’re age 50 or older. 

• Withdrawing funds from an IRA CD before the maturity date may incure penalties. Plus, if you're under the age of 59½, you may face a 10% IRS early withdrawal penalty, in addition to paying income taxes on the withdrawal amount in the case of a Traditional IRA CD. 
   

¹Consult your tax advisor regarding your eligibility for these tax advantages.

²IRA CDs and business CDs cannot be opened online and must be opened in-branch. CD Special rates must be requested when a CD is opened or renewed in-branch. There is a substantial penalty for early withdrawal from a certificate account. Fees could reduce earnings on accounts. Refer to our Certificate of Deposit Account Disclosure for more information about these accounts. Please note that CDs cannot be renewed online, however they can be renewed by calling our Customer Service Center at 888-808-4700, through secure conversations in Online & Mobile Banking, or by visiting your nearest PCSB Bank location. To find out the current CD rates and terms, visit our rates page, or your nearest PCSB Bank location or call 888-808-4700.

Contact us or visit a New York branch conveniently located throughout Westchester, Putnam, Dutchess and Rockland Counties, to get started.

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