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IRAs

Traditional IRA

FedChoice IRAs are insured up to $500,000!

A Traditional IRA is a tax-advantaged arrangement that allows earnings and deductible contributions to grow tax-deferred. That means you don't pay income taxes on the earnings and deductible contributions of your IRA until you begin taking withdrawals, usually after you retire and are likely to be in a lower tax bracket.

Tax advantages

Contributions may be deductible from your gross income on your federal income tax return for the year in which the contributions are made. Earnings grow on a tax-deferred basis. Deductible contributions and earnings are subject to federal income tax when withdrawn.

Eligibility requirements

You must not attain the age of 70½ during the year you contribute to a Traditional IRA. You must also have earned income (compensation) in order to contribute to a Traditional IRA.

2014 Annual contribution limits

In tax year 2014, you can make annual contributions to a Traditional IRA of up to $5,500 or 100% of your earned income, whichever is less. An aggregate of $11,000 can generally be contributed per married couple ($5,500 per IRA) provided that either you or your spouse has earned income of at least that amount. The $5,500 and $11,000 annual contribution limits apply to the combination of all of your Traditional and Roth IRAs. If you are age 50 or over, you may make additional "catch-up" contributions to your IRA.

2015 Annual contribution limits

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.

Effective January 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.  Below are a few exceptions:

  • Trustee-to-trustee transfers between IRAs are not limited.
  • Rollovers from traditional to Roth IRAs ("conversions") are not limited.

For more information, check out our IRA Service Center to:

  • Learn About IRAs: Make an informed decision about your retirement with complete descriptions of the Traditional, Roth and Coverdell ESAs.
  • Open an IRA: This section provides the documents you need, supported with online help, to open a Traditional, Roth or Coverdell ESA.
  • Service an Existing IRA: IRA transactions couldn't be easier. Simply follow the onscreen instructions to make quick and easy transactions.

One of the biggest benefits that attracts people to a traditional IRA is that some or all of their contributions may be tax deductible. Keep in mind that you must have earned income and be under age 70-1/2 to contribute to a traditional IRA. Additionally, you will be required to take minimum distributions from your account beginning at age 70-1/2.

You may add to any of your Individual Retirement Account Certificates during its term without affecting the maturity date. This makes them ideal for automatic payroll allotment.

Traditional 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.

 

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