Individual Retirement Accounts (IRA)

Plan for the future with a credit union IRA. For most people, personal savings now plays an important role in retirement planning. With competitive rates, federal deposit insurance and unique tax benefits, an Individual Retirement Account (IRA) here at Foothill Federal Credit Union is one of the best ways to save for a comfortable, secure future. Choose from three great plans and some key benefits of each account:

Traditional IRAs:

If you qualify, you may be able to deduct your Traditional IRA contributions from your taxable income. This provides an immediate tax break. Your earnings remain tax-sheltered until withdrawn.

Roth IRAs:

While your contributions with a Roth IRA are not tax deductible, your earnings can grow tax-free. As long as you meet certain criteria, you will never have to pay taxes on your withdrawals.

Education IRA (Coverdell Education Savings Account):

Education IRA accounts are designed to help cover educational expenses for your children or grandchildren. Your earnings are tax-free, and may be used for tuition, school supplies and other qualified expenses for any grade level.

For more information or to open an IRA account, please visit a branch or call a Member Service Consultant at (626) 445-0950.

Roth vs. Traditional IRA

	ROTH IRA	TRADITIONAL IRA
Eligibility	Wage Earners who meet income limitations	Wage earners under the age of 70 1/2
Income Limitations (AGI: Adjusted Gross Income)	Single: $95,000 - $110,000 Joint: $150,000 - $160,000	None
Deductibility of Contributions	Not deductible, but can be withdrawn at any time	May be deductible depending on active participation in employer-sponsored pension plan, AGI, and filing status
Maximum Annual Contribution Contribution deadline: April 15th following contribution year	$4,000 ($5,000 if age 50 or over) for 2007 $5,000 ($6,000 if age 50 or over) for 2008 thereafter: increases for inflation in $500 increments; over age 50 continues to be an additional $1000 per year.	$4,000 ($5,000 if age 50 or over) for 2007 $5,000 ($6,000 if age 50 or over) for 2008 thereafter: increases for inflation in $500 increments; over age 50 continues to be an additional $1000 per year
Earning Growth (consult a tax advisor regarding the deductibility of interest)	Tax free for qualifying distributions	Tax deferred
Mandatory Distributions	Not Required	Required at age 70 ½

Education IRA

Eligibility	One Educational IRA can be opened per beneficiary, and a non deductible contribution of $2000 can be made to an Education IRA by a parent, grandparent or any other person for any other person, under the age of 18
Income Limitations	$160,000 - $220,000
Deductibility of Contributions	Non-Deductible
Maximum Annual Contribution	$2000.00 Contribution deadline: April 15th for prior year
Earning Growth (consult a tax advisor regarding the deductibility of interest)	Growth within an Educational IRA is NON TAXABLE and monies eventually removed from the Education IRA are TAX FREE if used for qualified educational expenses
Qualified Educational Expenses	Include: Elementary, Secondary, and College Expenses

Contributions are allowed for both an Education IRA and 529 College Saving Plan in the same year.
Contributions may be made by corporations and tax-exempt entities.
If money is not spent or used for educational purposed for a designated person, then the Educational IRA can be rolled over into an Education IRA for a broadly defined family member of the original beneficiary.
Withdrawals from Educational IRAs not used for educational purposes-expenses may be subject to both income tax and a 10% IRS penalty tax.

Certain restrictions and conditions apply. Not all tax advantages may be available to you. When you withdraw from a Traditional IRA to convert to a Roth IRA you may incur tax liability. Specific questions on taxes and deductibility qualifications, as they relate to your individual retirement plans, should be directed to your tax advisor. Programs (including, without limit, fees, rates and features) are subject to change without notice.

To determine your eligibility and the right plan for your needs, please consult your tax advisor.