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Building a Secure Future: Introduction to IRAs and Retirement Planning

17 April 2025

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3 min

Building a Secure Future: Introduction to IRAs and Retirement Planning

Planning for retirement is one of the most important financial decisions we can make. Ensuring a stable future with financial Independence is not only possible, but achievable when it starts on time. At FirstBank, we’re with you on that journey, offering a variety of IRAs designed to fit your goals and lifestyle. From traditional options to accounts focused on your children’s education, discover how to invest with purpose and vision.

 

 

What is an IRA?

 

An IRA (Individual Retirement Account) is a tax-advantage savings tool designed to help you build a retirement fund. 

FirstBank offers a variety of IRAs that can be deductible or non-deductible when filing your income tax return. Deductible IRAs apply to people under the age of 75, and require that taxes be paid at the time of withdrawal. Non-deductible IRAs have no age limit, and do not require the payment of taxes at the time of withdrawal, given the taxes were paid for the year the income was received. Customers have the opportunity to contribute up to a maximum of $5,000, and married individuals filing their taxes jointly can contribute up to $10,000. 

 

In addition, FirstBank offers an Education Contribution Account (ECA), whereby you can contribute $500 per year to save for your children’s college education. The principal and interest of IRAs and ECAs are insured by the FDIC up to the maximum permitted by law.

 

And while all the products are designed to support you in your financial planning, each one has different features.


IRA CD (Deductible): Fixed Yield and Stability


If you prefer an investment strategy with a guaranteed return, the IRA CD offers various maturity terms, with compound interest credited quarterly.

 

Benefits:

  • Maturity terms of 1, 2, 3 and 5 years.

  • Contributions are deductible on your income tax return.1

  • Additional income to Social Security and other retirement plans.2

  • Quarterly statements and annual summary.

  • Penalties apply for early withdrawal.3

IRA Savings (Deductible): Flexibility and Convenience

 

The IRA Savings product is ideal for those who want to start saving through regular contributions. Thanks to the IRA Fácil4 service, these can be made automatically from your checking or savings account. 

 

Benefits:

  •  Maturity term of 1 year.

  • Tax-deductible on your income tax return.1

  • Additional income to Social Security and other retirement plans.2

  • Quarterly statements and an annual summary.

  • Penalties for early withdrawals. 3

First Roth IRA (Non-Deductible): Tax Freedom Upon Retirement

 

Unlike other IRAs, the First Roth IRA allows you to receive your contributions (principal + interest) tax-free once you withdraw them. Although contributions are not deductible, this account is ideal for those looking for retirement withdrawals with less of a tax burden. The Annual Percentage Yield (APY) is subject to the deposited amount being held in the account until maturity. 

 

Benefits:

  •  Maturity terms of 1 and 3 years.

  • Additional income to Social Security and other retirement plans.2

  • Quarterly statements and an annual summary.

  • Penalties for early withdrawals. 3

First Educational IRA (Deductible): Invest in Your Children’s Future


And because your children’s future deserves planning too, the First Educational IRA allows you to save to support their education and provides tax benefits as well. This IRA pays compound interest that is credited quarterly.

 

Benefits:

  • Maturity terms of 1 and 3 years. 

  • You can claim a deduction of $500 annually for each beneficiary.

  • This deduction can be claimed in addition to other IRAs. 

  • Quarterly statements and an annual summary. 

How can you open an IRA?


Applying for an IRA is easy. You only need: 

  • Your Social Security card

  • A valid government-issued photo ID (driver’s license, passport, military ID, among others) 

You can apply for your IRA directly at one of our branches or start the process online. 

One Step Today, Peace of Mind Tomorrow



Whether you’re thinking about retirement, how to supplement your future income, or how to support your children’s education, FirstBank has a solution for you. With our IRAs, you have savings tools at your fingertips, with real benefits designed to be there for you at every stage of your life.

 

Apply for your IRA today and build the future you deserve. 

FirstBank is a member of the FDIC.

1Up to the limit permitted by the provisions of the Internal Revenue Code. OCIF Lic # 31.  2Subject to the distribution limitations provided by the Puerto Rico Internal Revenue Code. Consult your tax or financial advisor.  3Penalties for early withdrawal: 1-year IRA CD, 3 months interest; 2, 3 and 5-year IRA CDs, 6 months of accrued interest, or the total of the interest accrued and/or paid, whichever is less than the principal of the interest rate of the IRA since its opening or last renewal, whichever was the last to occur. Minimum opening deposit and minimum balance to obtain the APY on 1, 2 and 3-year IRA CDs: $500. Minimum opening deposit and minimum balance to obtain the APY on a 5-year IRA CD: $1,000.00. Transfer fee to another institution: $50. Fees may reduce the account’s performance. The Annual Percentage Yield is subject to the deposited amount being held in the account until maturity. Penalties apply for early withdrawal. The opening deposit, APY and penalties may vary depending on the term of the IRA CD. Refer to the product disclosures provided during the account opening.  4Minimum opening with IRA Fácil $40.00; without IRA Fácil: $100. The IRA Fácil service allows you to automatically debit a deposit account at FirstBank, or that of another financial institution, to credit the IRA. Debits can be biweekly or monthly. However, the Annual Percentage Rate (APY) is subject to the deposited amount being held in the account until maturity. Transfer fee to another institution: $50. Fees may reduce the account’s performance. 

The contents in this section are provided for informational and educational purposes only and do not apply to all types of situations. The contents should not be construed as any type of advice or suggestion to take (or refrain from taking) any particular action, as it does not include or take into account all factors that may be relevant to your individual needs.

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