Sound investing for a secure retirement. IRAs

IRAs

Saving in an Individual Retirement Account (IRA) is a smart way to build a secure financial future. Tower IRAs earn daily dividends that are compounded and credited monthly. Depending on whether you have a Traditional IRA or Roth IRA, your deposits may be tax deductible, and will grow either tax deferred or tax free. Check with a tax advisor.

For added security, your retirement savings are insured up to $250,000 by the National Credit Union Administration (NCUA). To open an IRA, you must be a Tower member and the recipient of earned income, or the non-wage earning spouse of an eligible member. You can also open a Tower IRA if you have an existing IRA that you want to rollover or transfer.

For tax years 2013 and 2014, you may contribute up to $5,500 to an IRA. For those age 50 and older, your contribution can be more—up to $6,500. The Internal Revenue Service (IRS) imposes penalties for withdrawal of funds prior to age 59½, with some exceptions.

Decide which IRA is right for you:

Traditional IRA

  • Contributions may be tax deductible; check with a tax advisor.
  • Earnings are subject to taxation at withdrawal.
  • Withdrawals can begin at age 59½, but you are required to begin withdrawals by age 70½; you may not make contributions after age 70½.
  • You may be able to make penalty-free withdrawals for a first home purchase*, for higher educational expenses**, or if you are disabled.

Roth IRA

  • Contributions are subject to modified adjusted gross income limits.
  • You may start withdrawals at 59½. Prior to this age, you may take out penalty-free withdrawals for a first home purchase*, for higher education expenses**, or if you are disabled.
  • You can make contributions after age 70½.
  • You can convert your existing Traditional IRA to a Roth IRA. Taxes must be paid on the tax deductible contributions and earnings made up to the point of conversion. Check with a tax advisor.

*Lifetime limit for exemption on first-time home purchase is $10,000.
**The IRS requires that distributions are not more than your higher education expenses.

IRA Account Options

IRA Club Accounts

If you're new to IRAs, begin saving for your retirement with an IRA Club account.

  • Open an IRA Club account with only a $5 initial deposit.
  • Make deposits at any time in any amount, up to the maximum annual limit.
  • When you reach a balance of $500, open one of Tower's Regular IRA Share Certificates.
  • Daily dividends paid at a variable rate.
IRA Share Certificates

Whether you want to invest a small or large amount, Tower has a Share Certificate† that will work for you.

  • Regular IRA Share Certificates require a minimum deposit of $500 and offer terms of one to five years.
  • Bump-up IRA Share Certificates require a minimum deposit of $5,000 and offer terms of four and five years. If rates climb, you can "bump-up" to a higher rate once during the term.
  • Mini-jumbo IRA Share Certificates require a minimum deposit of $20,000 and offer terms of four and five years.

Share Certificate Terms and Conditions: Dividends are calculated using the daily balance method, which applies a daily periodic rate to the balance of the Share Certificate, and is subject to an early withdrawal penalty. Additions to your IRA Share Certificate cannot be made for the term unless they complete a current tax year contribution.

Simplified Employee Pension (SEP)

A simplified employee pension (SEP) is a pension plan established by a business or sole proprietor. Contributions are deposited into IRAs and are tax deductible by the employer. For tax years 2013 and 2014, SEP contributions are limited annually to 25 percent of compensation or $51,000 for 2013 and $52,000 for 2014, (whichever is smaller) for each eligible employee.

Transfer and Rollover IRAs

If you have an IRA at another financial institution, transfer those funds to a Tower IRA. There is no limit to the transfers. If you have a qualified retirement plan, such as a 401(k), it may be rolled into a Traditional or Roth IRA.

To open an IRA, visit a branch or call the Member Service Center at 301-497-7000 or 800-787-8328.

Tower Financial Services for Other Options

Another option for saving for retirement is to open an IRA with Tower Financial Services, Tower's in-house financial planning and investment management department. Experienced, non-commissioned financial consultants are available to meet with you to discuss your investment options. To set up a free, no-obligation consultation, call Tower Financial Services at 301-497-7062 or 800-787-8328, ext. 7062.

Securities and financial planning offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Tower Federal Credit Union and Tower Financial Services are not registered broker dealers nor affiliated with LPL Financial. The Tower Financial Services Web site is for U.S. Residents only. LPL Financial's U.S. Investment Representatives may only conduct business with residents of states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.


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