You can use a Roth IRA, too, even if you already have another qualified pension program, including a Regular IRA. Make qualified tax-free withdrawals after age 59 and after a 5-year holding period. That includes all earnings on the Roth IRA dividends earned are normally tax-free! Anyone with earned income can contribute, even those over 70.

And there are no requirements that withdrawals begin at age 70. So, a Roth IRA is a good way for seniors to save and accumulate tax-free earnings. If necessary, you can withdraw earnings early, without penalty, for a number of reasons including death, disability, medical expenses, or first-time home purchase.

You can get your principal contributions made to a Roth IRA, anytime, for any reason, without IRS penalty (possibly excluding amounts converted or rolled-over).

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. Roth IRA owners are subject to MAGI (modified adjusted gross income) limits when determining eligibility. A single filer is eligible to make a contribution if his MAGI is $95,000 or less, and only a partial contribution if his MAGI is between $95,000 and $110,000. A single filer with a MAGI of $110,000 or more is not eligible to make Roth IRA contributions. Married individuals filing jointly are each eligible to make a full contribution if their MAGI is $150,000 or less and only a partial contribution if their MAGI is between $150,000 and $160,000. Married individuals with MAGIs of $160,000 or more are not eligible to make Roth contributions. 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 an 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.

It's Easier to Build Your IRA at the Credit Union

Via Payroll Deduction or Direct Deposit, you can have part of every paycheck transferred automatically into any IRA. With systematic Deposits your IRAs can't help but grow.

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