Choose the IRA that meets your needs
Relax and watch your money grow, when you're tucking it away in an Individual Retirement Account. Our Traditional, Roth or Coverdell Education Savings Account IRAs can meet your future financial needs.
Follow these general rules of thumb in chosing the right IRA*:
- Choose a Roth IRA if you don't need the tax break right now. It's a more flexible investment because:
a. You can withdraw regular contributions at any time, tax-free and penalty-free.
b. You do not have to take mandatory distributions at age 70 1/2.
c. Earnings are tax-free if account is open 5 yrs and withdrawn for a qualifed reason.
- Choose a traditional IRA if you want the tax deduction right now. It also makes sense if you anticipate paying taxes at a significantly lower rate in retirement.
Coverdell ESAs offer tax-free distributions for certain qualified education expenses and unlike section 529 plans, can be used for elementary and high school expenses at most public, private and parochial schools.
IRA Contribution Schedule
Rules for IRAs changed at the beginning of 2002. You can now contribute more to your IRA than you have been able to do in the past. And over the next few years you will be able to contribute even more.
- 2004 - Individuals can contribute $3,000.00
- 2005-2007 - Individuals can contribute $4,000.00
- 2008 and after - Individuals can contribute $5,000.00
- 2011 - indexed for inflation
If the individual is 50 or older they can contribute an additional $1,000 "catch up contribution".
Please keep in mind that the contribution level is reduced by an amount contributed to a ROTH IRA.
Diamond Valley Federal Credit Union also has IRA Certificates for periods of one to five years.
IRAs are insured seperately from other deposits through the National Credit Union Share Insurance Fund (NCUSIF) up to $250,000.00.
*Not intended as tax advice. Please consult a tax professional.
For more information on IRA changes or to open an IRA at Diamond Valley Federal Credit Union, email DVFCU or call 425-5152.
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