IRAs

Multiple IRA options to fit your savings needs:

Traditional IRA

• Best used for retirement savings
• Contributions are tax-deductible, with limitations
• Earnings are tax-deferred until you begin to withdraw funds
• Withdrawals are taxable
• Age considerations: up to age 70

Roth IRA

• Best used for retirement savings; first-time home purchase; some education and/or medical expenses
• Contributions are not tax-deductible
• Earnings are tax-free, with some limitations
• Withdrawals are tax-free, if for qualified distribution
• Age considerations: any age

Coverdell ESA

• Best used for a child's future education expenses
• Contributions are not tax-deductible. Family may contribute to a child's Coverdell ESA
• Earnings are tax-free, when used for education expenses
• Withdrawals are tax-free, when used for education expenses
• Age considerations: child under the age of 18

Rates

Early Withdrawal Provisions – Generations Federal Credit Union imposes a penalty if you withdraw any of the funds before the maturity date. For accounts having a term of 365 days or less, the penalty imposed will equal 90 days of dividends on the amount withdrawn. For accounts having a term greater than 365 days, the penalty imposed will equal 180 days of dividends on the amount withdrawn.

¹ Annual Percentages Rate. ² Annual Percentage Yield. All rates are as of June 22, 2012 and subject to change at any time. *$25 minimum balance.

Table of Contents:

• Expert Articles/Papers
• Infographics
• FAQs

Expert Articles/Papers:

• Shaping Up Your Finances
  You manage to make ends meet. You pay every expense and bill on time, every time. But there’s one person you’ve forgotten to pay… yourself. This white paper offers some great budgeting ideas to help you move away from living paycheck to paycheck and begin saving for your future.
• Checklist: Creating a Budget
  Follow these steps to create your budget.
• Checklist: Spending Money Wisely
  Spending money is easy. Spending money wisely is another matter. Follow these steps to shop smarter.
• Part One: What Does Zero Mean?
  This first of a two-part series seeks to uncover the truth behind the promise of zero as it pertains to credit cards, payday loans and pawnbrokers.
• Part Two: What Does Zero Mean?
  This second of a two-part series seeks to uncover the truth behind the promise of zero as it pertains to the rent-to-own industry, refund anticipation loans and car loans.
• Give Yourself Some Credit
  The bills are piling up and you don't know what to do. Maybe an unexpected medical expense put you behind, or maybe your hours at work were reduced. Whatever the reason, you're behind on your payments and your credit score is taking a beating. It's not too late to turn it all around.

Infographics:

• The True Cost of Tax Refund Loans
  
   
• The Real Game of Life
  
   
• Enhancing Small Business Lending
  
   
• Tighten Your Wallet and Your Waist
  
   
• Building for your future, now!
  

Frequently Asked Questions:

Q. If I already have a retirement plan through my employer, can I still contribute to an IRA?

A. Yes, you can contribute to a Roth, Coverdell ESA, or Traditional IRA regardless of whether or not you have an employer-sponsored plan. In fact, IRAs are a great way to increase your savings.

While participation in a retirement plan doesn't change how much you can contribute to an IRA, it can affect whether or not you're eligible to deduct your contributions to a Traditional IRA on your tax return. Keep in mind that as long as you've earned compensation, you can always make nondeductible contributions to a Traditional IRA and benefit from tax-deferred earnings.

Q. Can I withdraw money from my IRA before retirement?

A. That depends on the type of IRA and why the funds are withdrawn. Some let you withdraw prior to retirement for specific purposes, while others allow for early withdrawal, but you’ll pay a penalty and may pay tax on the money you withdraw. Examples of some exceptions might be retirement, death or disability, or some medical expenses. If you have questions about early withdrawal from your IRA, please contact the credit union for more information.

Q. What are the contribution limits?

A. Contribution limits for IRAs change year-to-year and according to your age. For 2011, the combined contribution limit for Traditional and Roth IRAs is $5,000 under age 50, and $6,000 age 50 and older. For Coverdell ESAs, the combined contribution limit is $2,000. There may be additional limitations, based on your household income and tax filing status.

Q. Why is a Coverdell ESA different?

A. Coverdell ESAs are designed to save for future education expenses, and are opened in the name of a child. Anyone can contribute to the child’s ESA until he/she reaches the age of 18. Funds must be withdrawn by that child for education expenses by age 30, or roll the funds to another eligible family member.