IRAs (Individual Retirement Arrangements)
With an IRA (Individual Retirement Arrangement), you choose the plan that’s right for you. Depending on your choice, you may be able to take a tax deduction for Traditional IRA contributions, or withdraw the earnings on a Roth IRA tax-free. With the start of 2017 Buckeye has partnered with Whitaker-Meyers Wealth Management Services to manage IRA accounts for Buckeye members.
Traditional IRAs enable you to build a long-term retirement fund on which you pay no federal income taxes on the earnings until you start to make withdrawals. Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status and other factors. Ask us for details.
Roth IRAs are individual retirement accounts allowing you to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free. Talk to us to see if you qualify.
Coverdell Education Savings Account
You are allowed to put $2,000 into each Coverdell Education Savings Account. Also, qualified expenses apply to primary and secondary education as well as college. Contributions to a Coverdell ESA aren’t deductible, but amounts deposited in the account grow tax free until distributed. Ask us how to get started.
IRA Builder Accounts
This service allows you to build your IRA. While other institutions may require a large minimum deposit, members can open an IRA with even a zero balance and build it through payroll deduction.
When you have a substantial amount built up, we encourage you to withdraw it and roll it over to an IRA that might be a stock market account or other investment venue for maximum returns. Ask for details.
Move rollover options
It’s a smart move to roll assets from your retirement plan into a traditional IRA when changing jobs or retiring. By choosing a direct rollover – instead of the cash payment option – you delay taxes, avoid mandatory 20% federal withholding and other tax penalties. Until 2002, you could only roll taxable distributions from your 401(k) and 403(b) plans over to an IRA. Today, funds from governmental 457(b) plans are also eligible for rollover.
When can I withdraw from a Traditional IRA?
You can withdraw funds from your IRA any time after you reach age 59 1/2. Distributions taken prior to age 59 1/2 are subject to a 10% early withdrawal penalty unless the distribution is:
- Made to a beneficiary due to the account holder’s death
- Made to an account holder who has become permanently and totally disabled.
- Made as part of a series of “substantially equal” periodic payments.
- Used to pay medical expenses in excess of 7.5% of the account holder’s adjusted gross income.
- Used to pay health insurance premiums for participants unemployed 12 or more weeks.
- Up to $10,000 used for the first time purchase of a home.
- Used to pay for qualified higher education expenses.
Distributions must start by April 1 following the year in which the participant reaches age 70 1/2. Failure to begin distributions at this point will impose penalties. The Worker, Retiree and Employer Recovery Act of 2008, waives the required minimum distribution for IRA owners 70 1/2 or older in 2009.