Individual Retirement Accounts (IRA's)
We offer both Traditional and Roth IRAs as regular savings accounts and CDs.
With an IRA, you can invest your money in a variety of
savings and investments such as CDs (share certificates), mutual funds, and
individual stocks and bonds.
You can have more than one IRA, even two accounts of the
same type. But the more you have, the more you have to manage, so experts
recommend keeping the number of accounts to a minimum. Rollovers also are
possible from one IRA into another.
Here's an IRA summary. For more information, talk with an
IRA specialist at our credit union.
Please note: PowerNet Credit Union does not provide tax
advice. The information on this page was taken from the
IRS website, and is not a
substitute for the advice of an attorney or tax professional.
- Offers tax-deferred earnings and possibly tax- deductible
contributions if you meet the requirements. If you and/or your spouse
actively participate in an employer-sponsored retirement plan, you can deduct contributions only if your income is below
certain limits. If you're not participating in a retirement plan, your
traditional IRA contribution is deductible regardless of income. Ask your
credit union IRA representative for details.
- You can contribute if you have taxable compensation and you will not reach age
70 1/2, by the end of the year.
If you file a joint tax return, you can treat your spouse's income as your
You can contribute to a traditional IRA, an
employer-sponsored retirement plan, and a Roth IRA in the same year.
When you withdraw from a traditional IRA, your withdrawal will be treated as taxable income.
If you make a withdrawal before age 59 1/2 you generally
must pay a 10% tax on early distributions. There are exceptions, such as
rollovers, so ask your credit union IRA representative for more details
You must begin taking required minimum distributions at
age 70 1/2.
- Contributions are not tax-deductible, however, you can withdraw contributions and earnings from a Roth
- To contribute to a Roth IRA, generally you must have
taxable compensation and a modified adjusted gross income below the IRS
limit for that tax year. The IRS limit may be adjusted annually for
You can withdraw funds tax-free before retirement under certain conditions: if your funds have been in
your account for at least five years, you're older than age 59 1/2, you buy a
first-time home, or if you become disabled or die.
You're not required to start taking minimum distributions
when you reach age 70 1/2 as with a traditional IRA. You can let your money
continue to grow tax-free for as long as you like.
New IRA contribution limits
- Up from $5,000 a year in 2012, to $5,500 a year in
2013. The limit may be adjusted annually for inflation in $500 increments
- Those age 50 and older have a catch-up deal; they can
contribute an extra $1000 a year above the general contribution limit.
Need help with financial planning – call us
today to see how we can assist you.