Deposit Rates                Join Us (Eligibility)

Plan for the retirement you have always dreamed of while you save on income taxes today with a safe and secure Traditional Share IRA, IRA Certificate, or Roth IRA . Traditional IRAs are more attractive than ever due to expanded income limits allowing more people to make tax-deductible contributions. And although contributions to the Roth IRA are not tax deductible, they do offer the opportunity for tax-free earnings. Please refer to this quick reference for key differences among the Traditional and Roth IRAs. (East Texas Professional Credit Union if not authorized to offer tax advice. Please consult a tax professional.)

Traditional IRA (Share or Certificate)
    Who Is Eligible to Contribute?
  • Anyone under 70½ years of age who has compensation income (or is filing jointly with a spouse earning compensation)
    How Much Can Be Contributed?
  • $3,000 for 2002 – 2004
  • $4,000 for 2005
  • Higher limits if age 50 or older
  • Contributions cannot exceed compensation
  • Reduced by contributions to Roth IRAs
    Who Can Make Tax Deductible Contributions?
  • Fully deductible contributions:
    -- Single individuals not active in employer retirement plans, regardless of income
    -- Single individuals active in employer retirement plans with modified adjusted gross income of $44,000 or less (tax year 2002)
    -- Married couples with neither spouse active in an employer retirement plan (regardless of income)
    -- Married individuals active in employer retirement plans with joint tax returns showing modified adjusted gross income of $64,000 or less (tax year 2002)
    -- Married individuals not active in employer retirement plans with spouses who are, as long as modified adjusted gross income is $160,000 or less (tax year 2002)
  • Individuals with incomes exceeding the above limits may be able to deduct a lesser amount than the amount that can be contributed
    What Are Some Tax Advantages?
  • Earnings increase tax-deferred until withdrawn
  • Contributions may be tax deductible
    When Can Withdrawals Be Made Without Restrictions?
  • Qualified higher education expenses
  • 1st time home purchase (lifetime limit for exemption is $10,000)
  • Age 59½
  • Disability
  • Qualified medical expenses exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon IRA owner’s death
  • Payment of health insurance premiums while unemployed 12 weeks or more

Roth IRA
    Who Is Eligible to Contribute?
  • Anyone who has compensation income (or is filing jointly with a spouse earning compensation) with the following modified adjusted gross income:
    -Up to $95,000 (single filers)
    -Up to $150,000 (joint filers)
  • Reduced contributions allowed for higher income categories (up to $110,000 for single filers and $160,000 for joint filers)
    How Much Can Be Contributed?
  • $3,000 for 2002 – 2004
  • $4,000 for 2005
  • Higher limits if age 50 or older
  • Contributions cannot exceed compensation
  • Reduced by contributions to traditional IRAs
    Who Can Make Tax Deductible Contributions?
  • No one can deduct contributions
    What Are Some Tax Advantages?
  • Regular contributions can be withdrawn tax and penalty free any time
  • Once the account has been open five tax years, earnings can be withdrawn tax and penalty free for any of the following reasons:
    -Age 59½
    -Disability
    -Death
    -1st time home purchase (lifetime limit for exemption is $10,000)
    When Can Withdrawals Be Made Without Restrictions?
  • Earnings are tax-free once the account has been open five tax years and withdrawals are made for qualified reasons:
    -Age 59 ½
    -Disability
    -Death
    -1st time home purchase (lifetime limit for exemption is $10,000)
  • Not required to start withdrawals at age 70½

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