IRA's

Whether you are looking to save money for your secure retirement or set aside funds for the education of a child or loved one, the new IRA provisions of the recently enacted tax bill will benefit you.

New Changes...

Annual IRA Contribution Limits have increased. Starting in 2002, the amount qualified IRA owners are permitted to contribute annually to their IRAs will be increased to 3,000. Annual contribution limits will also continue to increase to $5,000 by 2008.

Maximum Contribution Limits

Taxable Year 2009 $5,000.00

Additional Catch-Up Contributions can be made by individuals over Fifty. Qualified individuals who are fifty years of age or older will be permitted to contribute even more money to their IRAs

Maximum Contribution Limits for

Members Fifty and Over

Taxable Year 2009 $6,000.00

Increase in the amount of money a beneficary may receive in their Education IRA. Beginning in 2002, the limit for annual contributions that a beneficiary may receive to one or more Education IRAs has been raised from $500 to $2,000.

What is a Traditional IRA?

Who can open a Traditional IRA?

Anyone under the age of 70 ½ with earned income.

How much can be contributed to the Traditional IRA?

Beginning in 2002, a combined total of $3,000 per year may be contributed to the traditional IRA and Roth IRA or 100% of earned compensation, whichever is less. Also, the maximum contribution allowed will be periodically increased to $5,000 by the tax year 2008.

What are the benefits of the traditional IRA?

Contributions to the accounts may be tax-deductible and the earnings grow tax-deferred until the time the funds are withdrawn.

When can withdrawals be made from the account?

Withdrawals may be made penalty-free after the owner is age 59 ½, or

For qualified higher-education expenses,

Disability,

Qualified medical expenses exceeding 7.5% of income,

Payments to beneficiaries upon the owner’s death,

Or payment of health insurance premiums while unemployed.

What is a Roth IRA?

Who can open a Roth IRA?

Anyone who has earned income.

How much can be contributed to the Roth IRA?

Beginning in 2002, a combined total of $3,000 per year may be contributed to the Roth IRA and traditional IRA or 100% of earned compensation, whichever is less. Also, the maximum contribution allowed will be periodically increased to $5,000 by the tax year 2008.

What are the benefits of the Roth IRA?

Withdrawals are not required to start when the owner reaches age 70 ½.

Contributions can be withdrawn tax and tax-penalty free at any time. Earnings may be withdraw tax and tax penalty free after the account has been opened at least five years provided the withdrawal meets one of the following conditions:

the owner is 59 ½ or older,

Disabled,

Death,

First time home purchase,

Qualified higher-education expenses,

Qualified medical expenses exceeding 7.5% of income, or

Payment of health insurance premiums while unemployed.

When can withdrawals be made from the account?

Contributions can be withdrawn any time. Earnings may be withdrawn tax free provided the account has been opened at least five years and one of the above listed qualifying circumstances exist.

What is an Education IRA?

Who can open an Education IRA?

Anyone under the age of 70 ½ with earned income.

How much can be contributed to the Education IRA?

Contributions to an education IRA are limited to maximum of $2,000 per year beginning in 2002. Contributions are not allowed once the beneficiary of the education IRA reaches 18 years of age. Contributions are not allowed in any year that contributions to a state tuition program for the same IRA beneficiary are made.

What are the benefits of the Education IRA?

Withdrawals for qualified higher-education expenses are tax-free. Funds can be transferred from one child’s account to another child in the family.

If you any questions regarding IRAs, please contact a member service representative at

850-432-9939 or e-mail your question to us @ pgfcu@pgfcu.com.