Roth IRAs

With a Roth IRA, your retirement savings will grow tax deferred. Although your contributions to a Roth IRA are not tax-deductible, qualified distributions from your Roth IRA will not be included as part of your taxable income. You are eligible to open and contribute to a Roth IRA if you received taxable compensation during the tax year. There is no age limit to opening a Roth IRA; however, there are limitations based on the modified Adjusted Gross Income (AGI) of you and your spouse.

Features & Benefits

For year 2011, you may be able to contribute up to $5,000.00 to your Roth IRA or $6,000.00 if you are 50 or older by the end of 2011. Additional contribution limits may apply depending upon your modified AGI.

Contributing to your Roth IRA
You may contribute to your Roth IRA in several ways:

• Normal contributions
  
• Catch-up contributions of an additional $1,000 if you are age 50 or older
  
• Transferring an existing IRA to BFSFCU
  
• Direct rollover from a retirement plan (once every 12 months)
  
• Indirect rollovers - distributions from a retirement plan can be redeposited to your IRA within 60 days
  
• Spousal contributions
  
• Conversions - take the funds from a Traditional IRA and invest them in a Roth IRA
  
• Re-characterization contributions - reapply funds that were invested in a Traditional IRA

Withdrawing funds
Withdrawals from Roth IRA accounts are tax-free (since you were already taxed on your contributions). You may withdraw funds from your Roth IRA account at any time, but you will incur a 10% early withdrawal penalty if you have not yet reached age 59 and one-half or the IRA has been open for less than five years (some exceptions may apply).