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IRA

With retirement costs increasing it makes sense to plan ahead. One smart way to save for retirement is with IRA accounts. GECU offers both Roth and Traditional IRAs. If saving for future education costs for a child or grandchild is your priority, GECU also offers Coverdell Education Savings Accounts (ESAs).

What is the difference between Roth & Traditional IRAs?

 

Traditional IRA

Roth IRA

Eligibility

Must have earned income and not have reached age 70 1/2 by the end of the year.

Must have earned income. There are no age restrictions.

Tax Status of Earnings

Tax-deferred until withdrawal

Earnings grow tax-free

Tax Deduction

Contributions up to the limit are fully tax deductible if you are not an active participant in a retirement plan. Otherwise phaseout rules apply.

No.

Penalties for Early Withdrawal

None if:

  • Over 59 1/2

  • Death or disability

  • Qualified medical expenses

  • Certain health insurance

  • Qualified college expenses

  • First time home buyer (up to $10,000)

  • Due to IRS levy

  • Periodic payments

None if made after five years of establishing your IRA plan and:

  • Over 59 1/2

  • Death or disability

  • Qualified medical expenses

  • Certain health insurance

  • Qualified college expenses

  • First time home buyer (up to $10,000)

  • Due to IRS levy

  • Periodic payments

Required Distributions

Must begin by April following year participant turns 70 1/2.

Upon the death of the owner.

GECU offers IRA Savings and IRA Certificates.

IRA Savings accounts can be contributed to over the year or in one lump sum, up to your annual contribution limit.

IRA Certificates can be opened with a minimum balance of $500. IRA Certificates are offered in the same rates and terms as regular CDs.

For advice on retirement planning and getting the full benefit of tax savings with an IRA, please consult your tax advisor.

The National Credit Union Administration (NCUA) insures certain retirement account deposits at NCUA member credit unions. These retirement accounts include IRA accounts, Keogh plan accounts, 457 plan accounts and certain other self-directed accounts. The NCUA adds together all retirement accounts owned by the same person at the same insured credit union and insures the total up to $250,000. Look for the NCUA sign where deposits are received.