Where People Are Worth More Than Money
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? | You (or your spouse if filling a joint tax return) must earn compensation from employment. Starting with the 2020 tax year, you may make a contribution at any age. | You (or your spouse if filling a joint tax return) must earn compensation from employment. You earned compensation (or you and your spouse’s combined compensation if filing a joint tax return) must be less than or within the applicable IRS limits. |
| How much can I contribute? | $7,000 $8,000 age 50 or older Cannot exceed compensation Reduces contributions that can be made to Roth IRAs | $7,000 $8,000 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 individuals not active in employer retirement plans (regardless of income) Single individuals active in employer retirement plans with MAGI* of less than $77,000 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 $123,000 Married individuals not active in employer retirement plans with spouses who are, as long as MAGI* is $230,000 or less Individuals with incomes exceeding the above limits may be able to deduct an amount that is less than the maximum amount of 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 | Earning grow: tax deferred until withdrawn Contributions may be tax deductible May qualify for a tax credit of up to $1,000 | Contributions and earnings can grow tax free; and you can withdraw them tax-free and penalty free after you’ve owned the account for five years, age 59 ½ or older, disabled, a fist-time homebuyer, or a Roth IRA beneficiary |
| When can I withdraw without restrictions? | You can withdraw the money anytime, subject to income tax. An IRS penalty tax also may apply unless you are age 59 ½ or older. If you are age 73 or older, you must withdraw a required minimum amount each year to avoid penalty taxes. | You can withdraw the money from you Roth IRA anytime. Depending on when you take the money out and what types of Roth IRA assets (contributions, conversion or rollover amounts, or earnings) are included in the distribution, you may be subject to income tax and IRS penalty tax. But if you have a “qualified distribution” all assets are tax and penalty free. |
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
FAQ
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A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.
A frequently asked question surrounding your service
A detailed answer to provide information about your business, build trust with potential clients, and help convince the visitor that you are a good fit for them.