We are here to help you grow financially. If your goals are to start saving for your retirement, boost your retirement savings, or save for your child’s education expenses you are in the right place. Dow Credit Union has the IRA to fit your needs.
All of our accounts are available in either a Passbook savings account or a Certificate Account.
Passbook IRA Savings:
- This savings account allows you to make regular deposits to the account at any time
- No minimum balance required to open the account
- $1,000 minimum balance to earn dividends
Certificates:
- Terms from 1 year up to 5 years.
- Minimum starting balance as low as $1,000
- Dividends are compounded quarterly and credited quarterly
See Contribution and Distributions Quick Reference Guide
Traditional IRA: Pay Taxes on the back-end
This Individual Retirement Account gives you the benefit of making contributions that may be tax deductible, which means it reduces the contributor’s taxable income for that year.
Roth IRA: Pay taxes on the front-end
Pay the tax up front if you think you will be in a higher tax bracket in the future. At the time of withdrawal there will be no taxes if done for a qualified distribution: the IRA owner is 59 ½ or older, is disabled, is deceased, or the distribution qualifies as a first-time home purchase, AND the owner has had a ROTH IRA for 5 years.
Education IRA: Pay taxes on the front-end
This account is designated to help pay the education expenses of a child. Education expenses include eligible public, private, or parochial elementary, secondary or post-secondary expenses. The funds must be withdrawn before the designated beneficiary turns 30. This may be at a later date for a special needs designated beneficiary.
The earnings will be tax-free if the funds are used to pay for qualified education expenses. If the funds are withdrawn for another purpose, the designated beneficiary will be responsible for the taxes, not the contributor.
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Financial Education is important to us. Check out the LEARNING ZONE for brief and interactive educational tools. They are a great way to increase your or your family’s knowledge and prepare for success.
IRA Contribution Quick Reference Guide
| Eligibility Criteria | Traditional IRA | Roth IRA | Education IRA |
|---|---|---|---|
| Eligibility Age to Open an IRA | No age limit | Birth through 18 years | Eligibility Age to Open an IRA |
| Eligibility | Must have earned income or have a distribution from a qualified plan | Must have earned income or have a distribution from a qualified Roth plan | Under 18 years unless child has special needs |
| Maximum Contribution Limits | 2017-$5,500 2018-$5,500 Plus, an additional $1,000 if 50 years or older | 2017-$5,500 2018-$5,500 Plus, an additional $1,000 if 50 years or older | 2017-$2,000 2018-$2,000 |
| Contribution Deadline Date | Tax deadline for prior year (typically April 15th) | Tax deadline for prior year (typically April 15th) | Tax deadline for prior year (typically April 15th) |
- Rollover Funds are moved from an employer sponsored plan to Dow (i.e. 401k, etc.)
- Transfer Funds are moved from an existing IRA at another institution to a Dow IRA
IRA Distribution Quick Reference Guide
| Eligibility Criteria | Traditional IRA | Roth IRA | Education IRA |
|---|---|---|---|
| Required Minimum Distribution (RMD) | Yearly RMD by December 31st Mandatory RMD beginning at 70 ½ years | None | No RMD Funds must be withdrawn by Age 30 May be transferred to another child in the same family |
| Normal Distribution | 59 ½ years or older Subject to Federal/State income taxes | 59 ½ years or older Meets 5 year mandatory waiting period, otherwise subject to Federal/State income taxes | No penalty for qualified education expenses |
| Early Distribution | Under 59 ½ years, subject to IRS 10% early withdrawal penalties and Federal/State Taxes | Under 59 ½ years, subject to IRA 10% early withdrawal penalties and Federal/State taxes | Educational expenses are incurred |
| Distributions with Exceptions | First time home buyer ($10K limit) Higher education expenses Medical expenses Distribution due to death | First time home buyer ($10K limit) Higher education expenses Distribution due to death | N/A |
