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Summary

Right now, thanks to the biggest tax cut in 20 years, retirement plans are more powerful. You're eligible to contribute more to individual retirement accounts (IRAs) then ever before. With an IRA, you can invest your money with Northern FCU and establish a retirement plan.

You can have more than one IRA, even two accounts of the same type. But the more you have, the more you have to manage, so experts recommend keeping the number of accounts to a minimum. Rolling over an existing IRA from another financial institution to Northern FCU is easy and convenient. Call us!

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Limits

New IRA Contribution Limits!

Up from $3,000 a year to $4,000 a year in 2005 to 2007; and $5,000 a year in 2008-2010. The limit will be adjusted annually for inflation in $500 increments starting in 2009. Those age 50 and older have a catch-up option - an extra $1,000 a year starting in 2006 and thereafter.

Types

There are three kinds of IRAs - Roth, Traditional, and Educational. Talk to one of our helpful financial services representatives to see which one fits your financial needs.

Roth IRAs:

• Contributions are allowed at any age
• The money, including earnings, can be withdrawn tax-free
• Flexible withdrawal options are available

Traditional IRAs:

• Earnings accumulate tax-deferred
• Contributions are tax-deductible if you qualify
• The amount you can contribute is increasing

Educational IRAs:

• Coverdell Educational Savings Accounts (ESAs) can be used to pay for your child's education expenses, such as tuition, fees, books, supplies, and equipment
• Earnings grow tax-free when distributions are used for qualified education expenses

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