What is an IRA?

An "IRA" is an Individual Retirement Account, a type of savings account designated by the Federal Government as a means of saving for retirement. Anyone that has earned income (sweat-of-the-brow income) can contribute to his or her IRA or to an IRA for his or her spouse. Fixed and variable rate individual retirement plans are available.

Types of IRAs

These funds may be invested in either the IRA Accumulator Investment or the IRA Investment Certificate. The total of all IRA investments in the same name is one IRA account. Maximum deposit amounts and withdrawal requirements cover an individual's total IRA investments in all financial institutions.

Traditional IRA
  • Maximum Annual Deposit:
    • Year 2015 = $5500
    • Age 50+ = $6500
    • All amounts are combined maximums for both IRA’s total allowed annual deposits.
  • Annual Contribution Deadline:  April 15 or tax-filing deadline
  • Age Limit for Deposits:  70 1/2
  • Age Withdrawals Required:  70 1/2
  • Consult your tax advisor regarding tax consequences of investments.
  • Penalty for early withdrawal without exemption:  10% before age 59 1/2 on all funds
  • Mandatory Withdrawals:  Age 70 1/2
Roth IRA
  • Maximum Annual Deposit
    • Year 2015 = $5,500
    • Age 50+ = $6,500
    • All amounts are combined maximums for both IRA's total allowed annual deposits.
  • Annual Contribution Deadline:  April 15 or tax-filing deadline
  • Age Limit for Deposits:  None
  • Age Withdrawals Required:  Not required - may be left until death of owner
  • Consult your tax advisor regarding tax consequences of investments.
  • Penalty for early withdrawal without exemption:  10% on earnings only before age 59 1/2
  • Mandatory Withdrawals:  At owner's death
Coverdell Educational Savings Account
  • Maximum Annual Deposit:  $2,000 per child
  • Annual Contribution Deadline:  April 15 or tax-filing deadline
  • Age Limit for Deposits:  Child age 0-18
  • Age Withdrawals Required:  Must be used or transferred to family under age 18 before owner is age 30
  • Consult your tax advisor regarding tax consequences of investments.
  • Penalty for early withdrawal without exemption:  10% on earnings only withdrawn for reasons other than qualified educational expenses
  • Mandatory Withdrawals:  At age 30 or at owner's death
Health Savings Accounts

Health Savings Accounts (HSA) are emerging as a preferred option for saving for health care costs. They operate much like an IRA in that it is pre-tax money that helps members pay for services not covered in their health plans.

Benefits
  • The contribution will remain in the account from year to year until the member needs them. Unspent balances will remain in the account until spent. There is no "use it or lose it rule."
  • Contributions can be made by the member's employer, the account owner, or anyone else on behalf of the owner.
  • Consult your tax advisor regarding tax consequences of investments.