Individual Retirement Accounts
|Traditional IRAs||Roth IRAs||Coverdell IRAs (used for education expenses):|
|Potential tax deduction for contributions||Contributions are not tax deductible||Earnings are tax-deferred and tax-free if used for eligible education expenses|
|Earnings are tax-deferred||Earnings are tax-deferred and potentially tax-exempt||Contributions are not tax deductible|
|Distributions are generally taxable||Distributions are generally tax-free||Contribution limit of $2,000 per child each year|
|Distributions may begin at age 591/2 without IRS tax penalties||No age limit for making contributions||Contributions are not considered when calculating Traditional or Roth IRAs|
|Distributions required to begin by age 701/2 with a required minimum distribution||No required minimum distributions||Can be transferred to another family member|
|No further contributions can be made after you reach 701/2 years old||Income restrictions may apply||Almost anyone can contribute on behalf of the child, they aren't just for parents|
You can fund your IRA account from your Regular Share Savings account, Money Market, or Share Certificate account. You may also choose to do a roll-over of any qualified pension fund, thrift plan, or retirement benefit and arrange to deposit the funds in a Freedom IRA. Consult a qualified tax advisor before you proceed. What is a roll-over?
Choosing a way to fund your IRA
Money Market IRA1
Share / Special/ Jumbo Certificate IRA2,3, 4
|Access to funds||Immediate||Immediate||When term expires|
to Earn Dividend
|$100 Daily Minimum Balance||$2,500||$300 – Share
$1,000 – Special
$50,000 – Jumbo
|Term||No term required||No term required||6 – to – 60-month options|
|Benefits||May have tax benefits.
Earnings may be tax deferred.
|May have tax benefits. Earnings may be tax deferred.||May have tax benefits. Earnings may be tax deferred.|
1 A $10 monthly service fee applies when the balance in a Money Market drops below $2,500.
2 Special Share/IRA Certificates are offered for 13-month, and 25-month terms with a low $1,000 minimum.
3 Jumbo Share/IRA Certificates offer a larger return for savings of $50,000 or more for terms of 6 to 60 months.
4 A penalty will be imposed for early withdrawal that could reduce earnings. IRS tax penalties may also be applied.
Safeguarding your hard-earned money is critical. That’s why Freedom Federal Credit Union has federal share insurance, administered by an independent Federal Government agency, the National Credit Union Administration (NCUA). The National Credit Union Share Insurance Fund (NCUSIF) protects aggregate savings up to at least $250,000 in your regular Share Savings, Certificates, Checking, and Coverdell ESA accounts. Individual Retirement Accounts (IRAs) are insured separately up to $250,000.