Retirement Accounts

IRA Your Way To A Secure Retirement

Social Security and pension plans no longer can be relied on to provide all of the income you’ll need to retire. That’s why an Individual Retirement Account is so important. If you don’t have an IRA, you should open one.

Depending on which account you open, you can enjoy either tax free distributions when you retire or you can take advantage of yearly tax deductions, plus defer taxes on the interest your IRA account accumulates. If you open your account before the April 15th tax filing deadline, you can still enjoy the benefits for the previous tax year. Choice One offers two types of IRAs to help you put money aside for your retirement, and an education account.

You can contribute 100% of your earned income to either a traditional IRA, a Roth IRA or both types of IRAs, up to the annual contribution limit. The limit for the 2012 tax year is $5,000 or $6,000 if you are 50 years of age or older. The additional $1,000 for tax payers age 50 years or older, is called the “catch up” provision. It was instituted to help older taxpayers increase their retirement savings.

Traditional IRA

With a traditional IRA, your contributions may be tax-deductible and you can grow your savings tax-deferred until you retire. When you do retire, the contributions you take are taxed based on your current income level.

  • You must be under age 70 ½ to be eligible for a Traditional IRA.
  • Non-working spouses can 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 can contribute up to $5,000 each year or $6,000 if you are age 50 or older.
  • Before age 59 ½, you may be able to withdraw money without a penalty to purchase a first home (up to $10,000 maximum) or pay qualified costs of a higher education.
  • You can’t make contributions after the age of 70 ½.

Roth IRA

The major advantages of a Roth IRA is that you pay taxes on your yearly contributions, but your account earnings and future withdrawals are tax free, plus you can continue to make contributions after age 70 ½ if you are employed.

  • Penalty free withdrawals after 5 years
  • Tax free earnings after age 59 ½
  • Contributions allowed after age 70 ½ when employed
  • No required distribution at age 70 ½ or in your lifetime
  • Tax-free if used for first home purchase (up to $10,000) or education
  • Tax-free if disabled or upon death

Coverdell Educational Account

Contributions can be made to a Coverdell Educational Account until December 31st of the tax year. Parents, grandparents, other relatives, friends, and even minors (with earned income) can set up an account for a designated beneficiary under age 18. You can make nondeductible contributions of up to $2,000 per child each tax year. The accumulation of interest and withdrawals are tax-free as long as the funds are used for financing education expenses.

If the beneficiary is not going to use the money for educational expenses, the money must be withdrawn by age 30. The Coverdell Education Account can be rolled over into another child’s account in the same family. The contributions to this account do not count toward your taxpayer Traditional or Roth IRA contributions.

Start Saving Today…

For each IRA, there are income caps and other limitations that apply. Don’t miss this opportunity to IRA your way to a secure retirement and help pay for an education. For more information, contact the credit union or your tax advisor.

All credit union deposit accounts, including retirement accounts are insured by the NCUSIF* for up to $250,000. There are also steps you can take to have higher account balances that are also insured. We can show you how. Call or stop by the credit union.

Money Market Accounts

APR*APY*Info and/or Terms
0.15%0.15%-Minimum Balance of $2,000.00 to $19,999.99
-Each Withdrawal must be at least $500.00
-Maximum of 6 withdrawals per month
-$100.00 required in primary savings account
0.15%0.15%-Minimum Balance of $20,000.00 to $49,999.99
-Each Withdrawal must be at least $500.00
-Maximum of 6 withdrawals per month
-$100.00 required in primary savings account
0.20%0.20%-Minimum Balance of $50,000.00 to $99,999.99
-Each Withdrawal must be at least $500.00
-Maximum of 6 withdrawals per month
-$100.00 required in primary savings account
0.25%0.25%-Minimum Balance of $100,000.00 up
-Each Withdrawal must be at least $500.00
-Maximum of 6 withdrawals per month
-$100.00 required in primary savings account

* The NCUSIF is the National Credit Union Share Insurance Fund. It is a federally insured program governed by the NCUA (National Credit Union Administration).

 

 

 

 

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