The Individual Retirement Account (IRA) is a long-term savings plan with special tax advantages. Advantage Credit Union offers the Traditional IRA, Roth IRA and the Education IRA.
Traditional IRA - This IRA allows a deductible contribution of up to $5,000 for those who qualify. The earnings are tax-deferred until time of withdrawal. The income thresholds, which qualify individual and joint filers for the tax deferral, will be increased and phased in over the next ten years.
Under the laws, penalty-free withdrawals are allowed for education and first-time home buyers.
Roth IRA - This IRA account allows up to $5,000 non-deductible contributions with all earnings being free of federal income tax if the money saved is on deposit for five years or more and used for a qualified purpose.
Qualified Distribution Reasons Include:
Distributions made for higher education
Purchase a first home (up to $10,000)
Age 59 ½