Retirement
Deposit/Investments

IRAs

Start saving today for your retirement. Your Credit Union offers a variety of IRA products to meet your needs.

As with any tax/retirement issue- Please consult your tax/retirement advisor. You can set up systematic savings with direct deposit or ACH origination.

Open Deposit IRA
This account pays a competitive rate of interest. It can be started with as little as $25. It is an open deposit account which can be setup as a Traditional IRA, a Roth IRA, or a Coverdell (Education) IRA.

IRA Share Certificate
Our IRA Share Certificates have a $2,000 minimum for terms from 3 months to 1 year and $1,000 minimum for terms from 18 months to 5 years. Interest is paid to the account monthly. This product is available as a Traditional IRA or a Roth IRA. Penalty for early withdrawal.

Traditional IRA
You can defer taxes on a Traditional IRA until they are withdrawn. Deposits may be tax deductible depending on your Modified Adjusted Gross Income.

Roth IRA
This is a non tax deductible account that features tax free withdrawals upon meeting Federal IRA guidelines.

Coverdell (Education) IRA
This is a non tax deductible account that features tax free withdrawals for a child's education. Contributions can be made to the child's account until the child turns 18 years old. A max contribution of $2,000 per child, from all sources, is allowed and is dependent on your Modified Adjusted Gross Income.

How are they Different?

Traditional IRA - In a traditional IRA, contributions you make to the account are often tax deductible and taxed upon withdrawal. This allows you to defer taxation until your retirement when you may be in a lower tax bracket.

Roth IRA - Contributions to a Roth IRA are NOT tax-deductible, but can be withdrawn tax and penalty free at any time. Earnings can be withdrawn tax and penalty free upon meeting Federal IRA guidelines. If you do not need the immediate tax break or expect to be in a higher tax bracket when you retire, this may be the account for you.

Coverdell (Education) IRA - This IRA allows individuals to save money for a child's education on a tax-favored basis. Withdrawals are tax and penalty free only for qualified education expenses. Earnings are subject to tax and penalty for other withdrawals.

What are the eligibility requirements and how much can I contribute per year?

Traditional IRA - You must be under 70½ years of age the entire tax year and have earned income to be eligible to contribute to a Traditional IRA. Even if you do not have earned income, you are still eligible as long as your spouse has earned income that year. You may contribute, per tax year, up to 100% of your earned income or a specified amount for that tax year, whichever is less.

Roth IRA - This account does not have an age restriction, however you must still have earned income in the tax year for which you would like to contribute, AND your modified adjusted gross income (MAGI) cannot exceed certain limitations.

* Please note that you CAN contribute to BOTH a Roth and a Traditional IRA each tax year, but the total combined contribution must not exceed the specified amount for that tax year.

Coverdell (Educational) IRA - Contributions can be made for a child under the age of 18. The aggregate contribution on behalf of any one child in a given tax year changes from year to year; consult your tax advisor. Funds must be used before the child turns 30 years old.

When MUST I take distributions from my IRA and how do I withdraw funds without any tax penalty?

Traditional IRA - You MUST begin taking distributions from a traditional IRA at age 70½ or you will face penalties. However, you can begin to withdraw your funds without the 10% IRS tax penalty for early withdrawal after age 59½ or for certain qualified distribution reasons (ex. First time homebuyers, Higher Education).

Roth IRA - There is no required minimum distribution rule on the Roth IRA; therefore, you may leave your money in a Roth IRA as long as you want. Contributions can be withdrawn tax and penalty free at any time. After the account has been opened five tax years, earnings can be withdrawn tax and penalty free for any of these reasons: over age 59 ½, disability, death, a first time home purchase or Education etc.

Coverdell (Education) IRA - Distributions for education expenses are penalty free and tax free when withdrawn for a qualified educational expense. Educational expenses include Higher Education.

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