Which Path is Right for you?

Retirement

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Traditional IRA

It's easy to invest in your future at Capital City Press Federal Credit Union. The Traditional IRA can help you prepare for retirement and serve a number of other purposes. Earnings and deductible contributions in a Traditional IRAs grow tax-deferred until withdrawn, which can begin as early as 59 ½ but must begin at age 70 ½ You can withdraw up to $10,000.00 penalty free towards the purchase of your first home. Traditional IRA funds used to pay for qualified educational expenses can be withdrawn penalty free. There is no dollar limit and funds can be used for tuition fees, book, and supplies at a post-secondary institution. Funds to pay for certain medical expenses can be withdrawn from your Traditional IRA without paying a 10% early distribution tax. For questions to all of your IRA questions, call a member of our Financial Services Team at 225-761-5111.

Roth IRA

A Roth IRA can help you prepare for retirement and serve a number of other purposes. Roth IRAs serve as a great retirement tool because qualified withdrawals, including earnings, are tax fee. If you've had your Roth IRA for at least five years, you can use 10,000.00 towards the purchase of your first home and penalty free. There are no mandatory withdrawals, so you can leave money from your Roth IRA to your heir's tax free. Qualified educational expenses are penalty free. There is no dollar limit and funds can be used for tuition fees, books, and supplies at a post-secondary institution. You can access your regular contributions tax fee and penalty free at any time and for any reason. Contact a member of our Financial Services team at 225-761-1111 to open your account today.

Coverdell ESA

Coverdell ESA accounts are a smart way to help pay for education. Save up to $2,000.00 per child per year in a Coverdell Education Savings Account here at Capital City Press Federal Credit Union. There are a number of benefits to a Coverdell ESA. While your contributions are made with after-tax dollars, the earnings and withdrawals are tax-free when used for qualified educational expenses. And you or any of your family members can contribute to the account, up to the $2,000.00 total annual limit. You can continue saving each year until the child reaches 18. When the money is withdrawn, it can be applied to a broad range of qualified expenses for college and public or private K-12 education-including tuition, tutoring, room and board, and even computer equipment. A unique Coverdell ESA feature is your ability to transfer funds from one child's account in the same family. Also, contributions can be made on behalf of the same child to both a Coverdell ESA and a 529 plan. To learn more about Coverdell ESAs, call a member of our Financial Services Team.
 
 

Traditional IRA Roth IRA
Account Description
A Traditional IRA allows you to defer taxes on your earnings until they are withdrawn.
In addition, contributions made to your IRA may be fully tax-deductible in the tax year in which they were made.
A Roth IRA is a non-deductible account that features tax-free withdrawals, for certain distribution reasons, after a five year holding period.
Age Restrictions Under 70 1/2 No Age Restrictions
Income Eligibility Requirements Must have earned income equal to or greater than contribution Must have earned income equal to or greater than contribution.

For 2010, full contributions can be made if Modified Adjusted Gross Income is less than $167,000 for joint filers or $105,000 for individual filers.
Taxation of Earnings in IRA Tax deferred Tax deferred
Distribution requirements Must start at age 70 1/2 No distribution requirements
Taxation of distributions Taxed as ordinary income Not taxed
Contribution limits $5,500 for 2013 and indexed for inflation thereafter $5,500 for 2013 and indexed for inflation thereafter
Catch-up contribution for those age 50 and above $1,000 for 2013 $1,000 for 2013
Deductibility of contributions Deductible if not covered by employer plan or if Modified Adjusted Gross Income is below certain levels. (Consult your tax advisor). Not deductible
Penalty for withdrawal before age 59 1/2 10% penalty 10% penalty
  View Brochure View Brochure
Exceptions to 10% Early Distrubtion Tax Penalty
Permanent disability of the IRA owner
Death of the IRA owner
Withdrawals used to pay non-reimbursed medical expenses, provided that the expenses are in excess of 7.5% of the owner's adjusted gross income
Withdrawals used to help pay for the owner's first-time home purchase ($10,000 withdrawal limit)
Withdrawals used to pay higher education costs for the owner, the owner's spouse, children or grandchildren (federal income taxes may still be owed)
Withdrawals used to pay back taxes to the Internal Revenue Service (IRS) after a levy has been placed agains the IRA
Withdrawals used to pay medical insurance premiums, as long as the owner has been unemployed for longer than 12 consecutive weeks

** For all IRA accounts, you must maintain an average daily balance of $50.00 in your account to obtain the disclosed annual percentage yield.
 

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