IRA Share Accounts

Two IRA Plans

The Credit Union offers two IRA savings plans: the “working” or IRA “Savings” Plan, and the IRA Certificate Plan. While you are working, yearly contributions are made to the working IRA. Once you retire, IRA funds are transferred to the IRA Certificate Plan. Both plans pay higher than average rates and offer great flexibility as individual needs change.

Federally Insured

NCUA $250,000 Insurance Logo Please note that the NCUA has raised the federal insurance coverage on IRA accounts from $100,000 to $250,000 effective April 1, 2006. IRA funds you have on deposit in your name are now insured to this higher amount thereby allowing you to maintain a higher balance at this Credit Union. This coverage is in addition to non-IRA funds which are insured separately up to $250,000.

The “Working” IRA Savings Plan

This plan allows the member to save up to the Maximum Contribution Limit while still working. By making deposits anytime, between January 1 of this year through April 15 of the next year (a 15 1/2-month time period), the member can save for retirement, subject to the limitations set by the Internal Revenue Service.

The Maximum Yearly Contribution Limit is as follows:

Tax Year of Deposit Under the Age of 50 50 or Older
2008 $5,000 $6,000
2009 $5,000 $6,000
2010 $5,000 $6,000
2011 $5,000 $6,000
2012 $5,000 $6,000
2013 $5,500 $6,500
2014 $5,500 $6,500
2015 $5,500 $6,500
2016 $5,500 $6,500
2017 $5,500 $6,500

We require a minimum balance of $50.00 at all times. There are no other fees or charges.

Each year, in May, you will receive an IRS form 5498 showing the balance in your IRA and the total of deposits made during that 15 1/2-month contribution period).

Withdrawals from the IRA Savings plan are subject to an IRS penalty of 10%. Such a penalty must be paid directly to the IRS unless the member qualifies for an exemption (i.e. a “hardship” withdrawal, etc.). The Credit Union will send IRS form 1099R in January disclosing the total amount of the withdrawal(s). No other penalty will be assessed by the Credit Union.

Although the IRS allows you to deduct an IRA contribution, please note that, based on total salary, the actual deduction allowed for your IRA contribution on your tax returns may be limited. Factors, such as: whether or not your employer sponsors a retirement plan, and what your filing status is (single, married, etc.), can deminish the deduction total.

The IRA Certificate Plan

This plan is designed for the retired member that transfers funds from a retirement plan to the Credit Union, or a member who retires and wants to transfer the “working” IRA plan to the IRA Certificate Plan.

Funds are usually placed in a 3-year certificate which usually earns a higher rate that being paid on a like-term Share Savings Certificate. Also, the IRA investor has an extra option of changing the dividend rate up to twice in a calendar year without having to withdraw the funds or incurring a penalty. This keeps the investor from being “stuck” in a low rate during periods of rising rates.

Required Minimum Distribution

A member reaching age 59 1/2 years of age can begin withdrawing from an IRA without being subject to the 10% IRS penalty. At age 70 1/2, the member must begin withdrawing IRA funds - formally termed the “Required Minimum Distribution (RMD).” NOTE: during the year 2009 (only), the RMD was waived per Presidential order dated December 2008. The Credit Union uses the IRS Single Life - Ordinary Life Annuities table and the IRS Joint Life - Ordinary Joint Life and Last Survivor Annuities tables to compute the minimum withdrawal amount.

There are several IRA forms that must be signed when opening an IRA Certificate and/or an IRA account. Please check with the Credit Union when you decide to establish an IRA account.