CW IRA Savings

It might be tempting to view your 401(k) as a source of emergency funds, but before you dip into your retirement account for cash, explore alternatives. As a general rule you want to avoid borrowing or withdrawing funds from your 401k unless there is absolutely no other option. If you take cash out of your 401k before reaching the age of 59 ½ you will face a 10% penalty as well as pay taxes on the withdrawal. You will also miss out on the potential growth that those funds would have had if left in the 401k until retirement. Learn more about this option here.

Yes, you can maintain both types of IRAs at the same time. You can even make contributions to both types of IRAs in the same year. But your contributions to both Roth and traditional IRAs cannot exceed the maximum contribution limit for all IRAs.

There are limits on the amount of income one can make during a given year—and the limits change from year to year.

Please visit the IRS website for details.

A Roth IRA is an individual retirement account created by the Taxpayer Relief Act of 1997. Roth IRA accounts are traditionally used as retirement savings accounts. They allow limited contributions to be made throughout the tax year and can be withdrawn within 5 years after establishing the account provided you are aged 59 1/2 or older.

Anyone can contribute to a Roth IRA account, if they have income derived from work efforts or are the spouse of someone with income derived from work efforts and compensation in the form of wages, tips, salaries, bonuses or professional fees.

Yes, you will earn interest on the funds that are on deposit at the credit union in your Roth IRA. To see a complete list of all CW Dividend rates, please click here.

No. The amount you contribute to your 401(k) or other employer-sponsored plans will not be affected by your Roth IRA.

• Valid government issued ID, passport, or military identification showing current address. If the address is not correct, bring a utility bill, bank statement, or paystub showing the correct address. 
• Social Security Number or TIN 
• Opening deposit of $2,000 minimum 
• Beneficiary information (Name, address, Social Security number, birthdate) 
• If completing a rollover, bring your most recent statement from current IRA or 401K account. 
• IRA accounts require special processing and cannot be completed online at this time. Please contact the credit union directly if you wish to open an account of this type or schedule an appointment so we may assist you with the requirements needed to process such a request. 

• Waiting more than 60 days to deposit the 401K check into a new IRA. - If the check has been made payable directly to you by the plan administrator, it must be deposited into another retirement account by the 60th day or it becomes taxable income for that year. 
• Doing multiple rollovers in the same 12 month period. – In most cases the IRS limits you to one rollover per year involving the same IRA. If you do complete a second rollover in the same year the IRS can assess an early withdraw penalty and add the untaxed portion of your IRA funds to your taxable income for that year. There are some exceptions to this rule, including: 
  • Rollovers from an employer sponsored plan where the rollover is completed by the plan administrator 
  • Conversions where you roll over from a traditional IRA to a Roth IRA 
  • When a trustee, such as your credit union, completes the transfer from one IRA to another IRA on your behalf