At Fairfield Federal Credit Union, we offer three types of IRA accounts: Traditional, Roth and Coverdell Education Savings Account.

IRA Frequently Asked Questions

1. What is a traditional IRA?
A traditional IRA is a type of retirement plan that has been in existence since 1975. Traditional IRAs offer tax-deferred earnings and the possibility for tax-deductible contributions. These tax advantages make the traditional IRA a powerful tool in creating a balanced, long-term savings plan.

2. What is a Roth IRA?
A Roth IRA is an individual retirement account created by the Taxpayer Relief Act of 1997. Named for the late Senate Finance Committee Chairman William Roth, Jr., this IRA offers generous incentives to boost your retirement savings, as well as more ways to use your nest egg.

3. How does Roth IRA work?
Unlinke traditional IRAs, contributions to a Roth IRA are never tax-deductible. However, the money in your Roth IRA, including earnings, can be withdrawn tax-free. Of course, you must conform to certain tax requirements to get this tax-free advantage.

4. How much can I contribute to a Traditional IRA?
A member under 50 can contribute up to $5,000 for 2008 through 2010. For owners age 50 or older, your annual contribution limit is $6,000 for 2008 through 2010.

5. How much is the annual contribution limit?
The annual contribution limit for someone under age 50 is $5,000 for 2008 through 2010. The annual contribution limit for someone age 50 or older is $6,000 for 2008 through 2010.

6. What is the most I can contribute to a Coverdell ESA?
The total contributions each year to each child's Coverdell ESA cannot exceed $2,000. If you're eligible, you can contribute the full amount for each child. For example, if you have three children and each has his or her own Coverdell ESA, you can contribute $6,000 ($2,000 to each ESA).

* The Credit Union provides no legal advice to members, and provides the foregoing information from a reliable resource to give our members a basic understanding of these services. You should consult with your tax or legal adviser regarding any particulars and the current status of applicable federal and state laws.