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Checking & Savings > Retirement Accounts 

Retirement Accounts

Opening an Individual Retirement Account (IRA) is a smart way to save for your future, even if you plan on receiving retirement income from a 401K, 403B, pension, or Social Security. Plus, an IRA can be used for other purposes too, it's not just for retirement.

 

For your peace of mind, all MCT accounts are insured up to $250,000 by the National Credit Union Administration (NCUA), an agency of the U.S. Government. Your Individual Retirement Accounts (IRAs) are insured separately up to an additional $250,000.

 

Rates     Open an IRA

 

 

 

 

 Which type of IRA is right for you?

 

 Traditional IRA

 Roth IRA

Who can contribute to an IRA?  Anyone prior to the year they attain

age 70 ½.

 

Must have earned income (wages paid for services rendered). 

 

Social Security, other benefit or investment income is not considered eligible income.

There is no age limit.

 

 

Must have earned income* not to exceed

$  99,000 - $114,000 for Single Filers

$156,000 - $166,000 for Married Filers

$0 - $10,000 for Married Filing Separate

 

Partial contribution allowed when between the minimum and maximum amounts displayed above.
What if I don’t have earned income? If your spouse has earned income and you are filing a joint tax return, your spouse may fund your IRA for you. If your spouse has earned income and you are filing a joint tax return, your spouse may fund your IRA for you.
How much can I contribute? $5,000.00  plus an additional $1,000.00  if you are age 50 or older. $5,000.00  plus an additional $1,000.00  if you are age 50 or older.
When will I pay taxes for contributions I have made? If you deduct** your Traditional IRA contributions, you will pay taxes as you make withdrawals. Dividend earnings are taxed with each withdrawal.

 

Otherwise, if you do not deduct your contributions, only dividend earnings are subject to taxation at withdrawal (as your regular earned income has already been taxed). 		You never pay taxes when withdrawing just contributions you made, as your regular earned income has already been taxed. Dividend earnings are taxed as they are withdrawn.

 

If you convert Traditional IRA funds to a Roth IRA, you will pay taxes on the converted funds for the year they are converted.

When will I pay taxes for the dividend earnings in my IRA? Dividends are always taxed as you withdraw them. Dividends are taxed as you withdraw them.

 

However, if you have had a Roth IRA for 5 years and one of the following reasons, your dividend earnings will be distributed TAX FREE:

  • You reach age 59 ½
  • First home purchase
  • Disability
  • Death
Are distributions penalty-free?

Yes, when one of the following occurs:***

  • You reach age 59 ½
  • Disability
  • First home purchase
  • Death
  • Medical expenses
  • Health insurance premiums during unemployment
  • Higher-education expenses
  • IRS levy
  • Equal periodic payments over IRA holder’s life expectancy
  • Qualified reservist distributions

Yes, if you have had your Roth IRA for 5 years and one of the following occurs:***

  • You reach age 59 ½
  • Disability
  • First home purchase
  • Death (beneficiaries may withdraw your IRA funds penalty free)

 

Are distributions required?  Yes, after age 70 ½. No, never.
 
 

*Earned Income is based on your Modified Adjusted Gross Income (MAGI).
**Contact a tax professional to determine your eligibility to deduct Traditional IRA contributions.
***This is not meant to be a complete list of IRA penalty exceptions; it is merely a summary. For more information, consult a tax professional.

 

 
 


 


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