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IRAs

On December 20, 2019, Congress passed The Secure Act which resulted in several changes to Individual Retirement Accounts (IRAs). Please click here to learn more.

An Individual Retirement Account (IRA) is a special, tax-favored savings plan authorized by the Federal Government to help you build a personalized retirement fund.

In addition, we offer other types of tax-favored savings plans that allow you to fund future educational needs (Coverdell Education Savings Account) and to assist your employees in building their retirement funds (Simplified Employee Pension Plan).

Whether you’re planning your retirement, saving for education or assisting your employees to secure their future, Jeanne D’Arc has a plan tailor-made to get your there.

Plans offered include:

  • Traditional IRA

    When you contribute to a Traditional IRA, you won’t pay taxes on earnings until you start making withdrawals. When you open a Traditional IRA, you may get immediate tax benefits.

    • Must be employed to contribute to an IRA
    • Maximum age for tax year 2019 contribution is 70½. There is no maximum age for tax year 2020 contributions and beyond
    • Maximum contribution for tax year 2019 for individuals under age 50 is $6,000.00. For individuals age 50 to 70 ½, the maximum contribution is $7,000.00 ($6,000.00 plus $1,000.00 catch up)
    • Maximum contribution for tax year 2020 for individuals under age 50 is $6,000.00. For individuals age 50 and older (no maximum age limit) the maximum contribution is $7,000.00 ($6,000.00 plus $1,000.00 catch up)
    • Contributions may be tax deductible depending on income and if participant is in a workplace retirement plan
    • Earnings grow tax deferred
    • Withdrawals are taxable as “income” and may be subject to a 10% early withdrawal penalty by the IRS if withdrawn prior to attaining age 59½
    • Required Minimum Distributions begin for those who turned age 70½ in 2019 and before. Those turning 70½ in 2020 do not have to start RMDs until age 72
  • Roth IRA

    Roth IRAs are similar to Traditional IRAs except that contributions are made from your after-tax earnings.

    • Must be employed to contribute to an IRA
    • Maximum contribution for tax year 2019 for individuals under age 50 is $6,000.00. For individuals age 50 and over, the maximum contribution is $7,000.00 ($6,000.00 plus $1,000.00 catch up)
    • Maximum contribution for tax year 2020 for individuals under age 50 is $6000.00 For individuals age 50 and over, the maximum contribution is $7000.00 ($6000.00 plus $1000.00 catch up)
    • Contributions are not tax deductible
    • Earnings grow tax deferred and may be tax free upon withdrawal if eligibility requirements are met
    • No required distributions
    • Funds must remain in a Roth IRA for five years; participants must be age 59½ or older or meet exception requirements for withdrawal to be tax free
  • Coverdell Education Savings Account (CESA)—formerly Education IRA

    Coverdell Educations Savings Accounts (CESA) were created to help parents and students save for anticipated education expenses.

    • Does not require earned income to contribute; however, if individual contributing to the Coverdell IRA does have earned income, it must be within IRS Guidelines (refer to IRS Pub.590)
    • Maximum contribution per child (age 18 or younger) per tax year is $2,000.00
    • Contributions are not tax deductible
    • Withdrawals are tax free if used to pay for qualified education expenses
    • All funds in a Coverdell ESA must be distributed to the designated beneficiary by 30 days after attaining age 30
    • Jeanne D’Arc Credit Union offers IRA Statement Savings Accounts, IRA Money Market Savings Accounts or IRA Certificates of Deposit for your retirement savings
  • Simplified Employee Pension (SEP) IRA

    A Simplified Employee Pension (SEP) IRA is established by an employer for employees and can be a significant source of retirement income.

    • Must be self-employed or work for someone who is
    • Employer must make contributions for all eligible employees
    • Union employees, non-resident aliens or employees who received $600.00 or less in compensation during the year may be excluded from eligibility
    • Contributions made by the employer are based on the first $280,000.00 of compensation for tax year 2019 and $285,000.00 of compensation for tax year 2020
    • The same percentage of compensation must be contributed for all eligible employees
    • Contributions are limited to the lesser of $56,000.00 or 25% of compensation for tax year 2019 and $57,000.00 or 25% of compensation for tax year 2020
    • Contributions to a SEP IRA are made only by the employer and are a tax deduction only for the employer
    • Contributions can be made up to the employer’s tax filing deadline which could be up to October 15 of the tax year
    • Each employee is always 100% vested in all contributions made to his or her SEP IRA
  • Transfers & Rollovers

    There are two ways to move your IRA funds.

    • A Trustee Transfer which is done between financial institutions, with the paperwork being initiated by the receiving financial institution. This is not a reportable transaction to the IRS.
    • A Rollover is initiated when an individual makes a withdrawal by check from one IRA and deposits the funds into another IRA elsewhere within the 60 calendar day time limit. The IRS imposes a restriction of one rollover per individual per 365 days. This is a reportable transaction to the IRS and must be indicated on your tax return for the year in which the Rollover is processed. We can assist you with these transactions.

    The best way to move funds from a former employer-sponsored retirement plan (i.e., 401(k), Profit Sharing, 457 Plan, etc.) to an IRA is by a Direct Rollover. A Direct Rollover is the direct payment of your vested interest in an employer-sponsored retirement plan to an IRA Trustee or Custodian for your benefit. You must initiate the rollover through the company that is handling your retirement plan. We can assist you in completing any documentation that is required by your former employer to initiate the process. Upon payout, you will receive a check from the employer plan manager that is made payable to “Jeanne D’Arc Credit Union FBO (for the benefit of) your name“. The check may either be mailed directly to Jeanne D’Arc Credit Union or to you. If the check is mailed to you, it is your responsibility to make sure the check is deposited into your Jeanne D’Arc IRA account.

Retirement & IRA investment options:

  • IRA Savings Accounts
  • IRA Money Market Savings Accounts
  • IRA Certificates of Deposit

Please consult a tax advisor to determine how Federal, State and Local tax laws affect your deductibility and what plan is best for your needs.

Still Have Questions?

To open any IRA account, contact our Retirement Plans Manager, Louise Carvalho by email Louise.Carvalho@jdcu.com or call 978-323-4922.