IRAs
Individual Retirement Accounts
An Individual Retirement Account (IRA) is a deposit account that provides security for the future and serves to complement 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.
| Question |
Traditional |
Roth |
| Who can contribute? |
Anyone (at any age) can contribute if you (or your spouse if filing jointly) have taxable compensation.
|
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 $7,000 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 $7,000 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? |
Contributions to a Traditional IRA may be tax deductible.
- Your deduction may be limited if you ( or your spouse, if
you are married) are covered by a retirement plan at work and your income exceeds certain levels.
- Your deduction is allowed in full if you (and your spouse, if you are married) aren't covered by a retirement plan at work.
|
Roth IRA contributions are not tax deductible.
|
| What are the tax advantages? |
- Earnings grow tax-deferred until withdrawn
- Contributions may be tax-deductible
|
- Earnings grows tax-free.
- Earnings can be withdrawn tax-free and penalty-free at age 59 ½ if you have had the Roth IRA for at least five years.,(the five-year rule)
- Contributions can be withdrawn anytime, tax-free and penalty-free.
|
| Are there required distributions? |
Yes, beginning at age 73 |
No |
| When can I withdraw without penalty? |
|
• Earnings grows tax-free.
• Earnings can be withdrawn tax-free and penalty-free
at age 59 ½ if you have had the Roth IRA for at least five years.
(the five-year rule)
• Contributions can be withdrawn anytime, tax-free and penalty-free.
|
*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