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Start Saving for the Future

It's never too early to start planning for a financially secure future. With a tax-deferred* Individual Retirement Account (IRA) account, you can enjoy IRA benefits immediately after your retirement. Your money earns today's high dividend rates without increasing your current tax obligation.

IRA Accumulator Account
Offers a variable rate with dividends compounded quarterly. You may use Payroll Deduction for automatic savings. You decide how much or how little you want to save.

IRA Certificate Series Account
Choose your investment from a variety of certificates with minimum balances beginning at $500. Dividend rates are guaranteed until maturity and depend on the term you select.

Roth IRA
Open a new Roth IRA and enjoy expanded after-tax investment opportunities, such as saving for your first home or for a comfortable retirement.

Coverdell ESA
Set aside money with the new Coverdell ESA and watch your money grow tax-free* for your children 17 years or younger. When you are ready to spend it for college, it's still tax-free.

Requirements

  • Traditional IRAs:
    • Earned income and younger than 70½ years.
    • Those who do not participate in a pension plan at work or who do participate and meet certain income guidelines are eligible to make deductible contributions.
  • Roth IRAs:
    • Adjusted Gross Income limits are $110,000 (single) and $160,000 (joint). Contribution amounts phase out between Adjusted Gross Income of $95,000-$110,000 (single), $150,000-$160,000 (joint).
  • Coverdell ESAs:
    • Adjusted Gross Income limits are $110,000 (single) and $190,000 (joint). Contribution amounts phase out between Adjusted Gross Income of $95,000-$110,000 (single), $190,000-$220,000 (joint).
    • Beneficiaries ages 17 or under

Benefits
  • Saves money—no annual management fees or commission charges
  • Safe—insured to $250,000 by NCUA. This is in addition to $100,000 on all other combined XFCU savings accounts.

Features

CONTRIBUTION DEADLINES

  • Traditional IRAs, Roth IRAs and Coverdell ESAs:
    • Deadline for prior year's contributions is the same as the deadline for filing a tax return (normally April 15).
  • Coverdell ESAs:
    • Deadline for contributions is December 31 for each year.

CONTRIBUTION RESTRICTIONS
  • Traditional, Roth IRAs:
    • In 2002 through 2004, you can contribute up to $3,000 a year, $4,000 in 2005 through 2007, and $5,000 in 2008. The limit will be adjusted annually for inflation in $500 increments starting in 2009.
    • Those age 50 and older have a catch-up deal; they can contribute an extra $500 a year from 2002 through 2005 and an extra $1,000 a year starting in 2006 and thereafter.
    • These limits cover both IRA options. For example, for a $3,000 limit, you can put $2,000 in a Roth IRA and $1,000 in a traditional IRA, or $3,000 in one or the other, but not in both.
  • Coverdell ESAs:
    • Up to $2,000 per beneficiary (child) per year.

WITHDRAWAL REQUIREMENTS/PENALTIES
  • Traditional IRAs:
    • No penalty at age 59½ or if member becomes disabled.
    • 10% IRS penalty for early withdrawals.* Some exceptions apply.
  • Roth IRAs:
    • At age 59½, earnings may be withdrawn tax-free if the funds have been in the account for at least 5 years.
    • Prior to age 59½, original contributions may be withdrawn without tax penalty or income tax.
    • Qualified "Special Purpose" distributions (of contributions and earnings) are allowed before age 59½ without tax penalty for qualified higher education expenses and for up to $10,000 towards a first time home purchase
  • Coverdell ESAs:
    • May only be withdrawn by the beneficiary for qualified education expenses.

    MANDATORY DISTRIBUTION
  • Traditional IRAs:
    • Mandatory minimum distribution at age 70½. Distributions can be made in a lump sum, monthly, quarterly, semi-annually, or annually.
  • Roth IRAs:
    • No mandatory minimum distribution
  • Coverdell ESAs:
    • All funds must be withdrawn by the time the beneficiary turns 30 years old.
    • Remaining funds not used for qualified education expenses and not rolled over into another Coverdell ESA will be distributed to the beneficiary and subject to normal income taxes and 10% tax penalty.*

    Truth-In-Savings Disclosure

    * Please consult with your tax advisor for advice before opening any investment account.

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