IRA Accounts

An Individual Retirement Account (IRA) is an excellent tool for retirement savings. Unlike most investments, depending on the type of IRA you choose, contributions may be tax deductible and will grow either tax-deferred or tax-free.

Cooperative Federal offers Traditional IRAs, Roth IRAs, and SEP IRAs. Thinking of opening an IRA and don’t know which one is best for you? The information below provides a summary of the differences.

For more information about IRAs, contact:
Gerry Russo
Operations Assistant
(315) 473-0210
gerryrusso@coopfed.org
(Tues. - Fri.)

Leyanis de la Peña
Member Service Lead
(315) 473-0282
leyanisdelapena@coopfed.org
(Mon. - Fri.)

The following information is not intended as tax advice. Please consult a tax professional for specific tax information.

Traditional IRAs

Who Can Contribute?
Anyone under age 70 ½ who has income from compensation (or who is filing jointly with a spouse who has income from compensation).
Tax Advantages
Money in a Traditional IRA grows tax-deferred and is taxed when withdrawn. If you withdraw the money before age 59½, you generally must pay a penalty, subject to certain exceptions. (Exceptions include disability; death, first-time home purchase, with a lifetime limit for exemption on first time home purchase of $10,000.) If you think your tax rate in retirement will be lower than it is now and you do not plan to withdraw the money before age 59½, a Traditional IRA may be a good choice for you.
Contribution Deadline
Must be opened or funded by the April 15 tax filing deadline to receive deductions. A filing extension won’t buy extra time.

Roth IRAs

Who Can Contribute?
Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation), with the following Modified Adjusted Gross Income (from the federal tax form):

  • Up to $95,000 for single filers
  • Up to $150,000 for joint filers

Reduced contributions allowed for higher incomes:

  • Up to $110,000 for single filers
  • Up to $160,000 for joint filers
Tax Advantages: Federal tax-free growth
Money in a Roth IRA is not federally taxed when it is withdrawn, and you can withdraw your contributions at any time without paying a penalty. If you think that when you retire your tax rate will be higher and/or you might need the money before age 59½, the Roth IRA might be the better choice for you to consider. Early withdrawal of earnings may be subject to penalties or taxes.
Contribution Deadline
Must be opened or funded by the April 15 tax filing deadline to receive deductions. A filing extension won’t buy extra time.

SEP IRAs

A Simplified Employee Pension Plan, commonly known as a SEP-IRA, is a retirement plan specifically designed for self-employed people and small-business owners

Who Is Eligible?
You can establish a SEP-IRA if you:

  • Are a sole proprietor, in a partnership, or a business owner (of either an unincorporated or incorporated business, including Subchapter S corporations);
  • Earn any self-employed income by providing a service, either full-time or part-time, even if you are already covered by a retirement plan at your full-time job.
Tax Advantages
Tax-deductible contributions
Up to 25% of compensation, as much as $44,000 for the 2006 plan year and $45,000 for the 2007 plan year.
Tax-deferred growth potential
Any investment earnings grow tax-deferred until withdrawn.
Contribution Deadline
Must be opened or funded by the April 15 tax filing deadline to receive deductions.
Cooperative Federal accounts are federally insured by NCUA Cooperative Federal is an Equal Housing Lender
Cooperative Federal is an equal housing lender
Cooperative Federal accounts are federally insured by NCUA