Stark Federal Credit
Union has three types of IRAs available...
is a Roth IRA? Working people can now contribute
up to $5,000 per year of their earned income. Your
qualified withdrawals will be tax free -
both principal and interest!
Makes a Withdrawal "Qualified"? To
avoid early withdrawal penalties as well as paying taxes
on the amount withdrawn, you must hold the Roth IRA
account at least five years (beginning
with the tax year in which you open the account). In
addition, aqualified withdrawal must also be:
to you when you are at least 59 and a half years
to you if you become disabled (as defined by the
IRS code); OR
to your heirs or estate after your death; OR
to purchase a first home
there other benefits to the Roth IRA?
earning up to $95,000 and married couples filing
jointly with a combined income up to $150,000 are
eligible. These income limits are much higher
than for a regular IRA.
can fund a Roth IRA even if you are covered by a
company retirement plan such as a pension,
401(k), or profit sharing.
regular IRAs, there are no time limits for making contributions. (Regular IRAs forbid contributions
after age 70½.) As long as you continue working,
you may make contributions to your Roth IRA.
you are never required to make withdrawals from a
is a Traditional IRA? Contributions into the
plan may be tax-deductible (consult your tax advisor
regarding the deductibility of IRA contributions) and the
earnings grow tax-deferred until retirement. You don't
pay taxes until you withdraw the money, which if taken at
retirement, may be taxed at a lower rate. And you must
start using the money by age 70½.
are the benefits of a Traditional IRA? The plan
may allow you to redue your income tax liability for the
year you're making the contribution, plus your
tax-deferred earnings grow faster than a comparable
Coverdell Education Savings
is a Coverdell Educational Savings Account? An Education Savings Account
(ESA), formerly Education IRA, is a
terrific way for parents, grandparents and others to help meet the rising costs of a student's education.
are the benefits of an ESA? For taxable years beginning in 2002, the annual contribution amount has been increased from $500 per beneficiary to $2,000 per beneficiary. The earnings grow tax-free. And now, your ESA can be used to pay
qualified elementary school and secondary school expenses as well as those for higher education.
For more information on the new ESA program, call 330-493-8325.