Individual Retirement Accounts
At FreeStar Financial Credit Union, we want to help you save the money you need for a comfortable future through investing in an Individual Retirement Account. An IRA is a tax-advantaged savings plan built around your individual needs. It's easy to start, affordable, and can make a world of difference in retirement living.
We offer Traditional, Roth, and Coverdell IRAs with varied deposit options. For your convenience deposits can be made by mail, in person, virtual branch, or by payroll deduction.
IRA account dividends are calculated daily and posted quarterly. On IRA certificates dividends are calculated daily and posted monthly.
If you’re under age 70½ and earn compensation, you can put up to $5,500 (individuals younger than 50) or $6,500 (individuals age 50 and older) or your taxable income for the year in a traditional IRA, even if you don’t qualify for a tax-deduction. Your earnings and deductible contributions aren’t taxed until withdrawal, which can begin at 59 ½ without penalty, but must begin at age 70 ½. Funds can be used penalty free for a first-time home purchase ($10,000 limit), higher-education expenses, certain medical expenses, and other qualifying reasons.
Contributions to this account are subject to Modified Adjusted Gross Income limits. You can contribute up to $5,500 (individuals younger than 50) or $6,500 (individuals age 50 and older) or your taxable income for the year with after-tax dollars. You have access to your regular contributions tax-free and penalty-free at any time, and for any reason. Qualified withdrawals, including earnings, are tax-free. As in a traditional IRA, funds are available penalty free for a first-time home purchase, educational, medical expenses, and certain other qualifying reasons. There are no mandatory withdrawals, so you could leave money to your heirs tax-free.
There are a number of benefits to a Coverdell ESA. You may be able to save up to $2,000 per child per year in a Coverdell Education Savings Account (ESA) here at FreeStar Financial CU. While your contributions are made with after-tax dollars, the earnings and withdrawals are tax-free if the money is used for qualified educational expenses. Any of your family members may be able to contribute to the account, up to the $2,000 total annual limit. You can continue saving each year until the child reaches 18. When the money is withdrawn, it can be applied to a broad range of qualified expenses for college, university and public or private K-12 education – including tuition, tutoring, room and board, and in some cases, even computer equipment. A unique Coverdell ESA feature is your ability to transfer funds from one child’s account to another child’s account in the same family.
For the answers to all of your IRA questions, call one of our IRA Specialists today at (586) 466-7800.
This article is not intended to provide tax advice. Members should consult a tax advisor to determine the right IRA for their needs