Individual Retirement Accounts, or IRAs, earn daily dividends that are compounded and credited monthly, earning you more savings. Depending on the plan, either Traditional IRA or Roth IRA, the savings you put into an IRA 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 NCUA insured up to $250,000. To open your IRA at anytime, 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.

In 2009 and 2010, you may contribute up to $5,000 to an IRA. For those age 50 and older, your contribution can be more—up to $6,000 for 2009 and 2010. The Internal Revenue Service imposes penalties for withdrawal of funds prior to age 59½, with some exceptions.

Review the following Traditional and Roth IRA plan descriptions, then decide which account 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*, major medical bills or higher educational expenses.

Roth IRA

• Contributions are subject to modified adjusted gross income limits.
• Withdrawals are tax free if funds have been in the account for over five years and meet any of these criteria: over 59½, disabled, first home purchase*, or death.
• 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.

IRA Account Options

Simplified Employee Pension (SEP)

A simplified employee pension (SEP) is a pension plan established by a business or sole proprietor whereby the contributions are deposited into IRAs and are tax deductible by the employer.  For 2009 and 2010, SEP contributions are limited annually to 25 percent of compensation or $49,000 (whichever is smaller), for each eligible employee.

IRA Club Accounts
If you're new to IRAs, Tower can help you begin saving for your retirement with an IRA Club account. Daily dividends are paid at a variable rate.

• Open a Club account with only a $5 initial deposit.
• Make additional 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
At Tower, your retirement savings may be invested in Share Certificates. Whether you are looking to invest a small amount or a 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.

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

Starting an IRA is a smart way to build a secure financial future. For more information, visit a branch or call the Member Service Center at 301-497-7000 or 800-787-8328.

Current IRA rates.

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