• It used to be that when folks talked of an IRA, they were referring to exactly that: an Individual Retirement Account.
• While an IRA is still one of the best ways to plan for those post-employment "golden" retirement years, you can now use an IRA to help plan for some of life's other major events...the purchase of a first home...your children's college education...a medical disability. Depending on your needs, one (or more) of Northwest Hills Credit Union's federally insured IRA options may be right for you!

• ● Which IRA is Right for You?
  ● Determine Your IRA Deduction
  ● Rollovers or Transfers?
  ● It's Easy to Get There!
  ● Distinguishing Features of IRAs

• Which IRA is Right for You?

• Roth IRA | Traditional IRA
• As with all financial investment decisions, an informed consumer is a savvy one. For many people, the primary distinction between using a Roth IRA and selecting a Traditional IRA depends upon where you believe your tax liability to be greatest: now or at retirement. Does your tax filing situation benefit from having tax-deferred interest on your savings now? Or do you anticipate that your future tax bite during retirement years might be even bigger and, hence, want to reduce that future liability?
• If you are nearer to the beginning of your working career and haven't yet purchased your first home, the Roth IRA provides a viable option.
• Roth IRA
  This IRA is similar to a Traditional IRA in that it allows contributions up to $4,000 per year (for 2005-2007). However, instead of providing a tax deduction, you earn interest tax-free and pay no taxes when the money is ultimately withdrawn. Funds may be withdrawn provided that they have remain untouched in the account for at least five years and one of the following criteria applies: you reach age 59 1/2, you become disabled, you purchase your first home (up to $10,000), or you die (funds paid to your beneficiary).
• Additionally, a Roth IRA can continue to accumulate beyond age 70 1/2 (the age at which a Traditional IRA mandates you begin to withdraw funds annually); mandatory withdrawals are not required.
• If you are a married couple filing jointly, you may contribute up to $4,000 (for 2005-2007) for income levels up to $160,000; this gradually decreases to zero by the time an income level of $170,000 is reached. For those filing singly, the limit of $4,000 (for 2005-2007) extends to a $95,000. From this point, it decreases to zero at the $110,000 income level.
•  
  Traditional IRA
  This IRA delivers money-saving benefits today and for the future. For members who qualify, it offers a tax deduction and provides a tax shelter that can help you build substantial savings for retirement. Financial experts agree that you will need approximately 60-70% of your final salary to maintain your standard of living during your retirement years.
• As a result of the Taxpayer Relief Act of 1997, a working spouse not already covered by an employer retirement plan can contribute up to $4,000 (for 2005-2007) to an IRA, which is fully deductible from taxable income. A non-working spouse can contribute up to $4,000 (for 2005-2007) to an IRA as well, even if the spouse is covered under a plan. Withdrawal penalties before age 59 1/2 have been eliminated for qualifying special purposes (i.e., higher educational expenses for self, spouse, child, or grandchild). Finally, adjusted gross income limits have been increased for a fully deductible IRA.
• Back to Top
  Determine Your IRA Deduction
  If you do not participate in a pension or other qualified plan, such as a 401(k), you may deduct your entire $4,000 Traditional IRA contribution. If you do participate in a pension or qualified retirement plan at work, you may be able to deduct a portion of your IRA contribution.  
• Mix and Match Your IRAs
  Depending upon your investment needs and tax strategy, you may wish to choose more than one IRA. Each qualified individual may contribute up to $4,000 per year, in total, to one or more IRAs-i.e., contribute $2,000 to a Traditional IRA and $2,000 to a Roth IRA. In addition, Education IRAs may also be established, even after you've contributed $4,000 to a Traditional or Roth IRA.
   

• Distinguishing Features of Individual Retirement Accounts
  Each Member account is federally insured to at least $100,000 by the National Credit Union Administration, a U.S. Government agency