Traditional IRA
A Traditional IRA allows you to save for specific retirement goals, while providing long-term, tax-advantaged savings opportunities to help you make the most of your financial future.
Anyone under age 70 1/2 who has earned income (or is filing jointly with a spouse who has earned income) may contribute to a Traditional IRA.
Benefits & Highlights
- Up to $4,000 in tax-deductible contributions for 2007 and up to $5,000 for 2008
- Immediate tax benefits – contributions may be tax deductible and earnings are tax deferred until removed from the IRA*
- No minimum yearly contribution
- Dividends are compounded daily and posted monthly
- IRAs are federally insured up to $250,000 by the National Credit Union Share Insurance Fund
- Make withdrawals penalty-free after age 59 1/2
Contribution Limits
You can make the following maximum contributions to a Traditional or a Roth IRA:
2008, 2009, 2010 |
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$5,000 under age 50 |
$6,000 over age 50 |
Make withdrawals penalty-free** for any of the following reasons:
- Age 59 1/2
- First-time home purchase (lifetime limit is $10,000 per person)
- Disability
- Qualified higher education expenses
- Qualifying medical expenses exceeding 7.5% of adjusted gross income
- Payment to beneficiaries upon the owner's death
- Payment of health insurance premiums while unemployed for 12 weeks or longer.
Please note, when you're ready to tap into a Traditional IRA, the money you withdraw is considered regular income, so you'll owe tax on the earnings at your current rate. If you've deducted your contributions, you'll owe tax on that part of your withdrawal as well, so the amount you have available to spend is reduced by whatever you owe in tax.
*Be sure to consult your tax advisor regarding how various IRAs relate to your tax situation.
** Early withdrawal penalties from certificates will apply.
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