After working so hard for so many years, Northern Skies Federal Credit Union wants to help you set up a comfortable retirement for yourself. An IRA pays you competitive dividends and earnings in your IRA may be tax deferred*.
We offer Traditional and Roth accounts, so you can choose the one that suits your needs. We also offer Coverdell ESAs to help you or your student pay for college tuition.
Summary
- Competitive dividends above standard savings rates
- Traditional, Roth, Educational IRA options
- No setup fees
- No monthly or annual maintenance fees
- Generous contribution limit per year (call for current limits)
- Additional $1,000 "catch-up" contribution allowed for ages 50+
- Earnings may be tax deferred*
- Early withdrawals for higher education or a first home are penalty-free
- Funds can be used to purchase CDs within IRA
- NCUA insured up to $250,000
- No minimum deposit to open**
IRA CERTIFICATES
With an IRA CD, you can lock in your retirement savings at an even higher interest rate. An IRA Certificate is available for a 12-month or 24-month term.
*Consult a tax advisor.
**To open this account, you must first open a Member Savings (S1) account with a minimum deposit of $5, which establishes your share in our credit union.
Traditional vs. Roth
There are advantages to both Traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A Traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.
TRADITIONAL IRA
- No income limits to open
- No minimum contribution requirement
- Contributions are tax deductible on state and federal income tax*
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Withdrawals can begin at age 59 1/2
- Early withdrawals subject to penalty**
- Mandatory withdrawals at age 70 1/2
ROTH IRA
- Income limits to be eligible to open Roth IRA***
- Contributions are NOT tax deductible
- Earnings are 100% tax free at withdrawal*
- Principal contributions can be withdrawn without penalty*
- Withdrawals on interest can begin at age 59 1/2
- Early withdrawals on interest subject to penalty**
- No mandatory distribution age
- No age limit on making contributions as long as you have earned income
*Subject to some minimal conditions. Consult a tax advisor.
**Certain exceptions apply, such as healthcare, purchasing first home, etc.
***Consult a tax advisor.
Coverdell ESA
Create an easier transition into college for yourself and your student by setting up a savings account early. A Coverdell Education Savings Account (ESA) provides a tax-free safe place to grow competitive dividends and also financial confidence for a new stage in life.
- Set aside funds for your child's education
- No setup or annual fee
- Dividends grow tax-free
- Withdrawals are tax-free and penalty-free when used for qualified education expenses*
- Designated beneficiary must be under 18 when contributions are made
- To contribute to an ESA, certain income limits apply**
- Contributions are not tax deductible
- $2,000 maximum annual contribution per child
- The money must be withdrawn by the time he or she turns 30***
- The ESA may be transferred without penalty to another member of the family
- No minimum deposit to open****
*Qualified expenses include tuition and fees, books, supplies, board, etc.
**Consult your tax advisor to determine your contribution limit.
***Those earnings are subject to income tax and a 10% penalty.
****To open this account, you must first open a Member Savings (S1) account with a minimum deposit of $5, which establishes your share in our credit union.
