GEMC FCU offers IRA's for individuals and families who are looking to plan for their retirement or a child's education. Whether you choose a traditional, Roth, or Education IRA, it's an excellent way to save for your future. Plus, many IRA's carry tax advantages. Consult your tax advisor for details. A minimum of $25,000 is required to set up a Certificate IRA Account that pays a competitive quarterly dividend.

Traditional IRA

Individual retirement accounts are a smart way to save for the future. A traditional IRA can be opened and funded without any employer participation. Contributions and/or earnings are tax-deferred until retirement. Unlike many employer plans, money in the account is always accessible; however, until age 59 1/2 there is a 10 percent early distribution penalty unless you qualify for an exemption due to one of the following: disability, qualifying education expenses, unemployment, qualifying first home purchases, death, or receipt of your IRA assets in equal payments over your life expectancy.

Members under age 70 1/2 may contribute to an IRA at a maximum of $4,000 per year for tax years 2005.

Roth IRA

Roth IRAs differ from Traditional IRAs in that the money you contribute to a Roth IRA has already been taxed. So the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines. This retirement plan allows the money you contribute to grow tax-deferred.

If you do not withdraw any of the earnings until you have had the plan for at least five years, and satisfy one of the qualifying events, those tax-deferred earnings become tax-free. Unlike the traditional IRA, there is no age limit on making contributions. You simply need to have earned income equal to the amount you contribute up to a maximum of $4,000 per year for tax years 2005.

Educational IRA

Educational IRAs can be used to fund a child's education. An educational IRA can be opened for any child under the age of 18. You may contribute a maximum of $2000 per year per child until the student's 18th birthday. The child is the account beneficiary. Like the Roth IRA, contributions to the account are not tax deductible but earnings accumulate tax-free. Withdrawals from Educational IRAs can be used to pay for tuition, books, supplies and room and board (for fulltime students).

If a child does not attend college, the money must be withdrawn by the time he or she turns 30. Those earnings are subject to income tax and the 10% penalty. The Educational IRA can also be rolled over without penalty to another member of the family.

For more detailed information on any IRA, contact us for a closer look at each option.

The Credit Union provides not tax or legal advice to members, and provides the foregoing information from a reliable resource to give our members a basic understanding of these services. You should consult with your tax or legal advisor regarding any particular questions and the current status of applicable federal and state laws.

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* The Credit Union provides no legal advice to members, and provides the foregoing information from a reliable resource to give our members a basic understanding of these services. You should consult with your tax or legal adviser regarding any particular and the current status of applicable federal and state laws.