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Individual Retirement Accounts

If retirement seems like it's light years away, that's when you know it's time to start planning for it! You're already thinking about it, and that's step one. The second step is opening a Traditional or Roth IRA from Magnolia FCU.

We offer many different options so you can choose the account that best fits your needs and long-term goals. Start building a secure financial future now, so you can step out of the time machine and high-five yourself in the distant future.

Summary
  • Competitive dividends above standard savings rates
  • Traditional and Roth IRA options
  • No setup fees
  • No monthly or annual maintenance fees
  • $5,500 annual contribution limit (as of 2014)
  • Additional $1,000 "catch-up" contribution allowed for ages 50+
  • No minimum deposit to open
  • Balances of $1,000 & over can be invested in IRA Share Certificates to earn even more
Traditional vs. Roth IRA

Traditional IRA

  • No income limits to open
  • No minimum contribution requirement
  • Contributions are tax deductible on state and federal income tax*
  • Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
  • Withdrawals can begin at age 59 ½
  • Early withdrawals subject to penalty**
  • Mandatory withdrawals at age 70 ½

Roth IRA

  • Income limits to be eligible to open Roth IRA***
  • Contributions are NOT tax deductible
  • Earnings are 100% tax free at withdrawal*
  • Principal contributions can be withdrawn without penalty*
  • Withdrawals on dividends can begin at age 59 ½
  • Early withdrawals on dividends subject to penalty**
  • No mandatory distribution age
  • No age limit on making contributions as long as you have earned income

*Subject to some minimal conditions. Consult a tax advisor.

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

***Consult a tax advisor.

Coverdell ESA

Coverdell Education Savings Account (ESA)

  • Set aside funds for your child's education
  • No setup or annual fee
  • Dividends grow tax-free
  • Withdrawals are tax-free and penalty-free when used for qualified education expenses*
  • Designated beneficiary must be under 18 when contributions are made
  • To contribute to an ESA, certain income limits apply**
  • Contributions are not tax deductible
  • $2,000 maximum annual contribution per child
  • The money must be withdrawn by the time he or she turns 30***
  • The ESA may be transferred without penalty to another member of the family
  • No minimum deposit to open

*Qualified expenses include tuition and fees, books, supplies, board, etc.

**Consult your tax advisor to determine your contribution limit.

***Those earnings are subject to income tax and a 10% penalty.