Traditional IRAs

Save for Your Future! It is never too early to set your retirement goals and take action.

Income limits have been raised so more people can make tax-deductible contributions. Qualified distributions are penalty-free for a first-time home purchase and higher education expenses.

Who Can Contribute

  • Anyone under the age of 70 ½ who has earned income
  • A ‘Non-Working’ spouse who is filing jointly with a spouse who has earned income

Contribution Limits

  • $5000 for anyone age 50 and under
  • Up to $6,000 if 50 years of age or older
  • Contributions cannot exceed earned income
  • Cannot exceed maximum contributions for both a ‘Roth’ and ‘Traditional’ IRA

Tax Advantages

  • Earnings are tax-deferred until you withdraw them
  • Individuals can contribute for prior year up to April 15th of current year or the tax return due date

Withdrawals

There are no penalties for withdrawing money from your Traditional IRA for the following reasons:

  • You’ve reached age 59 ½
  • Qualified higher education expenses
  • First time home purchase with a $10,000 maximum withdraw
  • Disability
  • Qualifying medical expense exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon owner’s death
  • Payment for health insurance premiums while unemployed for 12 weeks or longer

IRA Investment Options:


ROTH IRA

Contributions are made with after-tax dollars. Earnings may be withdrawn tax-free and penalty-free under a variety of conditions. Funds may be used for a first-time home purchase (lifetime limit of $10,000 per person).

Who Can Contribute

  • Anyone under the age of 70 ½ who has earned income up to $95,000 (single) or up to $150,000 (joint)
  • Single filers with up to $110,000 or joint filers earning up to $160,00 may make reduced contributions to a Roth IRA

Contribution Limits

  • Up to $6,000 if 50 years of age or older
  • Contributions cannot exceed earned income
  • Cannot exceed maximum contributions for both a ‘Roth’ and ‘Traditional’ IRA

Tax Advantages

  • Earnings are tax-deferred if account is opened for 5 years and withdrawn for qualified reason
  • Individuals can contribute for prior year up to April 15th of current year or the tax return due date
  • Unlike Traditional IRA’s you are not required to start withdrawals at age 70 ½, giving you more estate planning options

Withdrawals

There are no penalties for withdrawing money from your Roth IRA for the following reasons:

  • You’ve reached age 59 ½
  • Qualified higher education expenses
  • First time home purchase with a $10,000 maximum withdraw
  • Disability
  • Qualifying medical expense exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon owner’s death
  • Payment for health insurance premiums while unemployed for 12 weeks or longer

IRA Investment Options

  • Insured Certificates of Deposit offering a variety of maturities. IRA savings account with automatic payroll deduction or direct deposit contributions.
  • Click here for current IRA CD and IRA savings account rates.
  • Use our financial calculators to estimate your saving potential.

IRA Rollovers

When you change jobs or retire, you can make arrangements to roll your retirement plan over into an IRA at the Credit Union. Plans that may be rolled over include taxable distributions from Section 401 and 403 (b) plans as well as nontaxable voluntary employee contributions and distributions from governmental Section 457 plans.

The National Credit Union Administration insures IRAs to $250,000. This insurance protection is IN ADDITION to the insurance provided on your other deposits at MHS.

To speak with one of our friendly Member Service Representatives about opening an IRA call 248-334-0568, email us or stop in today!

This information is not intended as tax advice; please consult a tax professional.


Education IRA

A Smart Way to Save for Your Child’s Education!

The Coverdell ESA, also known as the Educational IRA, is a type of tax-advantage savings account created by the Taxpayer Relief Act of 1997. This IRA’s sole purpose is to help you pay for your child’s education expenses such as: tuition, fees, books, supplies, equipment, and in some cases room and board and computers.

Who Can Contribute

  • A single filer with a Modified Adjusted Gross Income (MAGI) up to $95,000
  • A joint filer with MAGI up to $190,000

Contribution Limits

  • Up to $2000 per year until the child (Designate Beneficiary) reaches the age of 18. (Does not apply to special needs beneficiaries)

Tax Advantages

  • Tax free withdrawals including earnings for qualified expenses.

Withdrawals
There are no penalties for withdrawing money from your Coverdell ESA for the following reasons:

  • Tuition, fees, books, and equipment required for enrollment or attendance at nearly any post secondary educational institution

What if the child does not use all of the money saved in the ESA?

  • A Designated Beneficiary can be changed if that child does not use all of the money in the Coverdell ESA. (spouse, sibling, step-sibling, niece, nephew, first cousin, etc as long as they are under the age of 30)
  • Cannot be rolled over into an Traditional/Roth IRA

Education IRA investment options

  • IRA savings account with automatic payroll deduction or direct deposit contributions.
  • Certificates of Deposit offering a variety of maturities.
  • Click here for current IRA CD and IRA savings account rates.
  • Use our financial calculators to estimate your saving potential.

The National Credit Union Administration insures IRAs to $250,000. This insurance protection is in addition to the insurance provided on your other deposits at MHS.

To speak with one of our friendly Member Service Representatives about opening an Education IRA call 248-334-0568, email us or stop in today!

This information is not intended as tax advice; please consult a tax professional.