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IRAs

It's never too soon to start planning for retirement. In fact, the earlier you start, the more likely you are to achieve financial security. Such is the power of compound interest. Visit our Financial Insights page for an example of its effects.

Individual Retirement Accounts (IRAs) were created specifically to encourage people to save for retirement. In some cases, your deductions may be tax deductible or interest tax deferred until funds are drawn. Specific limits apply according to individual situations that can be found in IRS Publication 590. The information offered here should be considered as guidelines only, consult with your tax advisor to determine your limitations for tax deductions.

In 2012, your IRA is FDIC insured for up to $250,000!

Use our retirement calculator to help determine how much you should save to meet your retirement goals.

GCF offers two types of IRAs to fit your needs. Learn more about Traditional and Roth IRAs. Then, stop by any GCF office to open your account today!

Traditional


For a single taxpayer:
Maximum Contribution: $5,000.00. $6,000.00 for age 50 or over.
  • Full deduction if you are not a participant in an employer-sponsored retirement plan, regardless of income.
  • Full deduction if you are a participant in an employer-sponsored retirement plan and modified adjusted gross income (MAGI) is $58,000.00 or less. Partial deductibility if MAGI is between $58,000.00 to $68,000.000 for 2012.
For married taxpayers:
Maximum (combined) Annual Contribution: $10,000.00. Additional $1,000 permitted for each participant age 50 or over.
  • Full deduction if neither person participates in an employer-sponsored retirement plan, regardless of income.
  • Full deduction if you or your spouse is a participant in an employer sponsored retirement plan, joint tax return MAGI is $92,000.00 or less. Partial deductibility if MAGI is between $92,000.00 to $112,000.00.
  • Full deduction if you are not in an employer-sponsored retirement plan and married to someone who is.
Income Limits For Participation:
You may earn up to $173,000.00 AGI with a Deductible Contribution if you are a non-active individual married to an active participant. Contribution is phased out between $173,000.00 and $183,000.00. There is no income limit for a Nondeductible Contribution.

Age Limit For Contributions and Required Minimum Distributions:
You cannot make contributions after age 70 1/2 at which age distribution is required.

Earnings are Tax-Deferred

Taxation of Distributions:
Earnings and contributions of Deductible Contributions are taxable. With a Nondeductible Contribution, only your earnings are taxable. Contributions are tax-free! Your tax advisor can help you to determine your tax liability.
Penalty For Early Distribution:
The IRS imposes a 10% penalty for withdrawing all or any part of the account before age 59 1/2 unless exception applies.1 Bank penalty may apply for early withdrawal.

1The 10% early penalty does not apply if the individual is deceased, disabled, for college expenses or first time home purchase up to $10,000 and certain medical expenses.

ROTH

Maximum Annual contribution: $5,000.00 or $10,000.00 for married taxpayers. Additional $1,000 permitted for each participant age 50 or over.

Your Roth IRA contribution is not tax deductible.

Income Limits for Participation:

For a single taxpayer with AGI less than $110,000.00. Contribution is phased out between $110,000.00 and $125,000.00.

Married taxpayers filing jointly with AGI less than $173,000.00. Contribution is phased out between $173,000.00 and $183,000.00.

Age Limit For Contributions and Required Minimum Distributions
No age limit or required minimum distributions!

Earnings are Tax Free!

Taxation of Distributions:
Tax-free withdrawals of your contributions are permitted at any time. Tax-free withdrawals of earnings are permitted after age 59 1/2, in the event of death or total disability, or as a qualified first-time home buyer (up to $10,000.00). Earnings must have remained in the account for a period of five successive tax years. Your tax advisor can help you to determine your tax liability.
Penalty For Early Distribution:
Penalty free withdrawal of your contributions are permitted at any time. Earnings are subject to 10% IRS penalty prior to age 59 1/2 unless exception applies.1 Bank penalty may apply for early withdrawal.

1 The 10% early penalty does not apply if the individual is deceased, disabled, for college expenses or first time home purchase up to $10,000 and certain medical expenses.