Saving & Investing

If you need help calculating a personal budget, retirement strategy, or savings plan, check out CUNA's Finance Calculators page.

Share Certificates
CFCU Community Credit Union offers share certificates (SCs), which are longer-term investments yielding a higher dividend than regular savings. SCs are available for a minimum investment of $500 for terms from six to 60 months.

Since rates on SCs change periodically, you should call any of our offices for our current rates and terms. There may be a penalty for early withdrawal of funds. Check out our current Dividend Rates.

Individual Retirement Account (IRA)
IRA accounts shelter earnings from taxes until the depositor retires or withdraws the funds. They provide important tax advantages, along with an opportunity to build a more comfortable retirement. CFCU IRAs have no service fees or maintenance fees, and require only a $1.00 minimum balance to earn dividends.

IRA dividends are calculated by the average daily balance method, which applies a periodic rate to the full amount of the principal in the account each day. For current IRA rates, check out our Dividend Rate Sheet.

If you have specific questions about CFCU IRAs, or would just like more information, call 607-257-8500 for all the facts.

Compare IRAs

TRADITIONAL IRA

How does it work?
You can contribute to a traditional IRA if you earn compensation and you will not reach age 70 1/2 by the end of the year. If you file a joint tax return, you can treat your spouse's compensation as your own. All earnings in the traditional IRA are not taxed until a later date, when they are withdrawn. The ability to defer taxes on the earnings, and to withdraw at a time when you may be in a lower tax bracket, can mean more after-tax dollars for your retirement.

Who can contribute?
Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation).

How much can you contribute?
For 2005, total combined contributions to Roth and traditional IRAs up to $4,000/year or 100% of compensation, whichever is less. For 2006 through 2007, people over age 50 can make an additional "catch up" deposit of $1,000.

Who can make deductible contributions?
Fully deductible contributions:

•Single individuals not active in employer retirement plans (regardless of income).

•Single individuals active in employer retirement plans with modified adjusted gross income from the federal tax form of $50,000 or less.

•Married couples with neither spouse active in an employer retirement plan (regardless of income).

•Married individuals active in employer retirement plans with joint tax returns showing modified adjusted gross income from the federal tax form of $70,000 or less.

•Married individuals who are not active in employer retirement plans with spouses who are, as long as modified adjusted gross income from the federal tax form is $150,000 or less for the previous tax year.

•Individuals with incomes exceeding the above limits may be able to make deductible contributions of less than $4,000.

What are the tax advantages?

• Earnings grow tax-deferred until withdrawn.
• Contributions may be tax-deductible.

When can you withdraw without restrictions?
Withdraw penalty-free for any of the following reasons:

• Qualified higher-education expenses
• First-time home purchase (Lifetime limit for exemption on first-time home purchase is $10,000)
• Age 59 1/2
• Disability
• Qualifying medical expenses exceeding 7.5% of income
• Payment to beneficiaries upon the owner's death
• Payment of health insurance premiums while unemployed

ROTH IRA

How does it work?
Unlike traditional IRAs, your contributions to a Roth IRA are never tax deductible. However, the money in your Roth IRA, including earnings, can be withdrawn tax free. Of course, you must conform to the plan provisions to get this tax-free advantage.

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 (single filers)
  • Up to $150,000 (joint filers)
• Reduced contributions allowed for higher incomes (up to $110,000 for single filers and $160,000 for joint filers)

How much can you contribute?
For 2005-2007, total combined contributions to Roth and traditional IRAs up to $4,000/year or 100% of compensation, whichever is less. For 2005-2007, people over age 50 can make an additional "catch up" deposit of $1,000.

Who can make deductible contributions?
No one can deduct contributions.

What are the tax advantages?

• Most contributions can be withdrawn tax and penalty free at any time.
• After the account has been open five tax years, earnings can be withdrawn tax and penalty free for any of these reasons: age 59 1/2, disability, death, or a first-time home purchase. (Lifetime limit for exemption on first-time home purchase is $10,000)
• Earnings can be withdrawn penalty free for the same reasons as those for penalty-free withdrawals from traditional IRAs. (Withdrawal may be subject to tax)

When can you withdraw without restrictions?

• Earnings are tax free if account is open for five tax years and withdrawn for a qualified reason (age 59 1/2, disability, death, or a first-time home purchase. [Lifetime limit for exemption on first-time home purchase is $10,000])
• Not required to start withdrawals at age 70 1/2.

Compliance News

•IRS promotes new retirement savings tax credit
The Internal Revenue Service (IRS) is encouraging qualified taxpayers to plan now to take advantage of the new tax credit designed to help low- and middle-income workers to save for retirement. The nonrefundable tax credit, which will be available for tax years 2002 through 2006, provides a credit of up to 50% of the first $2,000 contributed to IRAs, 401(k)s and certain other retirement plans.

The credit is available for joint returns with adjusted gross income (AGI) of $50,000 or less, head of household returns with AGI of $37,000 or less, and single returns with AGI of $25,000 or less. The individual must also be age 18 and older, not a full-time student, and not claimed as a dependent on another person's tax return.

CFCU Savings Bonds

Invest in America
You can now buy United States Savings Bonds at any CFCU branch. Savings Bonds are safe, they offer a relatively good rate of return and do not require large investment amounts. They are a popular way to save toward an education and make great gifts. For more information, call 607-257-8500.