IRA Accounts
Individual Retirement Account programs offered at ACU are Traditional,
Roth, & Coverdell Education Savings
Accounts. At your direction, deposits are invested in IRA share
savings, IRA Certificates of Deposit, and/or a Market Index CD.
Dividends on IRA shares are calculated on the daily balance and
paid quarterly. Additions to your IRA are at your convenience through
payroll deduction, direct deposits, direct transfers, or rollovers.
If you are retiring, transfer your qualified 401-K or pension plan
to our IRA program.
Stop by any of our four convenient locations
or call us at (563) 557-2229 or 1-800-928-4328 for information on
how you can stretch your retirement savings with new and improved
IRA's.
Alliant Credit Union does not provide tax or legal advice. You
should contact your tax or legal advisor for advice regarding your
situation.
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With a Traditional IRA, you can contribute up to $5,000 a year
for 2008. Members 50 and over can make an additional $1,000
catch-up contribution for 2008. Traditional IRAs offer tax-deferred
earnings and the possibility for tax-deductible contributions.
These tax advantages make the traditional IRA a powerful tool in
creating a balanced, long-term savings plan.
Who can make a contribution?
- Any person under the age of 70-1/2 who has earned compensation
during the year for which a contribution is to be made..
- Any person under the age of 70 ½ who does not have earned
compensation but does file a joint income tax return with a spouse
who has earned compensation during the year for which a contribution
is to be made.
Note: Earned compensation is defined as wages, salaries,
tips, bonuses, or any other amount received from performing duties
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A Roth IRA allows you to contribute up to $5,000 a year for 2008. Members
50 and over can make an additional $1,000 catch-up contribution
for 2008. Unlike
traditional IRA’s, contributions to a Roth IRA are never
tax-deductible. This type of IRA is more flexible in that earnings
can be withdrawn tax free when:
- The funds have been in the account at least five years AND one
of the following conditions apply:
- You are older than 59 1/2
- You become disabled
- You die, and it's paid to your beneficiary
- You use the money for a first-time home purchase
($10,000 lifetime withdrawal limit per person).
Most contributions made to your Roth IRA can be withdrawn anytime,
because you have already paid tax on the money you contributed.
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A Coverdell Education Savings Account allows you to save for your
child's educational needs. Contributions are not tax-deductible,
but earnings grow tax-free. There are no taxes or penalties on money
withdrawn to pay for qualified education expenses. Qualified education
expenses include tuition, fees, books, and equipment required for
enrollment or attendance at nearly any post-secondary educational
institution (public, nonprofit or proprietary). Certain room and
board expenses may also qualify. Qualified expenses also include
these same expenses for elementary education, secondary education,
the purchase of computer technology, or equipment that is used by
the beneficiary and the beneficiary’s family while the beneficiary
is in school. Contributions are limited to $2,000 per year per child
younger than age 18.
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A Health Savings Account (HSA) gives you more flexibility and control
over your health care costs. That’s because it empowers you
to make your own health care decisions.
You will be able to deduct your contributions to your HSA, and
the account earnings will accumulate on a tax-deferred basis. Best
of all, distributions from your HSA are tax-free if they are used
for qualified medical expenses.
Opening your HSA
To open an HSA, you must select a high-deductible health plan.
The deductible must be at least $1,100 for an individual plan
and at least $2,200 for a family plan. The major advantage of
a high-deductible plan is lower premiums.
Contributing to Your HSA
You must enroll in a high-deductible health plan before you can
make HSA contributions. The maximum annual HSA contribution is
the amount of your plan’s deductible. However, the contribution
for 2008 cannot exceed $2,900 for an individual plan or $5,800
for a family plan. Any eligible individual over age 55 can contribute
an extra amount of $900 for tax year 2008. Members 55 and
older may contribute an extra amount of $800 for the 2007 tax
year.
Account Balance Is Carried Over
Unlike contributions to a flexible spending account, the balance
of your HSA at the end of the year is carried over to the next
year. So you’re not placed in a position of having to “use
it or lose it” each year.
Protection from Catastrophic Medical Costs
To be coordinated with an HSA in 2008, a high-deductible health
plan cannot have out-of-pocket limits which exceed $5,600 for
an individual plan or $11,200 for a family plan. The high-deductible
health plan provides you with protection from catastrophic medical
costs, and the HSA provides you with a source of funds to pay
some or all of the costs not covered by the health plan. To
be coordinated with an HSA for the 2007 tax year, a high-deductible
health plan cannot have out-of-pocket limits which exceed $5,500
for an individual plan or $11,000 for a family plan.
Control and Flexibility
An HSA enables you to take control of your health care decisions.
And since you are the owner of your HSA, it doesn’t matter
what your job status is or whether your employer makes contributions
to your plan. Your HSA will always follow you.
Alliant Credit Union does not provide tax or legal advice. You
should contact your tax or legal advisor for advice regarding your
situation.
Stop by any of our four convenient locations or call us at (563)
557-2229 or 1-800-928-4328 for all the details about how you can
stretch your retirement savings with new and improved IRA's.
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