U of I Employees Credit Union
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General Disclaimer
All information on this website is general and for informational purposes only. Please refer to IRA/ESA regulations and IRS law for further information, available at www.irs.gov, or consult your tax advisor.
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What is the difference between an IRA Savings account and an IRA Certificate?
The IRA Savings account requires no minimum balance, has no credit union imposed penalty for early withdrawal, and allows for deposits. They are classified as an IRA and therefore are subject to IRS terms and conditions. Because of the increased flexibility, the interest rate is very similar to a regular savings account. An IRA Certificate is basically the same as a Silver Share Certificate, except they are classified as part of your IRA and therefore are subject to IRS terms and conditions. As with any certificate, there is a penalty for early withdrawal and there may also be a penalty under IRS law.
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Can I list my spouse as joint on my IRA account?
No, the IRA account is an Individual Retirement Account, and by IRS guidelines, there can only be one person listed on this account. You can, however, list your spouse, children, and anyone else you desire as a beneficiary on your IRA.
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Can I withdraw money from my spouse’s IRA for them?
No, the only person with access to the IRA account is the individual owner. Again, you can list your spouse, children, and anyone else you desire as a beneficiary on your IRA.
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What are the rules for moving my other IRA to an IRA at the credit union?
With a direct transfer (where you tell the other financial institution to send the funds to the credit union for the benefit of your IRA), you have no deadlines or limitations as long as you’re under age 70½ and the money leaves and re-enters the same type of IRA. With a rollover (where the funds are payable to you), you have 60 days to redeposit the money into an IRA. The portion of a traditional IRA distribution that’s not re-deposited to an IRA when the clock runs out becomes taxable income, except to the extent it represents a return of nondeductible IRA contributions.
Rollovers between the same IRA type are also subject to a “once-a-year-rule.” Simply put, you can’t roll over IRA funds if there was a previous rollover from the same IRA in the last 365 days. The rule also bans rollovers from an IRA that has received a rollover in the last 365 days. Keep in mind that if you are 70½ or older, you’re required to receive minimum distributions from your traditional IRA that do not qualify for any rollover or direct transfer.
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Do I have to make my entire annual contribution to an IRA at one time?
If you wish, you certainly can put your whole year’s contribution in at once. But you can make it a lot easier on your pocketbook with payroll deduction at the credit union. This convenient method spreads your IRA contribution over the entire year, helping you to save regularly and avoid the hit of a lump-sum payment. For example, if you’re eligible to contribute $5,000 to a traditional or Roth IRA, simply tell us to automatically deposit $416.66 from your paycheck directly into your IRA at the end of each month. It won’t seem like much, but it adds up in the end. After 25 years earning .40% APY compounded monthly, you’ll have $131,482.33 – all without a single reminder to yourself to save for your future.
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What’s the difference between a Roth and a Traditional IRA?
With a traditional IRA, your contributions may be tax-deductible and earnings are tax-deferred, meaning you pay taxes on most IRA funds upon withdrawal. In contrast, Roth IRA contributions are always made with after-tax dollars, but qualified withdrawals are tax-free – including all your earnings!

As for similarities, the aggregate contribution limit to either a Roth or traditional IRA is $5,000 per year at 100% of your compensation (whichever is less). And both offer the flexibility to use funds not only for retirement, but also for first-time home purchase and higher-education expenses. Those 50 years or older may also contribute a additional $1,000 annually as a catch-up contribution.
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Can I contribute to an IRA if I already have a retirement plan through my employer?
Yes, you can contribute to a Roth, Coverdell ESA or Traditional IRA regardless of whether or not you have an employer-sponsored retirement plan. In fact, IRAs are a great way to pad your savings.
While participation in a retirement plan doesn’t change how much you can contribute to an IRA, it can affect whether or not you’re eligible to deduct your contributions to a traditional IRA on your tax return. But keep in mind that as long as you’ve earned compensation, you can always make nondeductible contributions to a traditional IRA and benefit from tax-deferred earnings.
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Am I eligible to contribute to an IRA?
To be eligible for a traditional or Roth IRA, you must earn compensation or file a joint income tax return with a spouse who earns compensation. If you want to contribute to a traditional IRA, the only additional requirement is that you are under age 70½. Whether your contributions will be tax-deductible, however, is determined by your participation in a retirement plan and your income.

To contribute to a Coverdell Education Savings Account (ESA) IRA, you must fall within certain income limits. Please refer to ESA Tax Topic 310 at www.irs.gov for further information.
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Can my spouse and I both contribute to IRAs?
Yes, however, you’ll need at least two separate IRAs to contribute. If you don’t earn compensation, but your spouse does, you still may be eligible to contribute to a Traditional or Roth IRA based on our spouses earnings.

Keep in mind that there are income limits in order to contribute the full amount to a Roth IRA. You may be eligible for partial contributions based on income. While there’s no age limit on contributions to Roth IRAs, you can’t contribute to a traditional IRA for the year you reach age 70½ or later years. Also, there are some limitations on tax-deductible contributions to traditional IRAs. Please refer to Publicaiton 590 at www.irs.gov.
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Can I have both a traditional and a Roth IRA?
There’s nothing wrong with having both. In fact, it gives you the chance to benefit from both front-end and back-end tax savings. Please refer to Publicaiton 590 at www.irs.gov.
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