IRAs

An Individual Retirement Account makes a lot of sense when planning your retirement or your investment future.

Your Social Security benefits and pension are not intended to provide all of your retirement income. And planning ahead to pay for an education, or to buy a house, or any future goal is always wise.

Today's IRAs provide more tax benefits and greater earnings than in previous years. You can choose from taking advantage of yearly tax deductions now, or save your tax breaks for future withdrawals.

Your IRA deposits may be made in a lump sum or by regular deposits through payroll deduction or over the counter. You may also "roll over" lump sum payments you receive from a qualified retirement account; such payments may be due to retirement, job termination, or termination of the plan. You are eligible to roll all or part into an IRA in order to defer current taxes.

Traditional IRA

Choose A Traditional IRA for long term retirement planning.

You don't pay taxes now on these retirement accounts, when your income is high.

At retirement, you are able to take out your funds or roll them over into another option. Taxes paid then are considerably less, since your income will be less.

Here are some facts about Traditional IRAs:

• You must be under age 70-1/2 to be eligible for a traditional Nondeductible IRA.
  
  
• Non-working spouses can now make fully deductible contributions to an IRA, even if their spouse participates in a retirement program, as long as their joint income does not exceed $150,000.
  
  
• You may be able to withdraw money before age 59-1/2 without a penalty to purchase a first home (up to $10,000 maximum) or pay qualified costs of higher education.
  
  
• Dividends earned on an IRA are tax-deferred until you withdraw the funds, which become available when you reach age 59-1/2; you must begin to withdraw at age 70-1/2 or face an Internal Revenue excise tax penalty.
  
  
• Early withdrawal may incur a substantial dividend penalty.

2002 Tax Law IRA Provisions

Beginning in 2002, the new tax law increased the amount you can contribute to an Individual Retirement Account (IRA).

Traditional IRA tax-year contributions will increase from $2,000 for the single taxpayer limit to progressively higher limits according to this Internal Revenue Code 219(b)(5)(A),(C) schedule:

2002 - to $3,000 2005 - to $4,000 2008 - to $5,000 2009 - $500 Increments indexed to inflation

• Eligible married couples filing jointly can also take advantage of the increases.

Age 50+ Catch-Up Provision

Individuals who are age 50 and older before the end of the taxable year, and before application of the Adjusted Gross Income phase-out limits, can increase their IRA contribution by:
• $500 for 2002 through 2005
• $ 1,000 for 2006 and thereafter.

For more information about IRAs, speak to your financial advisor.

Contact your credit union to open your IRA today and start saving for tomorrow.

Current rates for IRAs are posted in this site.

IRA Share Certificates

Share Certificates are also available as IRA investments.

An IRA Share Certificate requires a $1,000 minimum investment and can be purchased for terms of 3, 6, 9, 12, 18, 24, 36, and 48 months. View current rates

Remember that early withdrawals do incur penalties.