Retire like a boss with PMFCU IRA accounts. Enjoy tax-deferred, dividend income and the ability to save for your family’s future with our federally insured Individual Retirement Accounts.
PMFCU offers the following retirement accounts for members:
A few facts about Roth IRAs:
- If you are employed and have earned income, you can make contributions to a Roth IRA, even after turning age 70½
- Unlike a traditional IRA, a Roth IRA doesn’t require you to take required minimum distributions when you turn age 70½
- Participation in an employer-sponsored retirement plan has no bearing on your eligibility for a Roth IRA
- Since no annual required minimum distributions apply during your lifetime, you can let your savings accumulate tax free much longer — and on your schedule
- You must meet income limits to make contributions
A Roth IRA may be a good choice for a member if:
- You anticipate being in a higher tax bracket when you retire
- You do not get a tax deduction for Traditional IRAs
- You are young and have several years before obtaining the age of 59½ is a way off and you want to take distributions from an IRA
A few facts about Traditional IRAs:
- You must be less than 70½ years old and have received compensation to qualify for making an IRA contribution
- You are automatically eligible for a tax deduction if neither you, nor your spouse, are covered by an employer-sponsored retirement plan and your MAGI is under IRS limits
- In addition to the up-front tax break, money in a traditional IRA accumulates tax-deferred
- When you take distributions, both your deductible contributions and earnings will be taxed at your regular income tax rate
A Traditional IRA is a good choice for a member if:
- Your income is too high for a Roth IRA
- No Income Documents required
- No Credit Check
- No Prepayment Penalty
Coverdell Education Savings Account provide members another alternative to save for a child’s education.
- Earnings on a Coverdell ESA grow tax-free until withdrawn to pay for qualified expenses
- Withdrawals for certain qualified education expenses are tax-free
- Qualified education expenses include tuition, fees, books, computer equipment and technology required for elementary, secondary and post-secondary education
- A beneficiary may receive tax-free distributions from a Coverdell ESA in the same year he or she claims the Lifetime Learning or HOPE Scholarship tax credits
- No one can deduct contributions
You cannot contribute to a Coverdell ESA if your income is over $220,000 and you are married and file a joint return ($110,000 for single filers).
Anyone who has MAGI: (Modified Adjusted Gross Income from the Federal Tax Form)
- Up to $95,000 for single filers
- Up to $190,000 for joint filers Some people with higher MAGI may be able to make smaller contributions
- Contributions not allowed after the beneficiary reaches age 18 (except for specials needs beneficiaries)
The designated beneficiary is the individual named in the document that creates the trust or custodial account who will receive the benefit of the funds in the account.
Qualified education expenses are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution and include tuition and fees, the cost of books, supplies, and equipment, the amounts contributed to a qualified tuition program and, if the student is enrolled at least half-time, the cost of room and board. You can also use withdrawals from a Coverdell ESA for certain elementary and secondary education expenses.
Withdrawals are tax-free and penalty-free only for qualified education expenses (earnings are subject to tax and penalty for most other withdrawals)
Funds can be transferred from one child’s account to an account for another child in the family.
Eligible Educational Institutions
Eligible educational institutions are any college, university, vocational school, or other post-secondary educational institution eligible to participate in student aid programs administered by the United States Department of Education and elementary and secondary education institutions.
Total Contributions Limit
There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. However, total contributions for the beneficiary cannot be more than $2,000 no matter how many accounts have been established. Limit applies to all Coverdell Education Savings Accounts (ESA) for the same child.
Generally, when a Coverdell ESA is established, the designated beneficiary must be under age 18. The designated beneficiary can be 18 or older if he or she is a special needs beneficiary. Amounts in a Coverdell ESA must be withdrawn when the designated beneficiary reaches age 30.