A Regular IRA is a good way to save. If you're a wage earner and under 70, you can use an IRA even if you already have another qualified pension program. Pay no taxes on the money you earn until withdrawal. You may defer all, or part of your deposits from income taxes, too, depending on your participation in other qualified pension programs.

If you are not eligible to defer IRA deposits from current taxes, you can still build an IRA and benefit from the tax deferred earnings later (during retirement when you'll probably be in a lower tax bracket). Withdrawals can begin at age 59 1/2 and must begin by age 70 1/2. There are substantial penalties for early withdrawal. However, there are exceptions for death, disability, medical expenses, health care insurance, higher education expenses, or first–time home purchases.

Tax-Year 2006 and Beyond

Contribution limits increase each year through 2008 and are subject to cost-of-living adjustments (COLA) each year thereafter. In addition to a contribution limit increase, those IRA owners who have attained age 50 may contribute an additional amount, allowing them to "catch-up" on their retirement savings. The maximum allowable deposits are 100% of earned income or the amount listed in the chart below whichever is less. The following chart shows the contribution limits in effect for tax-years 2006 and beyond.

You can make a maximum deposit based on the chart above in aggregate, annual contributions to either a Regular IRA and/or a Roth IRA during a taxable year. A non-wage earning spouse can also make a full deposit based on the chart (Restrictions apply). Also if you have a regular IRA elsewhere, you can "roll-it-over" into the Credit Union, without penalty, providing you haven't moved the IRA in the last 12 months.

If you wish to convert funds from a Regular IRA to a Roth IRA you may do so without penalties, however, earnings are subject to taxation and your modified adjusted gross income must be under $100,000 for the year that you wish to convert. For rollovers to an IRA from other qualified, tax-deferred savings plans and/or annuity, contact the Credit Union for an IRA Application.

Roth IRAs are also offered by the Credit Union.