A Variety of IRAs Perfect For Making Your Retirement Dreams Come True

Saving for retirement has never been more important, and millions of Americans have learned that IRAs are one of the best savings tools available. Not to mention these personal savings opportunities may also get you a break on your taxes. Ascension Credit Union offers several account types to meet your savings needs.


Traditional IRA
This IRA is easy to maintain and offers members important tax advantages such as deductible contributions and tax-deferred earnings.

Who can contribute?

  • Anyone under age 70 ½ who has an earned income.

How much can I contribute?

  • $5,000 for individual; $10,000 for married couple for 2010
  • For owners age 50 and older, your limits increase to $6,000 for 2010
  • Cannot exceed compensation
  • Reduces the contributions that can be made to Roth IRA’s

What are the tax advantages?*

  • Earnings grow tax-deferred until withdrawn
  • Contributions may be tax-deductible
  • Distributions for a first-time home purchase or higher education expense may be penalty-free

*Not intended as tax advice. Please consult your tax advisor about all tax options

Can Traditional IRA assets be moved?

  • IRA holders can take comfort in the fact that their IRA assets are always available to them and can be moved under certain circumstances  and if:
    • withdrawn (distributed) and redeposited elsewhere (known as a rollover) within 60 days
    • moved to another organization (known as a trustee-to-trustee transfer)

Roth IRA
Earnings from a Roth IRA that are distributed in a qualified manner are not subject to federal income tax.

Who can contribute?

  • Anyone who has earned income (or who is filing jointly with a spouse who earns compensation), with the following MAGI (Modified Adjusted Gross Income from your federal tax form):
    • Up to $105,000 for single filers
    • Up to $167,000 for joint filers
  • Reduced contributions allowed for higher incomes:
    • Up to $120,000 for single filers
    • Up to $177,000 for joint filers

How much can I contribute?

  • $5,000 for individual; $10,000 for married couple for 2010
  • For owners age 50 and older, your limits increase to $6,000 for 2010
  • Cannot exceed compensation
  • Reduced contributions that can be made to traditional IRA?s

What are the tax advantages?*

  • Earnings can be tax and penalty free if account is open for five tax years and one of the following are met (reach  age 59 ½ , disability, death, or  first-time home expenses up to $10,000)
  • Not required to start withdrawals at age 70  

*Not intended as tax advice. Please consult your tax advisor about all tax options.

Can I move money from my Traditional IRA to my Roth IRA?

  • "Yes," but there are specific rules that govern the process of converting funds from a Traditional IRA to a Roth IRA. You should seek advice from a competent tax advisor to determine whether moving your funds is beneficial to you.

Coverdell Education IRA
Finance a beneficiary’s qualified education expenses with contributions to a Coverdell Education Account.

Who can contribute?

  • Anyone who has an earned income (or who is filing jointly with a spouse who earns compensation), with the following MAGI (Modified Adjusted Gross Income from your federal tax form):
    • Up to $95,000 for single filers
    • Up to $190,000 for joint filers
  • Reduced contributions allowed for higher incomes:
    • Up to $110,000 for single filers
    • Up to $220,000 for joint filers
  • Contributions NOT ALLOWED:
    • Once the beneficiary of the Education IRA reaches age 18
    • In any year that a contribution is made to a state tuition program for the same beneficiary

How much can I contribute?

  • $2,000 per child per year, until the child reaches age 18

Am I allowed to change the Beneficiary?

The responsible individual may change the designated beneficiary (child). An example of why someone may wish to change the beneficiary is the current beneficiary has completed their education and there are funds remaining. The only stipulation is that the new beneficiary must be an eligible member of the family.

What are the tax advantages?

  • Withdrawals may be made tax and penalty free for qualified expenses (tuition, fees, books, supplies, room & board)

*Not intended as tax advice. Please consult your tax advisor for all tax options

 

If you would like more information or have specific questions about your situation, stop by or give us a call and one of our qualified professionals can assist you! Also, you can consult your tax planner for more information.