IRAs (Individual Retirement Account)

An Individual Retirement Account (IRA) is a personal retirement savings plan available to anyone who receives taxable income during the year. IRSs bring together two benefits for you – compound interest and tax savings.

First you need to select an IRA type based on your age, income, and savings goals. Meadowland Credit Union offers two types of IRAs: Traditional, and Roth.

Look at the chart below to further understand the IRA types that we offer. Although MCU is not a licensed tax advisor we are here to answer any questions you may have about IRAs. You may decide that it is the best to consult with a tax advisor to see if an IRA works best with your finances.

IRA Type Comparison Chart

  Traditional IRA Roth IRA
Who can Contribute?

Anyone under the age of 70 ½ who has income from compensation (or who is filing jointly with a spouse who earns compensation)

Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following MAGI*: Up to $95,000 (single filers) and Up to $150,000 (joint filers)

Reduce contributions allowed for higher incomes (up to $110,000 for since filers and $160,000 for joint filers)

How much can I contribute?

$5,000

-$6,000 is age 50 or older

-Cannot exceed compensation

-Reduces contributions that can be made to Roth IRAs

$5,000

$6,000 if age 50 or older

Cannot exceed compensation

Reduces contributions that can be made to Traditional IRAs

Who can make deductible contributions?

Fully – deductible contributions:

Single individual not active in employer retirement plans (regardless of income)

Single individuals active in employer retirement plans with MAGI* of less than $34,000

Married couples with neither spouse active in an employer retirement plan (regardless of income)

Married individuals active in employer retirement plans with joint tax returns showing MAGI* of less than $54,000

Married individuals not active in employer retirement plans with spouses who are, as long as MAGI* is $150,000 or less

Individuals with incomes exceeding the above limits may be able to deduct an amount that is less than the maximum amount that can be contributed

No one can deduct contributions

What are the tax advantages?

Earning grow tax – deferred until withdrawn

Contributions may be tax-deductible

Regular contributions can be withdrawn tax and penalty-free at any time

After the account has been opened five tax years, earnings can be withdrawn tax and penalty-free for any of these reasons: age 59 ½, disability, death, or first-time home purchase**

When can I withdraw without restrictions?

Withdraw penalty – free for any of the following reasons:

Qualified higher

Education expenses

First-time home purchase**

Age 59 ½

Disability

Qualifying medical expenses exceeding 7.5% of adjustable gross income

Payment to beneficiaries upon the owner's death

Payment of health insurance premiums while employed for 12 weeks or longer

Earnings are tax-free if account is opened for five tax years and withdrawn for a qualified reason (age 59 ½, disability, death or a first-time home purchase**)

Not required to start withdrawals at age 70 ½



After deciding which IRA is best for you, you can then select an investment option. MCU offers two investment options for your IRA account: Share Certificate, and Share

IRA Investment Options

  IRA Share Certificate IRA Share
Rate Information

Choose any of our current Share Certificate rates and terms

This is a variable-rate account

Benefit

Earn a guaranteed return on your investment – simply choose your length of investment (term)

No minimum balance requirement, funds can be withdrawn at any time


*MAGI - Modified Adjustable Gross Income from the federal tax form
** Lifetime limit for exemption on first-time home purchase is $10,000