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IRAs

IRA Options

*The IRS has confirmed that the IRA and HSA contribution deadline has been extended to July 15, 2020, which aligns with the three-month tax return filing deadline extension announced in Notice 2020-18, issued on March 20, 2020.

Individual Retirement Accounts

An Individual Retirement Account (IRA) is a deposit account that provides security for the future and serves to compliment a fixed income after retirement.

  • We offer both a savings and a certificate investment IRA options
  • Dividends compound and pay monthly
  • The account can be opened with a minimum deposit of $10.

Heartland Credit Union offers both Traditional and Roth IRA plans. Consult a tax advisor to help you decide which type of IRA suits your needs. The following chart compares the two types of IRAs available and will help you understand the differences between the two options.

Question Traditional Roth
Who can contribute?  

Anyone under the age of 70 ½ who has earned income

Anyone (at any age) who meets both of the following requirements:

1) Has earned income.

2) MAGI* does not exceed the IRS limits.
How much can I contribute?

There is a $6,000 Maximum annual Contribution limit,
which is total of Traditional and Roth combined. An
additional $1,000 "catch-up contribution" can be made
in the year an IRA owner attains age 50.

- Contributions cannot exceed your compensation.

There is a $6,000 Maximum annual Contribution limit,
which is total of Traditional and Roth combined. An
additional $1,000 "catch-up contribution" can be made
in the year an IRA owner attains age 50.

- Contributions cannot exceed your compensation.

- Your MAGI* Affects maximum contribution
Are contributions tax-deductible?

Active participation in employer-sponsored retirement plans,
your marital and tax-filing status, and your MAGI determine
whether you can deduct your IRA contribution. For example,
if you and your  spouse are not active participants, you may
deduct your contribution, no matter how high your income.
If you or your spouse is an active participant, the deduction
is dependent on your MAGI and income filing status. As your
MAGI increase, your deduction decreases. Your tax professional
can help you determine whether your contribution is deductible.
Even if you cannot deduct your contribution, you can still make
nondeductible contributions and take advantage of the tax deferred
earnings.

Roth IRA contributions are not tax deductible.
What are the tax advantages?

 - Earnings grow tax-deferred until withdrawn

 - Contributions may be tax-deductible

Earnings are tax-free if account is open
for five years and withdrawn for a
qualified reason (age 59 ½, disability,
death, or a first-time home purchase up to $10,000.)
Are there required distributions? Yes, beginning at age 70 1/2 No
When can I withdraw without restrictions?

Withdraw penalty-free for any of the following reasons:

  • Age 59 ½
  • Death
  • Disability
  • IRS Levy
  • Substantially equal periodic payments
  • Qualifying medical expenses
  • health insurance premiums following unemployment
  • First-time Homebuyers expenses (up to $10,000)
  • Higher education expenses
  • Qualified reservist distribution

Regular contributions can be withdrawn
tax-free and penalty-free at any time.
After the account has been open five tax
years, earnings can be withdrawn tax-free
and penalty–free for any of the following
reasons:

  • Age 59 ½
  • Disability
  • Death
  • First-Time Home Purchase up to $10,000

*MAGI - Modified Adjusted Gross Income from the federal tax form

Heartland Credit Union IRAS are Federally insured by the National Credit Union Administration (NCUA) and privately insured by Excess Share Insurance Corporation (ESI).

This is in addition to the federal insurance on your other Heartland Credit Union accounts.

Not intended as tax advice. Please consult a tax professional.

How to Calculate Your Retirement Needs