Individual retirement accounts are a smart way to save for the future. A
Traditional IRA can be opened and funded without any employer participation.
Contributions and/or earnings are tax-deferred until retirement. Unlike many
employer plans, money in the account is always accessible; however, until age 59
1/2 there is a 10 percent early distribution penalty unless you qualify for an
exemption due to one of the following: disability, qualifying education
expenses, unemployment, qualifying first-home purchases, death, or receipt of
your IRA assets in equal payments over your life expectancy.
Contribution Limits - Traditional and Roth
|
Year |
2005 - 2009 |
|
Regular |
$5,000
|
|
Catch-up* |
$1,000
|
*Only taxpayers age 50 and over are eligible to make catch-up contributions.
Coverdell Education Savings Accounts (Education IRAs) - Contribution
Limit $2,000.
For more information on a Traditional IRA please contact the Member Services
Department at the nearest branch office.
Click here
for branch office phone numbers.
To view current Share rates
click here or to view current IRA Certificate rates,
click here.
Roth IRA
Roth IRAs differ from Traditional IRAs in that the money you contribute to a
Roth IRA has already been taxed. So the principal amount is never subject to
taxes or penalties in the future, as long as you stay within the contribution
guidelines. This retirement plan allows the money you contribute to grow
tax-deferred.
If you do not withdraw any of the earnings until you have had the plan for at
least five years, or satisfy one of the qualifying events, those tax-deferred
earnings become tax-free. Unlike the Traditional IRA, there is no 70 1/2-age
limit on making contributions.
To view current Share rates
click here or to view current IRA Certificate rates,
click here.
IRA Share Certificates
IRA Type: Traditional and Roth
Restrictions:
- One annual withdrawal allowed after age 59 ½ without early withdrawal penalty
- Penalty for withdrawal from certificate prior to maturity as follows:
- 24 month term 60 days dividend
- 36 month term 90 days dividend
- 60 month term 90 days dividend
|
|
Tiers
|
|
Terms:
|
|
|
$5,000
|
|
24 month
|
|
|
$10,000
|
|
36 month
|
|
|
$25,000
|
|
60 month
|
|
|
$100,000
|
|
|
Interest: Paid at term (maturity)
Rates: Additional 25 basis points for roll over contributions from
other institutions. Upon maturity, the certificate will renew at the current offering
rates. The same guidelines in the Deposit Account Policy would apply to IRA Certificates.
To view current Share rates
click here
or to view current IRA Certificate rates,
click here.
Coverdell Education Savings Account
Coverdell Education Savings Account can be used to fund a child's education.
An educational IRA can be opened for any child under the age of 18. You may contribute
a maximum of $2,000 per year per child until the student's 18th birthday. The
child is the account beneficiary. Like the Roth IRA, contributions to the account
are not tax deductible but earnings accumulate tax-free. Withdrawals from educational
IRAs can be used to pay for tuition, books, supplies and room and board (for fulltime
students).
If a child does not attend college, the money must be withdrawn by the time he or
she turns 30. Those earnings are subject to income tax and the 10% penalty. The
Coverdell Education Savings Account can also be rolled over without penalty to another
member of the family.
To view current Share rates
click here
or to view current IRA Certificate rates,
click here.
* The Credit Union provides no legal advice to members, and provides
the foregoing information from a reliable resource to give our members a basic understanding
of these services. You should consult with your tax or legal adviser regarding any
particular and the current status of applicable federal and state laws.
