Individual Retirement Accounts (IRA)
We offer NO-fee IRAs; Traditional, Roth and Coverdell Education Savings Accounts. You can save for retirement within an IRA share savings, or earn a higher dividend with a 3 mo / 6 mo / 12 mo / 18 mo / 24 mo / 36 mo certificate. NCUA insures each member's IRA up to $250,00. This insurance is separate from the $100,000 each member receives for regular savings.
Traditional IRA funds can be withdrawn after age 59 ½ without a penalty. By age 70 ½ you are required to make yearly withdrawals. One of the advantages of this type of IRA is the contributions you make maybe tax deductible. Principal and interest earned are tax deferred until the funds are withdrawn.
Roth IRA contributions are not tax deductible but withdrawals are completely tax free if the account holder has had a Roth account for more than five years and is age 59 ½. Contributions can still be made after age 70 ½ and no withdrawals are required during the account holder’s life.
General Information
There are some IRS exceptions for early withdrawal penalties for both types of IRAs such as: the holder becomes permanently disabled, first time home purchase and higher education expenses. The 2007 maximum contribution is $4,000. If you are age 50 or older, you can also make an additional $1,000 contibution. We would be happy to send you more information, just give us a call.
Coverdell Educational Savings gives flexibility to families saving for college tuition and other school expenses. Up to $2,000 per year (starting in 2002) may be deposited for each child under age 18. Anyone can make a contribution – parents, grandparents, relatives, friends. These contributions are not tax deductible, but dividends earned are tax free. If the funds not used for one child, they may be transferred to another child within the family.
