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Your savings insured to
at least $100,000 by the
National Credit Union Administration, a U.S. Government Agency.
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Section contents:
Term IRAs are tax-favored plans to accumulate retirement funds
in a one- to five-year term account earning higher dividends. Contributions may be
tax deductible and dividend earnings may be tax deferred.
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 Eligibility |
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Anyone with earned income, or a non-working spouse. Contact your tax accountant/lawyer to confirm eligibility. |
Summary |
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Northrop Grumman FCU Term IRAs offer a variety of benefits to members:
- Federally insured separately by NCUA to $250,000
- Possible tax deductible contributions
- Dividends compound monthly and possibly are tax deferred
- Periodic contributions for all accounts
- No required contribution
- Rollovers
- Customized withdrawals
- Lump sums
- Monthly payments
- Non-working spouse may open an account and contribute up to $2000 annually to an IRA. Confer with tax advisor for tax benefits.
- Reinvestment of funds in a Traditional IRA distributed from a 401K plan
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Minimum Requirements |
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The following minimum requirements apply to IRA certificates:
- Minimum opening deposit of $2,000
- Maximum annual contribution, ask your tax advisor
- Choice of terms - 1, 2, 3, 4 and 5 years.
- Qualify for even higher dividends with a bonus
rate when the account is opened with at least $40,000.
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| Contribution Limits |
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The limit for an individual’s IRA contribution rose
by 50% in 2002 and more than that for people who will be age 50 or over on
December 31, 2002. The following chart summarizes the limits for 2002 and
beyond:
| Tax Year |
Yearly Individual
Contribution Maximum |
Age 50 and Over
May Add: |
| 2002-2004 |
$3,000 |
$ 500 |
| 2005 |
$4,000 |
$ 500 |
| 2006-2007 |
$4,000 |
$1,000 |
| 2008 |
$5,000 |
$1,000 |
Eligibility to
contribute to a Roth IRA will decrease at higher income levels.
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| Frequently Asked Questions |
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Q: Why
should I save in an IRA? I don't like the idea of having my money tied up until retirement.
A: Tying up dollars for extended periods can seem risky, particularly for those funds
you may need in an emergency. The new IRA laws make investing in IRAs less confining. For more information about your options, contact a
Call Center Representative at 800-633-2848 or an
Investment Counselor through our
wholly-owned subsidiary, Flight Plan Financial
Services, Inc.
Q: What happens if there is an emergency, such as losing my job, and I find I need the funds?
A: In an emergency, you can elect to withdraw all or part of the funds. While there may be a penalty for early withdrawal, you don't have to worry that your money is completely inaccessible. |