We've developed an easy-to-use guide to assist you in determining whether you are eligible to contribute to a Traditional and/or Roth IRA. Simply review the assumptions, use the flow chart to determine where to look on the Key, and review the Key to determine your eligibility.

Once you determine your eligibility, we recommend you review your options with a competent tax advisor prior to deciding whether to contribute to a Traditional IRA, Roth IRA or both.

Chart Your IRA Eligibility

If you are already a PSECU member and would like to Open or Service an Existing IRA, you can apply online or contact the PSECU Call Center.

Open or Service an IRA

For PSECU Call Center information including telephone numbers and hours of operation, Click Here!

With our Retirement Central, you have access to online information and tools to help put you on the right track for a financially sound retirement. Whatever your age, finances or saving experience, this is the right place for you to be to get started. Learn more.

Many ideals are changing in today's society.

For instance:

• The trend of changing employment more frequently does not allow individuals to acquire great reserves in company pension plans.
• Many new entrepreneurs striking out on their own cannot offer retirement options to themselves or their employees until the company is more financially secure.
• Social Security is no longer seen as the answer to retirement funding.

Individuals need to take the lead in building their retirement nest egg.

Imagine for a moment that you have just received a paycheck from your company. You look at your payroll summary and notice that there are no federal income taxes withheld. Your initial reaction is that something is wrong. It's not, if this check is from your Roth IRA.

Two factors make this possible:

• First, the money you contribute to a Roth IRA has already been taxed. Therefore the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines.
• Second, this retirement savings vehicle allows the money you contribute to grow tax-deferred. If you do not withdraw any of the earnings until you have had a Roth IRA for at least 5 years, and satisfy one of the qualifying events, those tax-deferred earnings become tax-free.

Individuals may contribute up to $5,000 per year if their modified adjusted gross income (MAGI) is less than $101,000. If an individual's MAGI is between $101,000 and $116,000, they may contribute a reduced amount adjusted for their income. Married couples filing jointly may contribute up to $5,000 each if their MAGI is less than $159,000. Contributions for joint filers are reduced for MAGIs between $159,000 and $169,000.

Roth IRA contributions may not be made by individuals with MAGI of more than $110,000, or couples with MAGI of more than $160,000. In addition, if an individual has reached age 50 or older by the close of the taxable year, an additional catch-up contribution of $1,000 may be made.

If you are an eligible individual and fall within certain income limitations, you may be eligible for a tax credit of up to 50% of your retirement savings contributions that do not exceed $2,000. An eligible individual is defined as someone who is:

• 18 years of age as of the close of the taxable year,
• not a dependent of another taxpayer, and
• not a full-time student.

If you satisfy two conditions, you may make tax-free and penalty-free withdrawals from your Roth IRA. First, a Roth IRA must have been open for a minimum of 5 years. Second, the withdrawal must be made after the occurrence of one of the following events:

• Age 59½,
• death,
• disability, or
• first home purchase.

Distributions which meet the above requirements are referred to as "qualified distributions." While you may take distributions from your Roth IRA at any time, distributions which are not qualified distributions will be subject to taxes (and in some cases early distribution penalties) to the extent they exceed your aggregate contributions to Roth IRAs.

Yes. There are specific rules that govern the process of converting funds from a Traditional IRA to a Roth IRA.

Some of these rules include:

• Your MAGI must be $100,000 or less
• If you are married, you must file a joint income tax return
• You must pay taxes on all the pre-tax dollars you convert
• The conversion must be completed within 60 days

Our representative may suggest you seek advice from a competent tax advisor to confirm whether moving your funds is beneficial to you.

Unlike the Traditional IRA, there are no required minimum distributions at age 70½. Your dollars can continue to grow until you need them. There are special distribution requirements when these plans pass to your beneficiaries.