An IRA (Individual Retirement Account), will help you choose the plan that is right for you.
Skyline Financial Federal Credit Union can help you make the most of your investment opportunities.  Depending on your choice, you may be able to take a tax deduction for a Traditional IRA contribution, or withdraw the earnings on a Roth IRA tax-free.

Traditional and Roth IRAs both allow you to grow your money while receiving tax benefits.
However, there are some distinct differences.  The chart below provides a useful, comparative
reference.  As with all tax decisions, it is recommended that you consult a tax professional to
determine which product is right for your goals.

Roth vs Traditional

  Roth IRA Traditional IRA
Tax Advantages
Contributions Not tax deductible. Tax deductible, subject to certain limitations.
Earnings Tax free, subject to certain limitations. Taxes are deferred until you begin withdrawing funds.
Withdrawals Tax free withdrawals of original contributions; potentially tax free withdrawal of earnings if part of a qualified withdrawal. Taxable.
Contributions
Maximum 2016: Up to $5,500 for those under 50; $6,500 for those 50 and up. 2016: Up to $5,500 for those under 50; $6,500 for those 50 and up.
Eligibility No age restrictions.  If you are signle, you may have a modified Adjusted Gross Income (AGI) of up to $116,000 in 2016 to make a full contribution.  If you are married filing jointly, you may have a modified AGI of up to $183,000 in 2016 to make a full contribution. Anyone with earned income may contribute up to age 70-1/2.
Withdrawals
Tax / penalty Contributions can be withdrawn anytime without taxes or penalties.  Earnings can be withdrawn, without taxes or penalties, if you are 59-1/2 and your account has been open five years or more.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 the withdrawals are taken before age 59-1/2, or if withdrawals are not taken by age 70-1/2.
Distribution requirements None. Required Minimum distributions upon reaching age 70-1/2.
Exceptions to penalties Some 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.

Other Advantages of Skyline Financial IRAs

  • Excellent long - term savings vehicle
  • Flexible options – IRA savings, IRA share certificates
  • Insured up to $250,000 by NCUA