An Individual Retirement Account (IRA) is a special tax deferred high interest savings program through which a member may save a maximum of $2,000 per year (the maximum deferred amount for federal has increased to $3,000 per year, however, California's maximum deferred amount remains at $2,000 per year) for retirement. Qualifying members receive the benefit of deducting their IRA contributions from their taxable income or deferring tax payments on the interest earned on their deposits until the IRA funds are withdrawn (check with your tax advisor to determine if you are eligible for this deduction).
There are three types of IRAs available, the Roth IRA, the Education IRA and the Traditional IRA. Each has unique characteristics and specific eligibility requirements. Find out what rates we offer for IRA Share and Certificate Accounts. For a more detailed review of these accounts, please stop by the credit union or call (909) 983-1959.
Roth IRA
The Roth IRA is a nondeductible account that features tax-free, penalty free withdrawals after age 59 ½ (if the account has been established for at least five years.) The Roth IRA also allows for penalty free distributions to pay certain medical expenses, medical insurance premiums or to pay higher education expenses. Both Share and Certificate Accounts are available.
- Roth IRA Share Account Minimum Deposit $5
- Roth IRA Certificate Account Minimum Deposit $500
- Contribution Deadline April 15 of each tax year
Education IRA
The Education IRA is the only nondeductible account that features tax-free, penalty free withdrawals for a child’s higher education expenses. Both share and certificate accounts are available.
- Education IRA Share Account Minimum Deposit $5
- Education IRA Certificate Account Minimum Deposit $500
- Contribution Deadline December 31 of each year
Traditional IRA
The Traditional IRA features potential tax deductible contributions (based on income and retirement plan participation) and penalty free distributions for specific reasons (i.e., medical expenses, health insurance premiums). Three major changes in 1997 were: Penalty free distributions for first time home purchase, higher education expenses and increased income limits for deductibility of contributions. Both share and certificate accounts are available.
- Traditional IRA Share Account minimum deposit $5
- Traditional IRA Certificate Account minimum deposit $500
- Contribution Deadline April 15 of each tax year