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Traditional IRA

Traditional IRA

  • Easy to maintain.
  • Tax advantages*—you may be able to deduct your total annual contributions on federal returns.
  • Earnings are tax free from federal taxes until you withdraw it from your account.
  • Your tax deferred money will grow in Traditional IRA.
  • One may contribute to the Traditional IRA until age 70 ½.
  • You may withdraw money from your Traditional IRA at any time. The taxable portion of the withdrawal will be taxed as ordinary income.  Taxable amounts you withdraw prior to age 59 ½ will result in an interest penalty and may be subject to the IRS  early distribution and early certificate withdrawal penalty.*

*Confer with your trusted tax preparation specialist about specific deduction, penalty and income tax filing requirements.

Traditional IRA Advantages

  • A traditional IRA is easy to maintain.
  • You may be allowed to deduct your traditional IRA contributions on your federal income tax.
  • The earnings are tax deferred.  Every penny of earnings in your traditional IRA are 100% free from federal income tax until you withdraw the money from your account.
  • If you are under age 70 ½, married and file a joint federal income tax return and your spouse has more earned income than you do, you may make a spousal contribution to your Traditional IRA.
  • Contributions for a tax year may be made in the tax year or up to April 15 for the prior tax year.
  • Your traditional IRA contribution is fully deductible if you (you and your spouse) are not an active participant(s) in a retirement plan at work, regardless of income level.

Withdrawing Money From Your Traditional IRA

You may withdraw money from your traditional IRA at any time and the taxable portion of that withdrawal will be taxed as ordinary income. Distributions you receive before you reach age 59 ½ will result in a credit union interest penalty and may be subject to an IRS penalty.  However, the IRS penalty does not apply to distributions that are:

  • Used for a qualifying first-home purchase. ($10,000 lifetime limit)
  • Used for qualifying higher education expenses.
  • Paid while you are disabled.
  • Paid in equal payment periods.
  • Paid for certain deductible medical expenses.
  • Used for health insurance by certain unemployed individuals.

These conditions are general and each situation is unique.  We strongly recommend that you consult with a tax specialist prior to making a withdrawal.

CONTACT

168 E Fairmount Ave
Lakewood, NY 14750

(716) 665-7000
HOURS

Open today · 9:00 am – 5:30 pm

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OUR MISSION STATEMENT

Southern Chautauqua Federal Credit Union is committed to providing its members with the professional financial services they have come to expect. It will use its resources wisely and be held accountable to its members.