Individual Retirement Accounts
A FirstLight individual retirement account is a smart investment in your own future, and your tax-deferred savings plan starts right here! There aren’t any minimum balance requirements and the IRAs are separately insured up to $250,000 by the National Credit Union Administration. Dividends and statements are issued quarterly for your convenience.
Withdrawals from the IRAs are subject to age requirements or penalty. A consultation with your tax advisor for specific conditions on age requirements, tax deductions and eligible deposit amounts should be scheduled.
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Traditional IRA
The traditional IRA is an Individual Retirement Account designed solely to encourage individuals to save for retirement. Better known as a personal savings plan, it holds an incentive that can provide income tax advantages to individuals who place money aside for retirement. This is a valuable retirement planning tool for young and old alike.
- Contribute up to $5,000 after-tax dollars if you are a single filer
- Married couples can contribute up to $10,000
- Individuals attaining the age of 50 before the end of the taxable year may be eligible to
contribute an additional amount to a traditional and/or Roth IRA as a catch-up contribution
of $1,000 for 2009
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Roth IRA
The Roth IRA allows you to save after-tax dollars by enjoying tax-free earnings! Here’s how it works:
- Contribute up to $5,000 after-tax dollars if you’re a single filer earning less than $120,000
- Married couples can contribute up to $10,000 if your combined income is less than
$176,000
- Individuals attaining the age of 50 before the end of the taxable year may be eligible to
contribute an additional amount to a traditional and/or Roth IRA as a catch-up contribution
of $1,000 for 2009
- Pay no taxes on withdrawals, provided funds have been in the account at least five years
and you are older than 59 1/2, or you become disabled, or you die and it’s paid to your
beneficiary, or you use the money for a first-time house purchase ($10,000 lifetime
withdrawal limit)
Unlike the Traditional IRA, which requires you to begin withdrawing money at age 70, the Roth IRA has no such requirement. You can let your money keep working while earnings continue to grow.
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Education IRA
This type of account allows you to save for any post-secondary education by investing up to $2,000 a year per child younger than 18. The earnings on the Education IRA remain tax-free, though the contributions are not tax deductible. No penalty is assessed when money is withdrawn to pay for qualified higher education expenses, such as tuition and fees, before the recipient reaches age 30.
If you’re a single filer, you may contribute the full $2,000 per year per child if your income is less than $95,000. The contribution limit falls as your income climbs toward $110,000. For married filers, the income limits spans $190,000 to $220,000.
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IRA Share Certificates
An IRA share certificate works almost like a regular share certificate with the flexibility of selecting a term from 91 days to 5 years. Upon share maturity, you may renew the certificate, select a different term, or transfer the funds back into your regular IRA. Anyone with earned income from employment can open an IRA share certificate, though you must use the funds transferred from an existing IRA. There is a 90-day early withdrawal penalty, and you will only be assessed another penalty if you decide not to return the funds to your IRA. For tax purposes, you are allowed a maximum annual contribution of $5,000 as a single filer and $10,000 for joint married filing.
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