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? | 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? | $6,500 -$7,500 is age 50 or older -Cannot exceed compensation -Reduces contributions that can be made to Roth IRAs | $6,500 $7,500 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 | Earning grow tax – deferred until withdrawn Contributions may be tax-deductible | Regular contributions can be withdrawn tax and penalty-free at any time After the account has been opened five tax years, earnings can be withdrawn tax and penalty-free for any of these reasons: age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 73 |
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.