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IRA Accounts

An IRA, or Individual Retirement Account, is a type of investment account that allows you to save money for retirement.

 

Please consult a tax professional for an interpretation of current figures, information and how these rules apply to you.

 

Traditional IRA Accounts

A Traditional IRA offers tax-deferred earnings and the possibility for tax-deductible contributions. Earnings in a Traditional IRA are not taxed until they are withdrawn. The ability to defer taxes on earnings, and to withdraw in a year when you may be in a lower tax bracket, can mean more after-tax dollars for your retirement.

These tax advantages make the Traditional IRA a powerful tool in creating a balanced, long-term savings plan.

 

Traditional IRA FAQ

  • Anyone 72 who earns compensation from employment (or who is filing jointly with a spouse who earns compensation). Contributions cannot exceed compensation.

  • If you are under age 50, your annual contribution limit is:
    $7,000.00 for both Tax Years 2024 and 2025.

    If you are age 50 and older, your annual contribution limit is:
    $8,000.00 for both Tax Years 2024 and 2025.

    Many people can deduct contributions on their tax returns. However, certain rules do apply.

  • In general, you must pay a 10% tax penalty on withdrawals before age 59½, but the early withdrawal tax does not apply in the following situations:

    Withdrawal of up to $10,000.00 for a first-time home purchase.
    Amount is used to pay for qualified post-secondary education expenses.
    Distribution is for medical insurance premiums during unemployment that lasts 12 weeks or longer.
    Distribution is to an owner who is disabled (as defined by the IRS code).
    Amount is used to pay for medical expenses in excess of 10% of Adjusted Gross Income (AGI).
    Payment is made to your beneficiaries after your death.
    Payment of a federal tax levy.

    Please consult a tax professional for a complete list of all exclusions.

  • You must begin receiving required minimum distributions from your Traditional IRA at age 72. The minimum distributions each year will be computed using an IRS formula.

    You are allowed to delay the first year's payment until April 1st of the following year, but you will receive two years worth of payments in that year if you choose to delay.

    Please consult a tax professional for an interpretation of current figures, information and how these rules apply to you.

 

ROTH IRA Accounts

Unlike Traditional IRAs, contributions to a Roth IRA are never tax-deductible. However, the money in your Roth IRA, including earnings, can be withdrawn tax-free. Of course, you must conform to certain tax requirements to get this tax-free advantage.

To be eligible for a Roth IRA at Fort Sill FCU, you must have a specific earned income amount and meet income requirements. The contribution limit for a Roth IRA is the same as a traditional IRA and is subject to annual adjustments by the IRS.

 

ROTH IRA FAQ

  • Anyone who earns compensation from employment (or who is filing jointly with a spouse who earns compensation) with income less than or within the applicable IRS limits. Contributions cannot exceed compensation.

  • If you are under age 50, your annual contribution limit is:
    $7,000.00 for both Tax Years 2024 and 2025.

    If you are age 50 and older, your annual contribution limit is:
    $8,000.00 for both Tax Years 2024 and 2025.

    Note: Contributions to a Roth IRA are never tax-deductible.

  • You can withdraw regular contributions without paying income tax at any time.
    There are two requirements to qualify for tax-free withdrawals of the income your Roth IRA has earned.
    The Roth IRA must meet the Five-Year-Test. In other words, it must be five years after the first year for which Roth contributions were made.One of the following conditions must apply:

    You are over age 59½.
    Funds are going to your beneficiary upon your death.
    You have become disabled.
    You are using the funds for a first time home purchase (lifetime limit $10,000.00 per person).

  • Unless an exception applies, earnings distributed before age 59½ are subject to the 10% early distribution tax.

  • No. Unlike the Traditional IRA on the Roth IRA you are not required to receive minimum distributions at age 72. If you don't need the cash, you can let your money continue to grow tax-free for as long as you like.

    Please consult a tax professional for an interpretation of current figures, information and how these rules apply to you.

 
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