Savings

University of Michigan Credit Union has savings options to help you make the most of your money. Whether you're looking for a basic savings account, saving for retirement or your next big purchase, UMCU has accounts to fit your needs.

 Fee Schedule

Choosing the IRA that's Right for You

What is the difference between a Traditional and a Roth IRA? The chart below will explain. For more information about IRAs, see your credit union IRA specialist. Be sure to seek the advice of a tax professional if you need more specific tax information.

  Traditional IRA Roth IRA
Income Limits for Contributions No income limits.

Individuals of any age with earned income, whose adjusted gross income is below $127,000 (single) or $188,000 (joint). Allowed contributions begin to phase out at $112,000 (single) or $178,000 (joint). There are no income restrictions for those who want to convert to a Roth IRA.

Contribution Limits Total combined contributions to a Roth and/or Traditional IRA are limited to $5,500 for 2013-2014 for taxpayers under age 50. For those 50 and older by the end of a year, your limit is $6,000 for 2013-2014. 100% of earned income to a maximum of $5,500. Total contributions to a combination of Traditional and Roth IRAs cannot exceed $5,500 for one year. Total combined contributions to a Roth and/or Traditional IRA are limited to $5,000 for 2011-2012 for taxpayers under age 50. For those 50 and older by the end of a year, your limit is $6,000 for 2013-2014
Age Limit on Contributions The year you reach age 70 1/2. No age limit.
Age for Required Distributions The year you reach age 70 1/2. No mandatory withdrawals.
Withdrawal Penalties There is a 10% penalty on withdrawals prior to age 59 1/2 except for withdrawals due to:
• Death
• Disability
• Pre-59 1/2 periodic payments
• Qualifying medical expenses
• Health insurance premiums while unemployed
• Withdrawals up to $10,000 toward the purchase of a first home
• Conversion to a Roth IRA
• Higher education expenses (for owner, spouse, children or grandchildren)

The portion of a withdrawal that is the return of non-deductible contributions is not subject to tax or penalty.

There is a 10% penalty on withdrawals prior to age 59 1/2 except for withdrawals due to:
• Death
• Disability
• Pre-59 1/2 periodic payments
• Qualifying medical expenses
• Health insurance premiums while unemployed
• Withdrawals up to $10,000 toward the purchase of a first home
• Higher education expenses (for owner, spouse, children or grandchildren)

Withdrawals of regular contributions are not subject to tax or penalty.

Tax Advantages Contributions may be fully or partially tax deductible if:

During the 2014 tax year:

• Fully deductible if MAGI is less than $60,000 (single) or $96,000 (joint)
Partially deductible if MAGI is between $60,000 and $70,000 (single) or $96,000 and $116,000 (joint)
No deduction if MAGI is over $70,000 (single) or $116,000 (joint)

During the 2014 tax year, the spouse without earned income:

• Fully deductible if MAGI is less than $181,000 (joint)
Partially deductible if MAGI is between $181,000 and $191,000 (joint)
No deduction if MAGI is over $191,000

Contributions are not tax deductible.
Earnings are tax free if you have had an account for five years and one of the following applies:
• After age 59 1/2
• Death
• Disability
• First-time home purchase (up to $10,000)

 

IRS regulations require that you have earned income or that you file your tax return jointly with someone who has earned income in order to make contributions (deposits) to an IRA. There is no minimum age requirement.

Please see our rate sheet for current rates, call us at 734-662-8200 or 800-968-8628 for an IRA application packet, or stop by any of our branches for details.

Investments are available from 6 months to 60 months. Roth and Traditional IRAs (either $500 or $10,000 minimum to open). Loss of 90 days interest if funds are withdrawn before maturity.

University of Michigan Credit Union is required to withhold Michigan state income tax on certain IRA distributions. Distributions from IRAs are subject to Michigan state income tax withholding at a rate of 4.35 percent of the gross distribution amount. You may qualify for personal exemptions which would reduce the amount to be withheld. Additionally, you may elect not to have state income tax withheld from your distributions or make estimated tax payments. Please note that you may be subjected to penalties and/or interest if you elect to opt out of state withholding at the time of withdrawal. Please consult your tax advisor to determine your options.

To opt out of state withholding or to be eligible for a withholding rate other than 4.35 percent, you must fill out this form and provide it to the credit union. Click here for more information.

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All UMCU branches will be closed on Monday, Sept. 1st for Labor Day. Have a safe and happy holiday!
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734-662-8200 or 800-968-8628