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Everyone dreams of retiring early and buying property on "Easy Street." This can be a real possibility if you start saving with a PrimeSource IRA (Individual Retirement Account). PrimeSource offers both Tradtional and Roth IRAs for your golden years.
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Individual Retirement Accounts (IRAs) let you augment your pension and Social Security income while potentially enjoying a break on your taxes. You can reduce your current tax bill by deferring income tax on the dividends the account earns until you begin withdrawals, usually after retirement when your tax rate may be lower. Part or all of the money you deposit may be tax-deferred, depending on your overall income and pension plan participation status.*
PrimeSource Credit Union offers both Traditional and Roth IRAs, which are available as a regular share investment or certificate account investment. Each has their different advantages.
Like all your PrimeSource savings and investments, your funds are insured by the NCUA. IRAs are insured separately from your other non-IRA accounts up to an additional $250,000 for added protection of your retirement funds.
IRA Share Accounts
IRA Certificate Accounts
Traditional IRA Facts
Roth IRA Facts
Coverdell Education Savings Accounts
IRA Share Account
*This is not referring to IRS penalties for early withdrawal before age 59.
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IRA Certificate Accounts
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| Tax Year |
Single Filer |
Married Filing Joint Return |
| 2002 |
$34,000.00-$44,000.00 |
$54,000.00-$64,000.00 |
| 2003 |
$40,000.00-$50,000.00 |
$60,000.00-$70,000.00 |
| 2004 |
$45,000.00-$55,000.00 |
$65,000.00-$75,000.00 |
| 2005 |
$50,000.00-$60,000.00 |
$70,000.00-$80,000.00 |
| 2006 |
$50,000.00-$60,000.00 |
$75,000.00-$85,000.00 |
| 2007 |
$50,000.00-$60,000.00 |
$80,000.00-$100,000.00 |
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It's similar to the regular share/savings account in that there is not a PrimeSource Credit Union penalty* for withdrawal and you can make deposits anytime (not to exceed your maximum IRS contribution limit).
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The minimum to open is only $50.
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Perfect for payroll deductions/allotments.
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No annual fee.
Traditional IRA Facts
- Starting in 2005, the maximum annual contribution is $4,000 if under age 50 or $4,500 if age 50 or over or 100% of your earned income, whichever is less.
- Income caps for full tax deductibility on contributions will increase each year until the year 2007.
- No "marriage penalty." One spouse's active participation in an employer provided pension plan -- such as a 401(k) -- does not affect the other spouse's status for contribution deductibility.
- IRS penalty-free withdrawals are allowed prior to age 59 for disability or when the funds are used for first-time home purchases (up to a lifetime limit of $10,000), and/or qualified higher education expenses.
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Roth IRA Facts
- The Roth IRA, like the Traditional IRA, has a maximum annual contribution limit of $4,000 if under age 50 or $4,500 if age 50 or over or 100% of your earned income, whichever is less.
- Contributions to a Roth IRA are not tax-deductible.
- Your eligibility to contribute to a Roth IRA is not dependent on whether you are covered by a retirement plan at work.
- Dividends grow tax-free.
- Withdrawals of both contributions and earned dividends are tax-free after age 59, as long as the money has been in the account for five years.
- Tax-free distributions from the Roth IRA are permitted prior to age 59 for disability and/or first-time home purchases (up to a lifetime limit of $10,000), as long as the money has been in the account for five years.
Unlike Traditional IRAs, the Roth IRA allows you to make contributions after the age of 70.
- The Roth IRA does not require mandatory minimum distributions once you reach age 70.
- Converting Traditional IRAs to a Roth IRA:
- You can convert your Traditional IRAs to a Roth IRA, using special rules developed by the IRS.
- Amounts in Traditional IRAs can be transferred to Roth IRAs provided the tax payer's Adjusted Gross Income is $100,000 or less for the year in which the transfer is made.
- Part of the transferred amount is subject to income tax, but is exempt from IRS early withdrawal penalties.
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When children head off to college, parents are sometimes left with an empty nest; but an empty wallet is even more common. That's because the cost of a four-year college education is staggering-- and it's been increasing about 5% annually for the last five years.
If you're hoping to help your child get ahead in the world with a college degree, how do you prepare for the financial burden? A Coverdell Savings Account may be the answer. This account designed to fund retirement, but rather college tuition, books, room and board, and certain other higher-education expenses.
A Coverdell Savings Account has tax advantages that other college savings plans don't. Your earnings are tax-and penalty-free if withdrawals are used for qualified higher-education expenses.
Each year, you can make nondeductible contributions of up to $2,000 per child to a Coverdell Savings Account funds that aren't used by the time your child turns 30 can be rolled into a Coverdell Savings Account for a sibling or other family member under age 30.
Funds may be used to pay private elementary or secondary school expenses as well as vocational, undergraduate educational expenses. (Not applicable to public schools.)
The account must be established before the child's 18th birthday and no contributions may be made on or after that date; unless the IRS defines the child as having a physical, mental, or educational condition that requires them extra time to complete their education.
Earnings will accumulate tax-free and withdrawals may be tax-free if used for the school expenses, as explained above, until they reach the age of 30.
If the child decides not to go to college or leaves school before all the funds are withdrawn, you can roll unused funds into the Coverdell ESA of another child in your family.
Coverdell Savings Accounts from your credit union can be a safe, smart way to help pave the way to your child's success.
Income Requirements:
- Single filers with modified adjusted gross income (
- Joint filers with MAGI between $190,000 and 220,000.
If you're above these income limits, you cannot make a regular Coverdell ESA contribution.
PrimeSource also offers Student Loans
Call 509-838-6157660-0444 or 800- for more information on our IRAs, Coverdell Education Savings or any other product and service you may be interested in learning more about.
*PrimeSource Credit Union does not provide tax advice, so please consult your tax professional.
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