-
Traditional IRA
In some cases, this IRA allows you to deduct contributions from
your taxes. Earnings are tax-deferred until you begin making
withdrawals, after age 59 ½. Then all your withdrawals (principal
and earnings) are taxed at the rate dictated by your income at that
time.
Wage-earning individuals may contribute $4,000 (or $5,000 if over
age 50) or 100% of their
gross income annually, whichever is less. A maximum contribution of
$4,000 may also be made annually by each wage earner for a
non-working spouse.
-
Roth IRA
You can contribute up to $4,000 (or $5,000 if over age 50) per year to this IRA, depending
on your income. Contributions are not tax-deductible, but
withdrawals of earnings and principal are tax-free once you have
held the account five years and reach 59 ½ years of age. You can
continue making contributions no matter how old you are, and you are
not forced to begin making withdrawals once you reach age 70 ½. A
maximum contribution of $4,000 may also be made annually by each
wage earner for a non-working spouse.
-
Coverdell IRA (Education)
These accounts can be set up in your name with the name of a
beneficiary (such as your grandchild) so that the child may use the
money for his or her education. You can’t deduct your
contributions, but there are no taxes due when the contributions are
withdrawn. You may invest up to $2,000 a year per child (less than age
18). Contribution limits are based on your income.
|
Which IRA Is Right for You?
In a traditional IRA, with "before-tax" dollars, your deductible contributions and earnings are tax-deferred until you make withdrawals. In a Roth IRA or non-deductible traditional IRA, your contributions are made with "after-tax" dollars. Earnings on non-deductible contributions to your traditional IRA are tax-deferred until you make withdrawals. In a Roth IRA, qualified withdrawals, including your earnings, are tax-free.
If you're planning to change jobs or retire-instead of taking a lump-sum payment, subject to federal income taxes and a possible 10% penalty-you should consider rolling your employer retirement plan into an IRA.
For more details on the new IRA rules and how you can plan for a more rewarding retirement, call us or a MEMBERS Financial Services Representative at 1-800-503-7788 or visit
the MEMBERS
Financial Network website .
Representatives are registered through, and securities are sold through, CUNA Brokerage Services, Inc. (CBSI), member NASD/SIPC, 2000 Heritage Way, Waverly, Iowa 50677. Insurance sold through licensed CUNA Mutual Life Insurance Company Representatives, and in New York, licensed insurance representatives of other companies. Nondeposit investment products are not federally insured, involve investment risk and may lose value, are not obligations of or guaranteed by the credit union.
Other Retirement Planning Options
Market Index Certificates
Looking for alternatives to fixed-rate certificates of deposit?
While stocks and mutual funds sometimes offer higher returns, not
everyone is comfortable with that level of risk. With our Market
Index Certificate, you get the best of both worlds: the safety and
security of an insured credit union share certificate, and the
potentially high returns of today’s dynamic stock market. These
certificates can also be purchased for your IRA at Minnesota Valley
Federal Credit Union. |
