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Whether you're saving for retirement or education, Shell New Orleans FCU has the answer for you, providing a number of tax-advantaged IRA savings with flexible features to meet just about any need.
Contributions to the Roth IRA or Education Savings Account IRAs aren't tax deductible, but they offer the opportunity for tax-free earnings, and because they are made with after tax funds, withdrawals made in retirement are not considered income. The Education Savings Account IRAs are probably the most improved, with annual contribution limits increased to $2,000 per child; also, it allows you to make withdrawals for any education related expenses, from grade school all the way through college.
Traditional IRAs have benefited from recent tax-law changes to become more attractive because their expanded income limits allow more people to make tax-deductible contributions. In addition, penalty-free withdrawals are allowed for qualified higher-education expenses and for a first-time home purchase.
Traditional IRAs allow you to save up to $5,000 a year, plus a catch
up amount of $1,000 if you are over 50. All of the interest earned is
tax-deferred until you withdraw funds from the account for retirement
or for a qualified reason. Qualified reasons include a once-in-a-lifetime
$10,000 tax-free withdrawal made for a first time home purchase, or
to pay for college. Traditional IRAs do have eligibility limits though
depending on your tax filing status, your adjusted gross income and
whether you or your spouse participate in your company's qualified
retirement plan.
People who don't qualify for a Traditional IRA now have an alternative.
While the Roth doesn't offer the tax deductibility of a Traditional
IRA, it does allow you to defer taxes on the earnings until they are
withdrawn. And, the withdrawals can be permanently exempt from taxes
if the Roth IRA is held for at least five years, and either the withdrawal
was made after you turn 59 ½ years old, for a first time home purchase,
or it was due to your death or disability. Similar to the Traditional
IRA rules, annual contributions can be up to $5,000 plus a catch-up
amount of $1,000 per year if you are over 50 years of age. The eligibility
rules are very generous for a Roth IRA, with the only limit being
your adjusted gross income. Single tax filers with an adjusted gross
income up to $101,000 and married couples filing jointly with
an adjusted gross income up to $159,000 are eligible to open
and contribute.
Modified Adjusted Gross Income Limits
for Regular Roth IRA Contributions |
Filing Status |
Income Limit for Full Contribution |
Phase-Out Range
(Partial Contribution) |
| Single |
Up to $101,000 |
$101,000 up to $116,000 |
| Married, filing jointly |
Up to $159,000 |
$159,000 up to $169,000 |
| Married, filing separately |
$0 |
$0 up to $10,000 |
Education Savings Accounts are the newest type of tax-advantaged savings account, and is too good to pass up if you have children. You are allowed to deposit up to $2,000 per year for each child up to age 18, as long as you do not make any contributions to a state tuition program for each child during the same year. Although contributions aren't tax deductible, earnings accumulate tax-deferred and withdrawals to pay qualified education expenses of the designated account beneficiary are free from Federal taxes. Recent changes to tax laws have also significantly increased what is considered a qualified expense, now covering educational expenses incurred while the child is in kindergarten through college at a public, private, or religious school.
Need help deciding what type of IRA best meets your needs? Let one of our IRA Specialists help you sort through your options by stopping by or calling (504) 728-4853, or toll-free (866) FOR-MY-CU (367-6928).
Invest Your IRA Based On When You Expect To Need the Money.
If you anticipate needing some or all of the funds in the account within the next year, you will want to place the funds in a IRA Flex Fund savings. This is an overnight savings account with a competitive yield so you can quickly move the funds to another IRA plan.
If the funds won't be withdrawn or moved anytime soon, or if you know exactly when this will occur, then you can maximize and guaranty the interest earned by locking up the funds for a set term using a Certificate of Deposit. We offer flexible terms of 6, 12 and 18 months, and 2, 3 and 5 years, and you typically earn higher returns for locking up the money for longer terms. To make it easy to get started, we require only a $100 deposit to open an IRA CD. If you participate in our Member Select program, your IRA CD will receive a.25% interest rate bonus as long as you belong to the program.
To learn more about IRAs or to speak with an IRA Specialist, stop by or call (504) 728-4853, or toll-free (866) FOR-MY-CU (367-6928)
**Individuals who make withdrawals from an IRA account before
attaining the age of 59 ½ may be subject to a 10% penalty tax
on the taxable portion of the withdrawal. Additionally, withdrawals
may be subject to federal income tax withholding. Consult your
tax advisor before investing or withdrawing funds from an IRA
or other retirement plan.
This credit
union is federally insured by the National Credit Union Administration.
Members are insured by the NCUA to the maximum of $250,000.00
each.
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