INDIVIDUAL RETIREMENT ACCOUNTS
It’s never too early to start planning for your retirement. Hatboro Federal offers a number of Individual Retirement Accounts (IRA’s) to help make sure you have enough money saved to meet your needs when you retire.

Individual Retirement Accounts (IRA’s) are easy to establish and have few restrictions. Your IRA at Hatboro Federal Savings is maintained in either a Passbook Account or in a Certificate of Deposit.

IRA passbook accounts are available with a minimum deposit of $100.00. Once your balance in your IRA passbook account reaches $500.00, you may transfer your funds into a Certificate IRA account.

Traditional IRA

With a traditional IRA, you can contribute up to $4,000 per tax year, however if you are over the age of 50, you may contribute $5,000. Your contributions may be tax-deductible and earnings grow tax-deferred until you withdraw the funds.

If you are covered by a retirement plan where you work, your IRA contributions may be totally, partially or not deductible depending on your adjusted gross income.

A married person can make a deductible contribution even though his or her spouse is covered by an employer-sponsored retirement plan depending on your combined adjusted gross income.

Withdrawals must begin when you reach age 70 1/2.

Early withdrawal without penalty can be made for higher education expenses.

There is no penalty if early withdrawal, up to $10,000, is used toward the first-time purchase of a home.

ROTH IRA
With a Roth IRA, you can contribute up to $4,000 per tax year, however if you are over the age of 50, you may contribute $5,000. Contributions are not tax-deductible. However, earnings grow tax-free and distributions are generally tax-free in the year received provided certain requirements are met. The account offers a number of benefits.

Tax-free distributions are permitted up to $10,000 for first-time homebuyers.

Higher educational costs may be withdrawn, with only the earnings taxable.

Withdrawals are tax-free after age 59 1/2, or in the event of death or disability.

There is no age requirement as to when you can take distributions.

Your eligibility to make a Roth IRA contribution may be phased out ratably over certain modified adjusted gross income (MAGI) ranges. If you are single, your ability to make Roth IRA contributions phases out when your MAGI is between $95,000 and $110,000. If you are married, your ability to make a Roth IRA contribution phases out when your MAGI is between $150,000 and $160,000.

You can contribute to a Roth IRA even if you are participating in an employer-sponsored plan.

Education IRA

The Coverdell Education Savings Account, formerly know as the Education IRA, is a way to help you save for a child’s education expenses. The earnings in the account are completely tax-free if used to pay for qualified educational expenses anytime before the child reaches the age of 30.

Friends and family members can contribute to the account as long as the maximum contribution per child is not exceeded in a given year.

You can contribute up to $2,000 a year for each child under the age of 18.

Withdrawals for qualified, higher education expenses are tax-free.

The Education IRA can be rolled over to another child in the same family.

Age restrictions do not apply for children with special needs.

Contributions do not count toward your own IRA contribution limit.