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Thinking about retirement can be daunting to anyone- thinking about what you’ll need, how to save, where to save, and how to invest those savings.  Fortunately, there is a smart, simple way to get your retirement funds on the right track- a Roth IRA (Individual Retirement Account).  It’s the retirement savings account that affords you the most ease and peace of mind. You don’t have to worry about what you owe once you decide to retire and withdraw the funds because all the money that you put into this account accumulates completely tax-free. As long as you follow the rules, it’s all yours- growth and all. Another source of stress can be worrying about where you are required invest your money for a certain account.  Roth IRAs are more flexible than other retirement plans because you can invest in just about anything you’d like- stocks, bonds, mutual funds, real estate, and more.
If you haven’t take advantage of this, do it now. You have until your tax return deadline to set up and make contributions for the previous tax year. The government sets a limit on how much you can contribute to a Roth. That limit was $5,000 for 2011 and also for 2012. That means if you act before April 17, you can invest $5,000 now to count for last year, giving you a solid start to your savings. And you have until next year’s tax deadline to invest your $5,000 for 2012.
Of course, there are some rules associated with the Roth IRA.  First, you can only contribute if you have earned income from a job.  Also, you cannot contribute more than you’ve earned.  For example, if you are in college and worked a summer job making $2000, you can only contribute $2000.  There are also income limits for the Roth.  You must make below $110,000 if you are single and $173,000 if you are married filing a joint tax return. The contribution limit is then phased out incrementally if you make between $110,000 and $125,000 (single) or $173,000 and $183,000 (married-joint)
A Roth IRA differs from a Traditional IRA in that you cannot deduct contributions to the Roth, you can make contributions to the Roth after you reach age 70 ½ and you can leave amounts in your Roth IRA as long as you live.  Also, the account or annuity must be designated as a Roth IRA when it is set up.  There are some other great bonuses specific to this account as well.  For example, you may withdraw your contributions (not earnings), tax-free, at any time without having to repay them.  Also, as long as the account has been open five years, the IRS allows you to withdraw up to $10,000/person tax and penalty free to buy your first home.  That $10,000 can include earnings as well.  Finally, although parents should be saving for retirement over their child’s education (since there are loans and scholarships for the latter), you can withdraw contributions to help pay for college.  If you dip into earnings early, you’ll owe taxes, but you will not be required to pay the 10% early withdrawal penalty if you use the withdrawals to pay for college.
MCU makes it really simple to get started saving for retirement by offering Roth IRAs as well as traditional IRAs.  If you are interested in opening and a Roth IRA account to take advantage of these tax benefits, please visit the Members Credit Union web site at www.memcu.com or call (800) 951-8000.  You can also visit the IRS web site here https://www.irs.gov/retirement-plans/roth-iras for more information about Roth IRAs.

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