Individual Retirement Account (IRA)
Traditional IRA is a savings plan authorized by
the Federal Government, which allows you to accumulate funds to
help you prepare for a comfortable and secure retirement. The
tax-deferred funds can be withdrawn any time after age 59 ½ without
penalty. Withdrawals must begin by April 1st following the year in
which the participant reaches the age of 70 ½.
Because the IRS does not tax dividends earned on IRAs until
withdrawn, the investment grows faster through the effects of
tax-deferred compounding. Also, your IRA contributions may be
wholly or partially deductible, which means fewer taxes. (Please
refer to your professional tax advisor).
Traditional IRA investment options include IRA Share Account,
fixed rate IRA Share Certificate, and Flexible IRA Share
The Credit Union's Roth IRA allows
contributions to be taxed, but all withdrawals, including earnings,
are tax-free if the account has been open for five years and the
account holder is 59 ½ or older.
An Education IRA can be established to assist
in paying qualified higher education expenses. Contributions are
nondeductible, earnings are tax-deferred, and distributions are tax
free if used to pay the account beneficiary's tuition, fees, books,
supplies, equipment, room or board at an eligible college or
vocational school. Maximum annual contribution is $2000.
For more information on the Credit Union's IRAs, give us a
call at (818) 846-1710.