IRAs IRA Options Individual Retirement Accounts An Individual Retirement Account (IRA) is a deposit account that provides security for the future and serves to compliment a fixed income after retirement. We offer both a savings and a certificate investment IRA options Dividends compound and pay monthly The account can be opened with a minimum deposit of $10. Heartland Credit Union offers both Traditional and Roth IRS plans. Consult a tax advisor to help you decide which type of IRA suits your needs. The following chart compares the two types of IRAs available and will help you understand the differences between the two options. Question Traditional Roth Who can contribute? Anyone under the age of 70 ½ who has earned income Anyone (at any age) who meets both of the following requirements: 1) Has earned income. 2) MAGI* does not exceed the IRS limits. How much can I contribute? There is a $6,000 Maximum annual Contribution limit, which is total of Traditional and Roth combined. An additional $1,000 "catch-up contribution" can be made in the year an IRA owner attains age 50. - Contributions cannot exceed your compensation. There is a $6,000 Maximum annual Contribution limit, which is total of Traditional and Roth combined. An additional $1,000 "catch-up contribution" can be made in the year an IRA owner attains age 50. - Contributions cannot exceed your compensation. - Your MAGI* Affects maximum contribution Are contributions tax-deductible? Active participation in employer-sponsored retirement plans, your marital and tax-filing status, and your MAGI determinewhether you can deduct your IRA contribution. For example, if you and your spouse are not active participants, you may deduct your contribution, no matter how high your income.If you or your spouse is an active participant, the deductionis dependent on your MAGI and income filing status. As yourMAGI increase, your deduction decreases. Your tax professionalcan help you determine whether your contribution is deductible.Even if you cannot deduct your contribution, you can still makenondeductible contributions and take advantage of the tax deferredearnings. Roth IRA contributions are not tax deductible. What are the tax advantages? - Earnings grow tax-deferred until withdrawn - Contributions may be tax-deductible Earnings are tax-free if account is open for five years and withdrawn for a qualified reason (age 59 ½, disability,death, or a first-time home purchase up to $10,000.) Are there required distributions? Yes, beginning at age 70 1/2 No When can I withdraw without restrictions? Withdraw penalty-free for any of the following reasons: Age 59 ½ Death Disability IRS Levy Substantially equal periodic payments Qualifying medical expenses health insurance premiums following unemployment First-time Homebuyers expenses (up to $10,000) Higher education expenses Qualified reservist distribution Regular contributions can be withdrawntax-free and penalty-free at any time.After the account has been open five taxyears, earnings can be withdrawn tax-freeand penalty–free for any of the followingreasons: Age 59 ½ Disability Death First-Time Home Purchase up to $10,000 *MAGI - Modified Adjusted Gross Income from the federal tax form Heartland Credit Union IRAS are Federally insured by the National Credit Union Administration (NCUA) and privately insured by Excess Share Insurance Corporation (ESI). This is in addition to the federal insurance on your other Heartland Credit Union accounts. Not intended as tax advice. Please consult a tax professional. How to Calculate Your Retirement Needs