Have you considered an IRA?
Make Convenient And Consistent Contributions Through Payroll Deductions. Contribute The Maximum Amount By Making Smaller, Regular Payments.
Contact The Credit Union To Set Up Your Payroll Deductions Today!!
IRA Comparison Chart 2018
ROTH IRA
TRADITIONAL IRA
Who can contribute?
Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following MAGI*
Up to $120,000 (single filers)
Up to $189,000 (joint filers)
Reduced contributions allowed for higher incomes (up to $135,000 for single filers and $199,000 for joint filers)
Anyone under age 70 ½ who has income from compensation (or is filing jointly with a spouse who earns compensation)
Anyone who has received a distribution from a qualified retirement plan and decides to move the proceeds of the plan into an IRA
How much can I contribute?
Traditional IRA
$5,500 for 2017
$6,500 if age 50 or older by the end of 2017
Contributions cannot exceed compensation
Roth IRA
$5,500 for 2017
$6,500 if age 50 or older by the end of 2017
Contributions cannot exceed compensation
Who can make deductible Contributions?
No one can deduct contributions
Deductible up to annual contribution limit
Single individuals not active in employer retirement plans
Single individuals active in employer retirement plans with MAGI* of less than $63,000 for 2018
Married couples with neither spouse active in an employer retirement plan
Married individuals active in employer retirement plans with joint tax returns showing MAGI* of less than $101,000 for 2018
Married individuals not active in employer retirement plans with spouses who are, as long as MAGI* is $189,000 or less
What are the tax advantages?
Regular contributions can be withdrawn tax-and penalty-free at any time
Earnings are tax-deferred and withdrawals are tax-free after the account has been open five tax years, earnings can be withdrawn for any of these qualified reasons: age 59 ½, disability, death, or first time home purchase**
Not required to start withdrawals at age 70 ½
Earnings grow tax-deferred until withdrawn
Contributions may be tax-deductible
When can I withdraw without restrictions?
Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59 ½, disability, death, or a first time home purchase**)
Withdraw penalty-free for any of the following reasons:
- Qualified higher-education expenses
- First-time home purchase**
- Age 59 ½
- Disability
- Qualifying medical expenses exceeding 7.5% of adjusted gross income
- Payment to beneficiaries upon the owner’s death
- Payment of health insurance premiums while unemployed for 12 weeks or longer
** Lifetime limit for exception on a first-time home purchase is $10,000
*** Formally known as the Education IRA
NOT INTENDED AS TAX ADVICE. PLEASE CONSULT A TAX PROFESSIONAL.
Traditional IRA Contributions for 2018
| Deductibility Phase-out ranges for Regular Roth IRA Contributions | ||||
| Tax Year |
Single or Head of Household who is an active participant * | Married Couple | ||
| Owner is Active Participant * | Owner NOT an active participant Spouse is active participant * | |||
| Joint Return | Individual Returns | |||
| Individual MAGI | Joint MAGI | Individual MAGI | Individual or Joint MAGI | |
| 2014 | $60,000 – $70,000 | $96,000 – $116,000 | $0 – $10,000 | $181,000 – $191,000 |
| 2015 |
$61,000 – $71,000 | $98,000 – $118,000 | $0 – $10,000 | $183,000 – $193,000 |
| 2016 | $61,000 – $71,000 | $98,000 – $118,000 | $0 – $10,000 | $184,000 – $194,000 |
| 2017 | $62,000 – $72,000 | $99,000 – $119,000 | $0 – $10,000 | $186,000 – $196,000 |
| 2018 | $63,000 – $73,000 | $101,000 – $121,000 | $0 – $10,000 | $189,000 – $199,000 |
A single filer who is an active participant for the year can deduct all Traditional contributions regardless of income. For married filers, if neither spouse is an active participant, they can each deduct all Traditional contributions regardless of income.
MAGI Limits for Regular Roth Contributions for 2018
| MAGI Limits for Regular Roth IRA Contributions | ||
| Filing Status | Income limit for Full Contribution | Phase-out Range (Partial Contribution) |
| Single | Up to $120,000 | $120,000 – $135,000 |
| Married, filing jointly |
Up to $189,000 | $189,000 – $199,000 |
| Married, filing separately | $0 | $0 – $10,000 |