IRAs


Be ready for retirement with a little help from your Ripco Credit Union Individual Retirement Account.  Adding a Ripco IRA to your retirement plan can offer certain tax advantages. The two most common accounts are Traditional IRAs and Roth IRAs. Each offers different tax advantages and benefits, so it’s important to compare them.  See which once would be most beneficial to you!

ROTH VS. TRADITIONAL
Roth IRATraditional IRA
Tax advantages
ContributionsNot tax-deductible.Tax-deductible, subject to certain limitations.
EarningsTax-free, subject to certain limitations.Taxes are deferred until you begin withdrawing funds.
WithdrawalsTax-free withdrawal of original contribution; potentially tax-free withdrawal of earnings if part of a qualified withdrawal.Taxable.
Contributions
Maximum Contributions2013: Up to $5,500 for those under 50; $6,500 for those 50 and up.2013: Up to $5,500 for those under 50; $6,500 for those 50 and up.
EligibilityNo age restrictions.

If you are single, you may have a modified Adjusted Gross Income (AGI) of up to $112,000 in 2013 to make a full contribution.

If you are married filing jointly, you may have a modified AGI of up to $178,000 in 2013 to make a full contribution.
Anyone with earned income may contribute up to age 70-1/2.
Withdrawals
Tax/penalty consequencesContributions can be withdrawn anytime without taxes or penalties.

Earnings can be withdrawn, without taxes or penalties, if you are 59-1/2 and your account has been open five years or more.
All earnings and deductible contributions are taxable upon withdrawal.

Penalties will be assessed if withdrawals are taken before age 59-1/2, or if withdrawals are not taken by age 70-1/2.
Distribution requirementsNone.Required minimum distributions upon reaching age 70-1/2.
Exceptions to penaltiesSome exceptions are made if funds are used for a first-time home purchase, education or certain medical expenses.Some exceptions are made if funds are used for a first-time home purchase, education or certain medical expenses.