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IRAs

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Roth IRA

FedChoice IRAs are insured up to $500,000!

How much can I contribute?

If you are under 50 years of age at the end of 2015: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,500 or the amount of your taxable compensation for 2015. This limit can be split between a traditional and a Roth IRA but the combined limit is $5,500. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).

If you are 50 years of age or older before 2015: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,500 or the amount of your taxable compensation for 2015. This limit can be split between a traditional and a Roth IRA but the combined limit is $6,500. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified AGI.

How does a Roth IRA work?

This savings plan gives you the ability to invest your after-tax dollars today, let the investment grow tax-deferred, and take qualifying withdrawals tax-free. Unlike the traditional IRA, there is no 70 1/2 age limit on making contributions. You simply need to have earned income equal to the amount you contribute up to a maximum of $5,500.00 ($11,000.00 combined for spouses) per year. (There are income thresholds which may reduce the amount you can contribute.)

Tax credits may be available

If you are an eligible individual and fall within certain income limitations, you may be eligible for a tax credit of up to 50 percent of your retirement savings contributions that do not exceed $1,000 (up to $2,000 if filing jointly). An eligible individual is defined as someone who is:

  • 18 years of age at the close of the taxable year
  • Not a dependent of another taxpayer
  • Not a full-time student

In addition, your Adjusted Gross Income must not exceed:

  • $50,000 if your filing status is married filing jointly
  • $37,500 if your filing status is head of household (with qualifying person), or
  • $25,000 if your filing status is single, married filing separately, or qualifying widow(er) with dependent child

When can the Roth IRA assets be used?

Two conditions must be satisfied to make tax-free and penalty-free withdrawals from the Roth IRA:

  • A Roth IRA must have been opened a minimum of five years
  • The withdrawal must be made after the occurrence of one of the following events:
    • Age 59 1/2
    • Death
    • Disability
    • First home purchase

Distributions which meet the above criteria are referred to as "qualified distributions." While you may take distributions from your Roth IRA at any time, distributions which are not qualified distributions will be subject to taxes (and in some cases early distribution penalties) to the extent they exceed your aggregate contributions to Roth IRAs.

Roth IRAs available from FedChoice

Fixed Term IRA Certificate

  • $500.00 minimum deposit
  • Available for 18 months
  • Available for 60 months

Already a member? Opening your new Savings Account is easy.
Just visit the nearest Financial Service Center or call us at
301.699.6151 • 800.969.6151.
Click here to find a convenient Financial Service Center location.

 

If You Have Taxable Compensation
and Your Filing Status Is...
And Your Modified
AGI Is...
Then...
married filing jointly or qualifying widow(er) Less than $181,000 you can contribute up to the limit.
married filing jointly or qualifying widow(er) at least $181,000 but less than $191,000 the amount you can contribute is reduced.
married filing jointly or qualifying widow(er) $191,000 or more you cannot contribute to a Roth IRA.
married filing separately and you lived with your spouse at any time during the year zero (-0-) you can contribute up to the limit.
married filing separately and you lived with your spouse at any time during the year more than zero (-0-) but less than $10,000 the amount you can contribute is reduced.
married filing separately and you lived with your spouse at any time during the year
$10,000 or more
you cannot contribute to a Roth IRA.
single, head of household, or married filing separately and you did not live with your spouse at any time during the year less than $114,000 you can contribute up to the limit.
single, head of household, or married filing separately and you did not live with your spouse at any time during the year at least $114,000 but less than $129,000 the amount you can contribute is reduced.
single, head of household, or married filing separately and you did not live with your spouse at any time during the year $129,000 or more you cannot contribute to a Roth IRA.

 

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