Thanks to the Taxpayer Relief Act of 1997, consumers now have more choices than ever when it comes to selecting an Individual Retirement Account (IRA). The different types of IRA's offer many benefits. We can help you determine which IRA may be right for you.

Roth IRA
The Roth IRA became available in 1998. While contributions are not tax-deductible, earnings will be distributed on a tax-free basis as long as the distribution is qualified. A qualified distribution must be made at least five years after the first contribution, and after the individual attains the age 59 1/2, unless due to death, disability, or for a qualified purpose (which includes first time home buyer expenses). Total annual contributions cannot exceed $4,000, or $5000 if you're over age 50.

Traditional IRA
A traditional IRA is still a great investment vehicle and is recommended for anyone that does not have a retirement plan. Individuals can make tax-deductible contributions of up to $4,000 annually, or $5000 if you're over 50. The earnings are tax-deferred until retirement, and penalty-free withdrawals are allowed for college or a first home. The Traditional IRA is best for middle income taxpayers not covered by a 401(K) and who anticipate their income tax bracket dropping after retirement.

Education Savings Account
This account must be used to pay for qualified higher education expenses of the beneficiary. Annual contributions are limited to $2,000 per beneficiary under age 18. Contributions are not tax-deductible and earning on the contributions will be tax-deferred until distribution.

Each of these accounts have ..

- No application or set-up fees
- No annual renewal fees
- Payroll deduction available
- Insurance per account up to $100,000 by the NCUA

You can open your MCCU IRA or Education Savings account with as little at $.01, and make contributions through direct deposit, payroll deduction or on your own schedule. IRA Dividends are compounded monthly. Some restrictions apply for early withdrawals. Contact our office or by email in the Online Services section.