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: Traditional IRA :

Traditional IRA

The Traditional IRA provides a convenient saving vehicle for retirement. Any member between the ages of 18 and 70 1/2 with earned income, or a non-working spouse of anyone between ages 18 and 70 1/2 is eligible to invest in a Traditional IRA. Withdraw money at retirement and pay no income taxes on earnings if you take qualified distributions. Traditional IRA contributions may be fully or partly deductible, depending on your income level and whether or not you are considered an "active participant" in an employer sponsored plan. If you are an "active participant", deductibility is available on a sliding scale. If the contributions are deductible, the contributions and earnings will be taxable when withdrawn (after age 59½) when your tax rate will probably be lower. Maximum annual contributions increases gradually over the next several years; for tax year 2009 the masimum annual contribution is $5000, and taxpayers over 50 will be permitted to make "catch up" payments of $500.

Withdrawals before age 59½ may be made without penalty for the following reasons:

  1. Qualified higher education expenses, (tuition, books, room and board, etc.) for the individual, spouse, child or grandchild.
  2. Up to $10,000 may be withdrawn for first time home purchases.

These withdrawals would be subject to ordinary income taxes and may also be subject to normal early withdrawal penalties. You must begin to take withdrawals by age 70½.*

Other Traditional IRA Benefits include:

  • Minimum deposit of $10
  • Dividends compound monthly
  • No required contribution
  • Add to your IRA through automatic payment deposits
  • Roll-over existing retirement funds to your IRA
  • NCUA Share insurance up to $250,000 for IRA accounts
  • Customize withdrawals beginning at minimum age of 59 1/2
  • Click here to find out what your can earn for a given period of time at a given interest rate.
  • Click here to check rates.

 

*The Worker, Retiree and Employer Act of 2008 waives the required minimum distributions for 2009 (the mandatory withdrawals for those 701/2 are not required for 2009.)


Consult your tax advisor to determine the best IRA for your individual needs. For more information on IRA products drop by any branch and visit with a Member Service representative, call the credit union at (907) 459-5900, or send an email to info@spiritofak.com.