IRAs offer a great way to save for retirement, first homes, or higher education. Downriver Community Federal Credit Union offers Traditional, Education, and Roth IRA´s. Opening a Downriver Community Federal Credit Union IRA requires a minimum deposit of $100. Members who open Roth or Education IRA´s can make regular deposits through payroll deduction for added convenience.

This IRA is available to any member with earned income and who is under age 70 1/2 years. If you are using the funds for a first time home purchase or educational expenses, you will not be charged penalties for early withdrawal. However, you will have to pay taxes on the withdrawal. This applies if the first time home-buyer is the IRA owner or spouse, or children, grandchildren, parents or grandparents of the owner or spouse. Educational expenses may be for the IRA owner or spouse; or children or grandchildren of the owner or spouse. There is a lifetime limit on penalty-free withdrawals of $10,000.

The Roth IRA is available to individual members whose income is less that $110,000 and couples whose combined income is less that $160,000. There is no age limit for members wishing to contribute to a Roth IRA. You may withdraw contributions tax free at any time. However earnings may be taxed unless the account has been opened for at least five years and the owner is 59 1/2, disabled, deceased, or buying a first home.

This IRA is available to individual members whose income is less that $110,000 and couples whose combined income is less that $160,000. This IRA is set up as a custodial or trust account intended exclusively to provide funds for the higher education of a beneficiary (a child under age 18.)

Contributions may be withdrawn at any time for any reason. Earnings can be withdrawn tax-free only if used to pay for tuition, the cost of books, supplies, and equipment for the beneficiary. If the money is not spend on education expenses by the time the beneficiary is age 30, the earnings will be subject to income tax. Withdrawals that are not used for education expenses may be subject to a 10% penalty unless the distribution is a result of the beneficiary´s disability, or it occurs after the beneficiary is deceased.

The following chart illustrates how savings will accumulate with an IRA. This example is based on an interest rate of 5%.