Individual Retirement Accounts (IRAs)
traditional IRAs
One of the biggest challenges you may face is the effort to build financial security for
retirement. With uncertainty over the ability of Social Security to meet your needs,
you will be forced to rely more on your own resources to support your retirement lifestyle.
traditional IRAs offer you an opportunity for tax-deferred earnings and growth.
This account is available in Deposit and
Investment* IRAs.
Who is eligible?
You can start contributing if you are under the age of 70 1/2 for the year that the
contribution is being made (or if you have earned income from employment equal to or
greater than your IRA contribution).
How much can I contribute?
In 2005 the annual contribution limit increased to $4,000 or 100% of earned income,
whichever is less.
try our traditional
IRA calculator to see how your IRA could perform.
What are the withdrawal requirements?
Beginning in the year that a IRA holder turns 70 1/2 years old, distributions from an
IRA must begin. Since the purpose of an IRA is to provide for retirement--not to be a
tax shelter--IRA holders failing to take their required distributions are subject to a
heavy penalty.
Income thresholds for traditional IRA tax deductibility:
If you are covered by a qualified retirement plan, the amount you can deduct as a
contribution to your traditional IRA will be reduced if your income exceeds certain levels.
The table below provides the income levels from 2003 - 2007 from which the amount you can
deduct starts to be reduced.
| Tax Year |
Single Filer |
Married, Filing
a joint Tax Return |
| 2003 |
$40,000 - $50,000 |
$60,000 - $70,000 |
| 2004 |
$45,000 - $55,000 |
$65,000 - $75,000 |
| 2005 |
$50,000 - $60,000 |
$70,000 - $80,000 |
| 2006 |
$50,000 - $60,000 |
$75,000 - $85,000 |
| 2007 |
$50,000 - $60,000 |
$80,000 - $100,000 |
Invest in your future today.
A new tax law provides some very nice benefits to individuals who are saving for
retirement. We hope you're among that group. Click
here for more information about the Economic Growth and Tax Relief Reconciliation Act of 2001.
For more information about opening an Individual Retirement Account at Northwest
Community CU, visit your nearest branch
location and talk to an Advisor. Or,
send an eMail to our Phone Branch.
Back to IRAs Explained
*Securities are offered and sold by Northwest Financial Resources, and are not
insured, may lose value, and have no credit union guarantee.