SMCU is pleased to offer a diversity of Individual Retirement Accounts designed for a bright future. Options include:
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Traditional IRAs |
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Roth IRAs |
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Coverdell Education Savings Accounts |
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Simplified Employee Pension plans (SEPs) |
All feature competitive rates, flexible savings, and tax benefits. And with a deposit as low as $100, you can open any type of IRA account-with no set-up fees or annual maintenance costs.
The sooner you start saving for retirement, the more money you'll have. Just compare the long-term earning potential of three IRA owners who, beginning at different ages, each contribute $3,000 every tax year until they reach age 60:
*Figures assume 7% annual return, compounded monthly. Balances are before taxes.
Please consult your tax advisor before making any IRA decisions. When you are ready to open an IRA, visit a branch or contact us at (650) 363-1725.
TRADITIONAL IRA
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Earnings are tax-deferred. |
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Contributions may be tax-deductible, depending on your income and whether or not you have a qualified employer-sponsored retirement plan. |
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Untaxed IRA assets can generally be converted to a qualified retirement plan (employer plan). |
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Funds can be withdrawn after age 59 1/2* without a tax penalty. |
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Distributions must be taken beginning at age 70 1/2. |
ROTH IRA
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Earnings are tax-free.** |
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Contributions are not tax-deductible. |
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Contributions may be withdrawn tax-and penalty-free. |
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Distributions are not required to be taken at age 70 1/2. |
* Check with your tax advisor regarding any withdrawals before age 59-1/2.
**Earnings may be withdrawn only if they satisfy a five-year waiting period AND any one of the following criteria is met: reaching age 59-1/2, disability, first-home purchase, or death (as payment to beneficiaries).
COVERDELL EDUCATION SAVINGS ACCOUNT (ESA)
Designed to allow funds to be set aside to cover the future cost of a child's education, a Coverdell ESA promises high dividends.
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Deposits must be for a designated beneficiary under the age of 18. |
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Distributions and earnings are tax-free, provided they are used for qualified education expenses. |
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Qualified expenses have been expanded to include school costs for kindergarten through higher education. |
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Almost anyone may contribute, including grandparents. |
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A child may contribute to his or her account. |
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The maximum annual contribution has been increased to $2,000 per child. |
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Any married taxpayer filing jointly and declaring income up to $190,000 may contribute. |
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The contribution deadline has been extended to April 15th of each year. |
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There are no set-up fees or annual maintenance costs. |
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Generally, you may roll over funds from one Coverdell ESA to a new or existing Coverdell ESA to benefit the same child or and eligible member of the child's family. |
SIMPLIFIED EMPLOYEE PENSION PLANS (SEPs)
A SEP plan enables self-employed individuals to set up a plan for themselves, and allows businesses to provide a retirement plan to employees. A SEP features a greater contribution-and therefore a larger deduction-than an IRA.
Under the terms of a SEP plan, an employer may contribute a percentage of an employee's income up to a specific amount. These contributions are deposited directly into the employee's Traditional IRA.
SEP contributions are excluded from your income if they fall within the limits for maximum contributions. Your employer can provide you with a copy of the contribution agreement that describes the eligibility for determining who qualifies for a SEP.
To learn more about SEP eligibility and contribution limits, please check with your tax advisor. When you are ready to set up an account, please call DirectAssist at (650) 363-1725 or
visit the branch nearest you.
