Think FIRST for IRA’s & Retirement!!

If you have earned income, you may be able to take advantage of an IRA from First Federal. Annual or periodic contributions are allowed, with your choice of terms for your investment-fixed or variable rate. Contributions are allowed up to the tax filing date, without extensions. Tax-free rollovers and transfers are also welcome. There are no set-up or annual service charges, and owners and beneficiaries enjoy various payout options.

To Top

Traditional IRA

If you’re under 70 ½ years of age, consider the Traditional IRA. Contributions are tax-deductible (subject to certain Modified Adjusted Gross Income limitations) and interest earned is tax-deferred. Enjoy penalty-free distributions after age 59 1/2. You can actually get penalty-free distribution to pay certain higher education expense or for first-time home purchases.

• Limited to individuals under 70½ years of age
• Tax-deductible contributions subject to Modified Adjusted Gross Income (MAGI) limitations.
• Interest is tax-deferred
• Penalty-free distributions at age 59½, higher education expenses or first-time home buyer (additional reasons apply), death, and disability.
• Mandatory distribution requirements begin at age 70½

  To Top

Roth IRA

• No age requirements
• Contributions subject to Modified Adjusted Gross Income limitations
• Qualified distributions are penalty and tax-free if funds meet a five year holding period at age 59½ or first time home buyer
• No mandatory distribution requirements

  To Top

Coverdell Education Savings Account (CESA)*

• Used for qualified primary, secondary, and higher education expense
• Contributor must meet MAGI limitations
• Designated beneficiary must be under 18 years of age
• Funds must be distributed by age 30
• Unused funds may be rolled over to family members

*Formerly referred to as Education IRA.

To Top

SMALL BUSINESS RETIREMENT ACCOUNTS

Simplified Employee Pension (SEP) Account

Any employer with no more than 100 employees, and has no other qualified plan, may establish a SIMPLE plan.

• Eligible to any employer who maintains no other qualified plan
• May be established up to the tax-filing due date, plus extensions
• Tax-deductible contributions are made by the employer on behalf of all eligible employees
• All employees age 21 or older who have worked three of the preceding five years receive a contribution
• Contributions are limited to 15% of compensation or $30,000
• Contributions are invested in IRAs
• General rules regarding Traditional IRAs apply

  To Top

Savings Incentive Match Plan for Employees (SIMPLE)

• Eligible to any employer with no more than 100 qualified employees who maintains no other qualified plan
• Contributions made to each of the eligible employees who earned at least $5,000 during two preceding years
• Either a matching contribution or a non-elective contribution is made
• Employees may defer up to $6,000 each year
• Funds must be held in the plan for two years
• Distributions subject to same rules as Traditional IRAs

  To Top