Traditional IRA Accounts were created by Congress in 1974 to encourage individuals to save for their retirement.  By establishing an IRA you take a giant step toward saving taxes and building a more secure future for your retirement.  The earnings and or investment gain accumulate tax-deferred until distributed.  This means you pay no federal income tax on your IRA earnings adn or investment gain until you withdraw your funds.

 

There are no maximum income limits for eligibility to contribute to a traditional IRA.  An individual has up to his federal tax-filing deadline, not including extensions to make a contribution for the prior tax year.

 

IRA's must be established and titled in the individual's name only.  If a member has a joint account at the credit union, only the account owner may have an IRA on that account.  IF the joint owner wished to open an IRA, a seperate account number must be issued. 

 

Funds in an IRA are meant to be used for the IRA owner's retirement or for the benefit of his beneficiaries, therefore the IRS imposes penalties to discourage taking the money out before age 59 1/2.

There are some exceptions to the early withdrawal penalty. 

 

Traditional IRA owners must begin taking required minimum distributions each year once they reach age 70 1/2.   Distributions from traditional IRA's are subject to federal income tax withholding of 10%, unless a member requests another amount in writing.

 

Contact any Credit Union office to get more information and instructions on how you can get an IRA set up on your account.