IRA ACCOUNTS

Your Savings Nest Egg Begins Here!
Getting the most out of your retirement means getting the most out of your retirement funds. An IRA account is a terrific way to make this happen.

Whether you're in the market for a Roth, Traditional, or Education IRA, LFCU offers them all. With high yields and flexible terms to fit your short and long term goals, our IRA accounts are certain to help make your retirement an enjoyable one.

Traditional IRA
An IRA is a smart way to save for retirement because the amount you contribute may be 100% tax-deductible, depending on your income and access to a retirement plan through work. If your workplace offers a 401(k), defined benefit or other tax-qualified retirement plan, your annual IRA contribution may or may not be tax-deductible. However, your IRA contributions and earnings will grow tax-deferred until withdrawal.

You can contribute to a Traditional IRA up to the year you turn age 70 1/2, at which time you must begin taking required minimum distributions from the account.

You can take penalty-free withdrawals from your IRAs once you reach age 59 1/2 or meet the circumstances listed below. Please note the amount you withdraw will be taxed as ordinary income at that time:

• The account holder has passed away (the distribution must go to a beneficiary or the account holder's estate)
• The account holder is permanently disabled
• The distribution is used for a qualified first-time home purchase (up to $10,000)

For the 2007 tax year, you can open an IRA with up to $4,000, or $5,000 if you are age 50 or over. Enjoy the peace of mind knowing your IRA balances are federally insured to $250,000 by the NCUA, a U.S. government agency. Click here for current rates. To open an IRA account today call (800) 328-LFCU.

Roth IRA
Beat the taxman in retirement. With a Roth IRA, you will pay no taxes on dividends or earnings and you're not forced to take distributions at age 70 1/2. Plus, unlike a Traditional IRA, you can continue to make contributions beyond that age. This means you can pass on more to your heirs. Unfortunately, not everyone is eligible to open a Roth IRA. Once your adjusted gross income reaches $95,000 if you're single or $150,000 if you're married, the amount you can contribute to a Roth IRA begins to decrease, reaching zero for those with an adjusted gross income of $110,000 (singles) or $160,000 (married). Contribution limits are the same as a Traditional IRA.

To avoid penalties, you must leave your funds in your IRA for at least five years.

Coverdell Education Savings Account
With college tuition on the rise, an Education Savings Account (ESA) is a great way to save for a child's future. An ESA allows tax and penalty free earnings when the money is used to pay for qualified primary, secondary, and higher education expenses. Grandparents, aunts, uncles and even friends may contribute to an account for any child who is under age 18.

Coverdell Education Savings Account Benefits:

• Contribute up to $2,000 per year for each child under 18
• The amount you contribute is not impacted by contributions you make to a Traditional IRA, Roth IRA, or employer-sponsored retirement savings plan
• If the plan is owned by a parent, it's considered a parental asset and therefore has a minimal effect on the amount of financial aid available to the child
• The contributions grow tax-free and the funds can be withdrawn tax-free as long as they are used to pay eligible schooling costs
• You are eligible to contribute if you're adjusted gross income is less than $95,000 if filing as single taxpayer, or $190,000 if married filing jointly. Limited contributions are allowed for single taxpayers earning up to $110,000 and married couples making up to $220,000

To learn more, please visit any branch or call (800) 328-LFCU.