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Money Market | Certificates | Comparison of the Roth & Traditional IRA | Miscellaneous Services
- Membership Shares is a required savings account and it establishes you as a member-owner of the Credit Union.
- Withdraw any time without dividend loss
- $50 minimum balance to avoid $3 per month access fee
- Dividends paid on daily balance and compounded quarterly
- Secondary Shares or the "you name it" account allows you to maintain several separate account balances under your account number for budgeting purposes like taxes, vacation, college or any rainy day account.
Christmas Accounts help you save for the Christmas holiday throughout the year.
- No periodic payments required
- Regular payroll deductions help build this fund
- Dividends are paid on daily balances and posted quarterly
- NO penalties for early withdrawal
Money Market Shares are not a time deposit and can be withdrawn without penalty at any time. Up to three checks per month can be written against the account.
- Earn variable, Money Market rates
- Dividends posted (compounded) monthly
- Withdraw any time without dividend loss
- Add to the account any time
- Requires a $2,000 balance to receive higher Money Market rates
Check the current MSEFCU saving rates
Certificates represent a contract between you and the Credit Union affirming that, if you leave the funds on deposit for a stated period of time, the Credit Union will pay you a stated interest rate.
- Terms from 3 to 60 months
- Minimum deposit
- $1,000 on 3 to 6 months
- $500 on all others
- Notice of maturity
- Renewal is automatic unless we hear from you
- 10 day grace period after renewal for redemption without penalty
- Interest payments are compounded or paid to you monthly
- Penalty is suffered if you withdraw principal prior to maturity
Check the current MSEFCU certificate rates
Traditional IRA & Roth IRA Side by Side Comparison
Am I eligible to contribute?
Traditional IRA: Individuals who are under 70 ½ years of age for the entire tax year and who have earned compensation or have received alimony may contribute to a Traditional IRA
Roth IRA: Unlike a Traditional IRA, Roth IRA participants may continue to make contributions after they have reached age 70 ½. Individuals who have earned compensation or have received alimony may contribute to a Roth IRA provided their income falls within the following guidelines:
Full Contribution if your AGI is less than:
Partial Contribution if your AGI is less than:
Single Filer
$95,000
$95,000 - $110,000
no contribution if over $110,000Married Filing Jointly
$150,000
$150,000 - $160,000
no contribution if over $160,000
How much can I contribute annually?
Traditional & Roth IRAs: Starting in taxable years after December 31, 2001, the amount qualified IRA owners are permitted to contribute annually to their Traditional or Roth IRAs will be gradually increased to $5,000. After 2008, the contribution limit will be adjusted annually for inflation in $500 increments. Additional catch-up contributions can be made by qualified individuals over fifty in the amount of up to $500 per year.
Qualified participants are permitted to annually contribute the following maximum amounts or 100% of their earned compensation and alimony; whichever is less:
Maximum Contribution Limits
Year
Under Age 50
Over Age 50
2004
$3,000
$3,500
2005
$4,000
$4,500
2006
$4,000
$5,000
2007
$4,000
$5,000
2008
$5,000
$6,000
Spousal IRA rules enable married couples filing jointly to contribute the maximum amount to their separate Traditional or Roth IRA accounts even if one spouse has little or no earned income. To qualify, their combined earned income must be equal to or greater than the total contributed amounts.
Are my contributions tax deductible?
Traditional IRA: Contributions to a Traditional IRA are fully deductible if neither you nor your spouse is an active participant in an employer sponsored retirement plan regardless of income level. If you participate in an employer sponsored retirement plan, your income and filing status will determine the amount of your contribution that is deductible from taxes:
Single Person Filing Individually
(Contributor is an active participant in an employer sponsored retirement plan)Tax Year
Maximum Level for Full Deduction
Maximum Level for Partial Deduction
2005 - 2010
$50,000
$60,000
Married Couple Filing Jointly
(Contributor is an active participant in an employer sponsored retirement plan)Tax Year
Maximum Level for Full Deduction
Maximum Level for Partial Deduction
2005
$70,000
$80,000
2006
$75,000
$85,000
2007 - 2010
$80,000
$100,000
If you are not an active participant in an employer sponsored retirement plan, but your spouse is, the deduction of your contribution is determined by the following:
Married Couple Filing Jointly
(Spouse is an active participant in an employer sponsored retirement plan)Tax Year
Maximum Level for Full Deduction
Maximum Level for Partial Deduction
2004 - 2010
$150,000
$160,000
Note: Married taxpayers filing single returns may not deduct any portion of their IRA contribution, regardless of income, if one spouse participates in an employer-sponsored retirement plan.
Roth IRA: Contributions to a Roth IRA are not tax deductible.
Will I receive Tax Free Distributions?
Traditional IRA: You must pay income tax on distributed amounts from a Traditional IRA attributable to deductible contributions and earnings.
Amounts withdrawn prior to age 59 ½ are also subject to an additional 10% early withdrawal tax unless one of the following exceptions applies to the distribution:
- made due to death or disability
- made in the form of certain periodic payments,
- used to pay medical expenses in excess of 7.5% of AGI
- used to purchase health insurance for unemployed individuals,
- used for education expenses of the IRA owner, spouse, or child (tuition, fees, room & board, books, supplies and required equipment)
- toward the purchase of a home for the first-time home buyer
- (a buyer who has not owned a home in the last two years)
- Lifetime limit of $10,000 per person
- First-time buyer can be the IRA owner, spouse, child or grandchild
- Applies to distributions made in 1998 or later
Roth IRA: You will receive your qualified distributions tax and penalty free provided:
1) The distribution is principal only
2) The distribution of earnings is made after the 5-year taxable period beginning with the first taxable year in which a Roth contribution was made.
3) and the distribution was made:
- after the recipient has reached age 59 ½ or,
- due to permanent disability or,
- to a beneficiary in the case of death or,
- for first-time home buyer's expenses, up to $10,000.
Unqualified distributions of earnings are includible in income and subject to the 10% early withdrawal tax, unless one of the exceptions listed under Traditional IRAs applies.
Is my IRA insured?
If the IRA is deposited in the credit union, both Traditional & Roth IRA investments are eligible for insurance by an agency of the Federal Government up to $250,000 and for an additional $250,000 by Excess share Insurance Company. All IRA accounts can be fully insured separately from any other non-retirement accounts you may have with us.
This information presented is not intended to provide specific advice or recommendations. We recommend that you consult your attorney, tax or financial advisor with regards to your personal situation.
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Marion School Employees Credit Union
765-674-6631 Toll Free 1-877-MSEFCU4 (1-877-673-3284)
PAT # 664-2700 or 1-800-597-5707
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We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act 12 CFR 701.31(d)(1)(i)
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