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IRAs

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Please note: As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Traditional IRA Required Mandatory Distributions (RMDs) can be waived in 2020. If you normally receive an RMD and would like to waive it this year, please contact us so that we can arrange this.


Prepare for the Future with Flexible Investment Options

It’s never too early or too late to plan for your retirement. No matter when you start, Individual Retirement Accounts (IRAs) can be the perfect place to grow your money to ensure you reach a more secure and comfortable retirement. A smart, simple investment. Choose the IRA that is right for you:

Traditional IRA
Consider a Traditional IRA if you’re looking to stay in the same or lower tax bracket. There are no age restrictions or income limitations to open a Traditional IRA. Contributions made may be tax deductible – please consult a tax advisor.

Contributions

  • Total contributions for any tax year cannot exceed your earned income.
    • If you are under the age of 50, the maximum annual contribution is $6000.
    • If you are 50 and older, the maximum annual contribution is $7000. This is called a “catch up”.
  • Contributions can be made as long as you have an earned income, regardless of your age.
  • Contributions can only be made by you or your qualifying spouse.
    • A spouse can make deposits for the non-working spouse.

Withdrawals

  • IRA assets can be withdrawn at any time. Generally, federal/state income tax withholding applies to the taxable part of the withdrawal.
  • Earnings will grow, tax-deferred, until withdrawn.
  • Normal distributions may begin at the age of 59½, but Required Minimum Distributions (RMDs) must begin the year you turn 72.

Traditional IRAs: Answers to your questions (pdf)
Roth IRA vs. Traditional IRA: Answers to your questions (pdf)

 

Roth IRA
Consider a Roth IRA if you are looking to be in a higher tax bracket. There are no contribution age restrictions or Required Minimum Distributions (RMDs). Eligibility to contribute is based on adjusted gross income qualifications. Annual contributions are not tax deductible.

Contributions

  • Total contributions for any tax year cannot exceed your earned income.
    • If you are under the age of 50, the maximum annual contribution is $6000.
    • If you are 50 and older, the maximum annual contribution is $7000. This is called a “catch up”.
  • Contributions can be made as long as you have an earned income, regardless of your age.
  • Contributions can only be made by you or your qualifying spouse.
    • A spouse can make deposits for the non-working spouse.

Withdrawals

  • Withdrawals are tax-free. Dividends/interest are tax and penalty free if the member is over 59½ and has had the IRA open for at least 5 years.
  • Unlike the Traditional IRA, mandatory distributions are not required at age 72.

Roth IRAs: Answers to your questions (pdf)
Roth IRA vs. Traditional IRA: Answers to your questions (pdf)


IRAs are insured up to $250,000 by the National Credit Union Administration (NCUA), a U.S. Government Agency.