Individual Retirement Account

478891549 IRA_med

Less taxes now, more retirement later.

Many financial experts estimate that you may need up to 85% of your pre-retirement income in retirement. An employer-sponsored savings plan, such as a 401(k), might not be enough to accumulate the savings you need. Fortunately, you can contribute to both a 401(k) and an IRA.

An Individual Retirement Account (IRA) allows an individual to save for retirement with tax-free growth or growth on a tax-deferred basis.

IRAs are easy to establish and have only a few restrictions. Your Hatboro Federal IRA is maintained in either a Passbook Account or in a Certificate of Deposit (CD).

IRA Passbook Accounts are available with a minimum deposit of $100. Once your account balance reaches $500, you can transfer your funds into a CD IRA account.


With a Traditional IRA, you can contribute up to $5,500 per tax year, or up to $6,500 per year if you are 50 years or older*.

  • 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 or partially deductible depending on your adjusted gross income. Check with your tax advisor.
  • A married person can make a deductible contribution even though his or her spouse is covered by an employer sponsored retirement plan, depending on their 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 for early withdrawal, up to $10,000, if used toward the first time purchase of a home.


With a Roth IRA, you can contribute up to $5,500 per tax year, or up to $6,500 per year if you are 50 years or older*.

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 home-buyers.
  • Higher education costs may be withdrawn, with only the earnings taxable.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 based on 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.


Coverdell Education Savings Accounts, formerly called 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 when withdrawn if used to pay for qualified educational expenses anytime before the child reaches the age of 30.

  • You can contribute up to $2,000 a year for each child under the age of 18*
  • Friends and family members can contribute to the account as long as the maximum contribution per child is not exceeded in a given year.
  • 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 to an Education IRA do not count toward your own IRA contribution limit.

For more information about any Hatboro Federal IRA, contact Cheryl Allen at our Jamison office at 215.918.2722.

*For the 2015 and 2016 tax years.

All IRAs are subject to the terms and conditions established by the Internal Revenue Service.

Current Rates

Each depositor is insured to at least $250,000 by the FDIC.  For more information, go to