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Frequently asked questions (FAQ)


How can I open an Individual Retirement Account (IRA)?
The minimum deposit to open an IRA account is $25. If you are transferring money from an IRA in another financial institution, we have high rate certificates for balances over $2,500. You will need to complete an IRA application for an individual account. There can be no joint owner, but you can designate a beneficiary. The information about your IRA account will appear on your credit union statement.

Who may have an IRA?
Anyone under the age of 70 1/2 may open an account if they have earned income. This cannot be income from social security, retirement, dividend income, or rental income. You can make a one-time contribution or make several deposits during the year. You can deposit by payroll deduction, direct deposit, automatic transfers, cash or checks.

How much can I contribute?
You can contribute up to $5,500 ($6,500 if you’re age 50 or older) per year if you have earned income of $2,000. For example, if you work only part-time and earned $900 this year, you can only deposit $900.

Can I contribute for my spouse who doesn’t work?
Yes! A spousal IRA can be opened for your unemployed spouse. As a family unit, you can deposit a total of $4,000, which can be divided between the two accounts anyway you wish, up to a maximum $2,000 per spouse.

Can I open an IRA for a previous tax year?
Contributions made through April 15 of the current tax year, may be applied to the preceding tax year. In other words, you have 15 1/2 months to make a deposit for any calendar year.

Are IRAs insured?
Yes! NCUA insures each IRA up to $250,000. This is in addition to and separate from the $250,000 insurance on the other individual share savings you have in the credit union.

How can I transfer money from an IRA into another institution?
It’s easy. Complete a form we give to you. We’ll mail it to the other institution and they will send the credit union the amount you designate. We take care of the transfer with the other institution so you do not need to handle paperwork and check. You can transfer money by this method an unlimited number of times each year. Another way is the rollover method. You withdraw the money from your IRA in a check made payable to you. You have 60 days from the date of the check to re-deposit the money in an IRA. You can have one rollover in a 12-month period. There is no government penalty for moving your money, if you follow the rules above. However, your institution probably will charge you a fee for a transfer. For example, our fee is $10 to transfer money from the credit union to another institution.

Must I make withdrawals from my IRA?
Yes, you must make a withdrawal by April 1 following the year you reach age 70 1/2. The amount, which must be withdrawn, is based on the balance and your life expectancy (joint life expectancy of you and your beneficiary). The minimum amount must be distributed every year or the IRS will charge a 50% penalty on the required minimum distribution. This is based on the theory that an I.R.A. is a tax-deferred account for the purpose of funding your retirement.

Why do you charge a fee for an IRA?
We charge $10 a year because these accounts require more maintenance, record keeping and reporting than other accounts at the credit union. Most financial institutions charge $10 to $15 annually and stockbrokers charge $20 and up.

How does the credit union invest IRA dollars?
All money deposited into the credit union is invested in loans to our members or in insured investments.

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