Veritas Federal Credit Union

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Roth IRA Traditional IRA

Unique Benefits

  • Any earnings are tax-free if withdrawn at or after age 59½ and the account has been open five years or more1.
  • Contributions (not earnings) can be withdrawn tax free at any time
  • Contributions are not tax-deductible
  • Any earnings grow tax-deferred until withdrawn at or after 59½, at which time they are taxed at your current rate
  • Contributions and earnings can be withdrawn free of the 10% additional federal income tax at or after age 59½
  • Contributions may be tax deductible

Who is eligible?

Any age, as long as your modified adjusted gross income (MAGI) does not exceed:

  2011 2012
Single Tax-Return Filers $122,000 $125,000
Joint Tax-Return Filers $177,000 $183,000

Effective as of January 1, 2010, the $100,000 MAGI restriction on Roth IRA conversions was repealed. Thus, since 2010 you have been able to convert a traditional IRA to a Roth IRA regardless of your MAGI level. MAGI-based restrictions are still in place regarding how much you can contribute to a Roth IRA.
Anyone under the age of 70½ who has earned income equal to or greater than their IRA contribution amount.

Withdrawals

No Required Minimum Distribution (RMD) ever. Subject to an exception, a Required Minimum Distribution (RMD) must be taken beginning in the year in which you turn age 70½.


Certain restrictions apply.

Fees and expenses are subject to change. Please note that other fees and expenses may apply, including early withdrawal penalties. Please review our Fee Schedule.

Any earnings are tax-free if you are at least 59� or unless you qualify for an exception and the Roth IRA has been funded for at least five years from the year of conversion. There is a 10% additional tax for withdrawals of earnings taken before age 59 �.

For Traditional IRAs � If you withdraw before age 59 � you may be subject to a 10% early withdrawal additional tax unless one of the following exceptions apply: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments.

For a withdrawal from a Roth IRA to be federal (and, in most cases, state) income tax free, it must be considered qualified. There is a five-year holding period when determining whether earnings can be withdrawn tax-free as part of a qualified distribution from a Roth IRA. This period begins January 1 of the tax year of the first contribution or the year of conversion to any Roth IRA. The distribution must be made after the five-year holding period, and the individual must have reached age 59 �, be deceased, disabled or use the funds for a first-time home purchase (lifetime limit of $10,000). There is a 10% additional federal income tax for non-qualified withdrawals of earnings taken before age 59 �, unless one of the following exceptions apply: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments. A special provision applies for converted assets. If a non-qualified withdrawal is made within five years of the conversion, the earnings withdrawn will be subject to income tax, and the entire withdrawal may be subject to an additional 10% federal income tax unless an exception applies.

Neither Veritas Federal Credit Union nor any of its employees are tax or legal advisors. We strongly suggest you consult your personal tax or legal advisor before making tax or legal-related investment decisions.



Veritas Federal Credit Union
One Nissan Way
Franklin, TN 37067

Mailing Address:
PO Box 2659
Smyrna, TN 37167

Main Phone: (615) 786-0452
Member Service: (855) 663-8328
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Routing Number: 064182605
VFCU NMLS #409723
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