Roth IRA

A Roth IRA Share Account allows you to withdraw the amount of your contributions at any time, tax free, and in most cases penalty free.

After a Roth IRA has been open for five successive tax years, members may take tax-free and penalty-free withdrawals of earnings if they meet any of the following qualifying conditions:

• Upon the owner's death 
• The IRA owner reaches age 59 1/2 
• The IRA owner becomes permanently or totally disabled. 
• The IRA owner uses the funds for a first-time home purchase. The person buying the home may be the IRA owner or spouse; or the child, grandchild, parent, or grandparent of the owner or spouse. There is a lifetime cap of $10,000 per IRA owner; or $20,000 for married couples.

In accordance with the rules and regulations of the IRS, any one individual may not contribute more than $2000 annually to an IRA. Contributions to a Roth IRA Share Account are not tax deductible. You can contribute to the account after age 70 1/2 provided you are earning compensation. Under the Roth IRA, you are not required to take withdrawals at age 70 1/2.

Members can convert their existing IRAs to a Roth IRA.

Dividends are credited and compounded quarterly.

Roth Conversion IRA

The Taxpayers Relief Act of 1997 gave taxpayers the ability to convert their current IRA funds into a Roth if the IRA owner’s single or joint modified adjusted gross income is less than $100,000. This converted money is kept separate from a Roth Contributory IRA at PSECU. The deductible money that is converted will be taxed upon conversion.

Withdrawals may be subject to both tax and penalty depending on whether the reason for withdrawal is considered to be a qualified distribution. For more information concerning withdrawals, see Roth IRA Withdrawals.

Please consult a tax advisor to determine if this option is for you.