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Retirement Planning / IRAs

It is never too early to start planning and saving for your retirement. Congress established Individual Retirement Accounts to encourage individuals to save money for their retirement. And as part of the credit union mission to promote thrift among members, Southwest FCU offers a variety of long- and short-term options to make retirement savings easy. Choose the one that fits your retirement planning goals.

IRA Share Account

You can use this qualified IRA savings account to save small amounts of money until enough is earned to purchase an IRA Share Certificate. With a balance of $100 or more, it earns dividends that are paid monthly on the daily balance. No dividends are paid on balances under $100. Funds may be transferred into an IRA Share Certificate without penalty once $1,000 is saved. Deposits can be made at any time, or you can arrange payroll deduction deposits.

IRA Share Certificate

An IRA share certificate works almost like a regular share certificate with the flexibility of selecting a term.  The is a fixed rate account that allows even a small investor to earn a higher, stable return while saving for retirement.  Upon share maturity, you may renew the certificate, select a different term, or transfer the funds to a regular IRA.

Traditional Individual Retirement Account (IRA)

The traditional IRA is an Individual Retirement Account designed solely to encourage individuals to save for retirement.  Better known as a personal savings plans, it holds an incentive that can provide income tax advantages to individuals who put money aside for retirement.  This is a valuable retirement planning tool for our members of any age.

With Traditional IRAs:

  • You can receive tax-deferred earnings and possibly tax-deductible contributions if you meet the requirements. If you and/or your spouse actively participate in an employer-sponsored retirement plan, you can deduct contributions only if your income is below certain limits. If you’re not participating in a retirement plan, your traditional IRA contribution is deductible regardless of income. Ask a Southwest Financial Service Representative for details.
  • You can contribute if you have earned income and you will not reach age 70 1/2 by the end of the year. If you file a joint tax return, you can treat your spouse’s income as your own.
  • You can contribute to a traditional IRA, an employer-sponsored retirement plan, and a Roth IRA in the same year.
  • If you make a withdrawal before age 59 1/2, you generally must pay a 10% tax on early distributions. There are exceptions, such as rollovers, so ask a Southwest Financial Service representative for more details.
  • You must begin taking required minimum distributions at age 70 1/2.

Roth Individual Retirement Account (Roth IRA)

The Roth IRA allows you to save after-tax dollars by enjoying tax-free earnings.

  • Contribute up to $5,000 after-tax dollars if you’re a single filer earning less than $125,000
  • Married couples can contribute up to $10,000 if your combined income is less than $183,000
  • Individuals attaining the age of 50 before the end of the taxable year may be eligible to contribute an additional amount to a Traditional or Roth IRA as a catch-up contribution of $1,000 for 2012.
  • 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 funds are dispersed 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.