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INDIVIDUAL RETIREMENT ACCOUNTS
The Carolina Federal Credit Union IRA Savings Account is a dividend-bearing savings account that provides members with a stable and conservative tax-advantaged investment as part of their comprehensive retirement savings plan.
In addition to the many positives an IRA investment may generally provide, the Carolina Federal Credit Union IRA offers these specific features:
- No minimum deposit
- Excellent monthly dividends (dividends generally exceed interest rates for funds tied up in term accounts at other financial institutions)
- No enrollment fee
- No annual fee
- No withdrawal fee (our IRA is invested in a savings account and is not tied to a term)
- IRA funds are invested at the credit union
- IRA account deposits are separately insured up to $100,000 by the National Credit Union Administration
- No termination fee
- Payroll deductions (makes your retirement savings convenient)
- Credit union assistance with direct rollovers from a company’s qualified retirement plan(s)
- Credit Union assistance with direct transfers from other IRAs
Recent IRA legislation created a range of new options, updating the Traditional IRA and introducing the Roth and Education IRAs:
- Traditional IRA - Your earnings grow tax-deferred until they are withdrawn and if you meet certain eligibility requirements, you can even make tax deductible contributions. Eligibility for contributions is based upon age and annual income. Eligibility for the deduction is based upon your annual income and whether you are an active participant in a qualified retirement plan. The maximum contribution for Year 2000 to the Traditional IRA is $2,000 for an individual, $4,000 for a married couple filing jointly, or 100% of compensation, whichever is less in each case. The Traditional IRA may also receive rollovers and direct rollovers from qualified retirement plans. Withdrawals may be made prior to age 59 ½ without tax consequences only if certain conditions are met. Mandatory withdrawals begin at age 70 ½. For more details, contact your Carolina Federal Credit Union IRA representative.
- Roth IRA - Your contributions aren’t tax-deductible, but this IRA offers the opportunity for tax-free earnings. Eligibility for contributions is based upon annual income. Contributions can be withdrawn tax-and-penalty-free at any time and even earnings can be withdrawn tax-and-penalty-free after age 59 ½ if any one of several conditions are met. The maximum contribution for Year 2000 to the Roth IRA is $2,000 for an individual, $4,000 for a married couple filing jointly, or 100% of compensation, whichever is less in each case. For more details, contact your Carolina Federal Credit Union IRA representative.
- Education IRA - As with the Roth, your contributions aren’t tax deductible, but again this IRA offers the opportunity for tax-free earnings. Eligibility for contributions is also based upon annual income. Although not really a retirement product, this does provide a tax-advantaged vehicle for higher education, essentially acting as a gift to a beneficiary (minor) that is withdrawn tax-and-penalty-free for qualified education expenses. The maximum contribution for Year 2000 is $500 for all Education IRAs opened on a child’s behalf. For more details, contact your Carolina Federal Credit Union IRA representative.
IRA representatives at Carolina Federal Credit Union can assist you in making the best decision for you IRA. Whether you are considering a rollover or just thinking about making a contribution, Carolina Federal Credit Union can point you in the right direction. We can make an important decision easy.
When establishing an IRA at Carolina Federal Credit Union or at any financial institution, we recommend that you consult your attorney, accountant, or financial / tax advisor in order to determine eligibility and tax deductibility. We also suggest that you review IRS Publication 590, Individual Retirement Arrangements, or visit the IRS web site ( www.irs.gov) for more information.
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