Individual Retirement Accounts

An IRA is a personal savings plan. Everyone who has earned income can contribute to an IRA and each dollar you invest earns dividends to guarantee your comfortable retirement. There is no minimum age, so the sooner you open an IRA, the longer you benefit from compounding dividends.

You can contribute funds to an IRA each year. Contributions for a given year can be made up to the due date for that year’s tax return (usually April 15th). A number of IRA options are available at HEBFCU, helping you select the one that best suits your retirement objectives. We recommend that you consult with your tax advisor on additional benefits and requirements of IRAs.

Traditional IRA

Anyone who has earned income can contribute to a Traditional IRA. Depending on your income and participation in an employer-sponsored retirement plan, all or part of your contribution may be tax-deductible.

With a Traditional IRA, earnings are tax-deferred until withdrawn from your account. When you begin your distributions, you will pay regular income tax on funds you withdraw. Keep in mind that your overall tax rate may be considerably lower at that point. Withdrawals are permitted after age 59½, and generally must start when you reach age 72 (73 if you reach age 72 after Dec. 31, 2022).

• Contributions may be fully or partially deductible, depending on your income and availability of an employer sponsored plan. Check with your tax advisor to determine your eligibility
• You can contribute up to $6,500 (for 2023) and $7,000 (for 2024) of taxable compensation to all IRAs if you’re under age 50
  • Members 50 years of age or older before the end of the tax year may contribute up to $7,500 (for 2023) and $8,000 (for 2024) of taxable compensation to all IRAs
• You can make certain withdrawals prior to age 59½ without IRS penalty. Check with your tax advisor regarding these and other allowable criteria for withdrawals prior to 59½
• Earnings are tax-deferred and your investment will grow tax-free until you withdraw funds
• You can choose to invest in
  • HEBFCU IRA Variable Share Account with an opening balance as low as $50 and add additional deposits until the maximum annual contribution is reached*
  • HEBFCU IRA Term Share Certificate with a minimum of $1,000 for a 12-, 24-, 36- or 60-month term and add additional deposits until the maximum annual contribution is reached
• Balances in an IRA may result in preferred loan rates or waived service charge on Classic Checking Account

If the IRA contributor is covered by a retirement plan at work with a modified adjusted gross income that exceeds the income limits in the table below, contributions to a Traditional IRA cannot be deducted. A non-deductible Traditional IRA, which works like a Traditional IRA with the exception of contributions not being deductible, is an option.

Roth IRA

Contributions to a Roth IRA are always made with non-deductible, after-tax dollars. The advantage is that your withdrawals are tax-free, as long as the money has been in the account five years and you have reached age 59½. Unlike the Traditional IRA, there are no mandatory withdrawal requirements. You can make a full contribution to a Roth IRA if your modified adjusted gross income is within the following limits:

• Contributions are non-deductible, meaning that you fund them with after-tax money
• Earnings will grow tax-free
• Qualified withdrawals are tax-free if made after the account has been open and funded for five years and qualified withdrawals are made after age 59½
• You can make certain withdrawals prior to age 59½ without IRS penalty. Check with your tax advisor regarding these and other allowable criteria for withdrawals prior to 59½
• You can contribute up to $6,500 (for 2023) and $7,000 (for 2024) of taxable compensation to all IRAs if you’re under age 50 – see income limitations 
  • Members 50 years of age or older before the end of the tax year may contribute up to $7,500 (for 2023) and $8,000 (for 2024) of taxable compensation to all IRAs – see income limitations
• You can choose to invest in
  • HEBFCU IRA Variable Share Account with an opening balance as low as $50 and make additional deposits until the maximum annual contribution is reached*
  • HEBFCU IRA Term Share Certificate with a minimum of $1,000 for a 12-, 24-, 36- or 60-month term and make additional deposits until the maximum annual contribution is reached
• Balance may result in preferred loan rates or waived service charge on Classic Checking Account
• There are no age limits for contributions and distributions

* This rate is subject to change quarterly and may change after the account is opened