Buffalo Metropolitan Federal Credit Union

Products and Services

IRAs (Individual Retirement Accounts)

Savers traditionally use IRAs (Individual Retirement Accounts) for retirement. Since 1998, two types of IRAs have encouraged people to save for life's other main events. ESAs (Education Savings Accounts) and Roth IRAs make it possible for you to save for retirement and for a child's postsecondary education or your first house. This is how they work:

ESA (Coverdell Education Savings Account).

ESAs allow you to save for any postsecondary education by investing up to $2,000 a year per child younger than age 18. The contribution is not tax-deductible. Instead, earnings grow tax-free and you pay no taxes or penalties on money withdrawn to pay for qualified expenses before the beneficiary reaches age 30. Otherwise you pay taxes on any earnings, plus an additional 10% penalty.

Qualified expenses include tuition, fees, books, elementary and secondary school expenses, computer technology or equipment--even online access--that the beneficiary uses while in school, and equipment required for enrollment or attendance at nearly any postsecondary educational institution. Certain room and board expenses may also qualify.

If you're a single filer, you can contribute the full amount per year if your modified adjusted gross income [from line 38 on your federal form 1040, as adjusted] is less than $110,000. The contribution limit gradually falls as your modified adjusted gross income climbs toward $110,000, at which point you can't contribute to an education IRA. For married couples filing jointly, the income limit is $220,000.

Roth IRA.

The Roth IRA allows you to contribute up to $5,000 a year in tax year 2012. Like the ESA, contributions to a Roth IRA are not tax-deductible. Instead, you pay no taxes when you withdraw the money provided it's been in the account at least five years and: You are older than 59-1/2, or you become disabled, or you die and it's paid to your beneficiary, or you use the money for a first-time house purchase ($10,000 lifetime withdrawal limit).

Unlike the traditional IRA, which requires you to begin withdrawing money at age 70-1/2, the Roth IRA has no such requirement. You can let the money keep working, while earnings continue to grow tax-free, for as long as you like.

For single filers in tax year 2012, the income limit for Roth IRAs spans from $110,000 to $125,000, at which point you can't contribute to an Roth IRA. For married couples filing jointly, the income limit spans from $173,000 to $183,000 for tax year 2012.

Even the traditional IRA is better with higher income limits and new penalty waivers. Stop by Buffalo Metropolitan for all the details about how you can stretch your retirement savings with new and improved IRAs.

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Share Certificates

Banks offer certificates of deposit (CDs); credit unions offer Share Certificates. Put your money to work for you by opening a Share Certificate and earn a higher rate of return! We have many different terms to meet your specific objectives. Terms range from six months to sixty months. The minimum balance for a share certificate is $500.00.

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Insured Security

Your savings are federally insured to at least $250,000.00 by the NCUA (National Credit Union Administration).

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