What is a Roth IRA?
A Roth IRA is an individual retirement account which participants are able to make contributions after taxes. The earnings accumulated in an Roth IRA are tax free. Your retirement savings are insured to $250,000 by the National Credit Union Association.
 
How much can I contribute?
The amount qualified IRA owners are permitted to contribute has risen in 2008. Additional catch-up contributions can be made by qualified individuals over 50. After 2008. The contribution will be adjusted annually for inflation in $500 increments. If you qualify, you are permitted to annually contribute the following maximum amounts or 100% of your earned compensation and alimony; whichever is less:
Maximum Contributions Limits
Year    Under Age 50            Over Age 50
2007   $4,000                   $5,000
2008   $5,000                   $6,000 
Income Limitations
The following figures illustrate the increasing maximum income levels for single filers and couples filing jointly who are eligible to contribute the partial or full amount for their filing status.
2008               Full Contribution       Contribution if
                          under 50 limit           over 50 limit
Single Filer                $101,000                     $116,000 
Married                     $159,000                     $169,000 Jointly        
               
Can I convert my traditional IRA to a Roth IRA?
You may, provided you are a single filer or married couple filing jointly with a modified Adjusted Gross Income (AGI) that does not exceed $100,000. Any portion of the converted amount attributable to deductible contributions and earnings must be included as taxable income. The entire taxable amount of the conversion must be included as income for the year the conversion is made.
 
When can I withdraw from a Roth IRA?
“Qualified distributions” may be withdrawn tax and penalty free. “Non-qualified” distributions may be taxable and subject to an IRA 10% early distribution penalty.
To be considered a “qualified distribution” the following characteristics MUST apply: 
  • You have been a participant in the Roth IRA for over 5 years, beginning with the first year in which the account was converted or a contribution was made.
  • You have reached 59.5 or,
  • The distribution is paid to a beneficiary due to your death
  • The distribution is paid following your becoming permanently disabled.
  • The distribution is paid to your for the first time purchase of a home up to $10,000. 
The 10% IRS early withdrawal penalty will not apply to “non-qualified” distributions to which one or more of the following exceptions apply:
•You have reached 59.5
•The distribution is paid to a beneficiary due to your death.
•The distribution is paid following your becoming permanently and totally disabled.
•The distribution is used to pay for medical expenses in excess of 7.5% of your AGI.
•The distribution is used to pay for health insurance premiums if you have been unemployed 12 or more weeks.
•The distribution is used for the first time purchase of a home, up to $10,000.
•The distribution is used ot pay for qualified higher education expenses.
 
What is the deadline for opening a Roth IRA?
You can open or fund your IRA any time until your federal tax return is due. Normally, April 15 of the following year, excluding extensions.
Must I contribute every year?No. You are not required to contribute each year. 
If you have questions, please contact Sue Wix at 610-526-8631 or mailto:swix@mlhcu.org

  
Rate Schedule - September 2010
APR/APY
Account Type
Annual 
Percentage 
Yield
Minimum Balance to Earn the Stated APY/ Special Notes
Checking 
0.00%
No Fees
Share Savings Account
0.25%
Money 
Market 
Savings 
Account
0.20% 
0.30%
0.40%
0.50%
$2,000.00 $10,000$10,001 to $25,000$25,001 to $75,000
$75,001 to $500,000
Christmas Club
0.25%
Payroll Deduction-Matures Oct Each Year
Vacation Club
0.25%
Payroll Deduction-You set the maturity
Noahs Ark Savings
0.25%
Payroll Deduction
CU Retirement Income Account
2.19%
Payroll Deduction Only
Roth IRA
0.75%
1.92%
2 to 12 Months  
13 Months to 5 yrs
Traditional IRA
0.75%
1.92%
2 to 12 Months 
13 Months to 5 yrs
Coverdell IRA
2.02%
Payroll Deduction and/or Lump Sum
Certificates *annual
percentage
yield
3 mos. 0.35
6 mos. 0.45%
9 mos. 0.75% 12mos. 0.85% 15mos. 1.19% 18mos. 1.29% 24mos. 1.69% 30mos. 1.78% 36mos. 2.37% 48mos. 2.71%
60mos. 2.22%