President Bush has signed legislation that waives Required Minimum Distributions (RMDs) for 2009. This waiver means that Traditional IRA owners and Traditional and Roth IRA beneficiaries can still take any distributions they wish in 2009, but must resume RMD payments in 2010. (Note: IRA owners and beneficiaries can still take any distributions they wish during 2009.)

- Traditional IRA owners receiving established Post 70 1/2 RMD payments will not need to receive a distribution in 2009.

- Traditional IRA owners attaining age 70 1/2 in 2009 (those with birth dates from July 1, 1938 through June 30, 1939) will not need to receive their 70 1/2 year (2009) RMD.

- Traditional and Roth IRA beneficiaries will not have to receive death benefit RMDs for 2009.

INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Education Credit Union is your financial partner for life, so there's no better place to start planning for your retirement years. Choose a Traditional IRA or a Roth IRA. Each earns competitive interest rates, requires no additional set-up fee or a maintenance fee and provides all the tax advantages you need. Deposits may be tax deductible, and your investment grows with tax deferred interest. You can open an IRA with us for as little a $50.

If you already have an IRA somewhere else, you can transfer it to ECU and take advantage of our better rates. ECU IRA's accept rollovers and direct rollovers from Qualified Retirement Plans. Also, ECU accepts transfers and rollovers from other IRA's. Members can convert a Traditional IRA to a Roth IRA. Conversion means exchanging the tax deferral offered by a Traditional IRA for tax-free withdrawals offered by a Roth IRA. Taxes must be paid when converting a Traditional IRA to a Roth IRA.

ROTH IRA: Roth IRA's allow investors to annually contribute a limited amount of money towards retirement. The contributions are not tax deductible. Earnings are tax-free if account is open for five tax years and withdrawn for qualified reasons such as age 59½, disability, death, or first-time home purchase with a lifetime limit of $10,000. Also, Roth IRA account holders are not taxed when they begin withdrawing money at or even before retirement.

Contributions limits for 2005-2007 are $4,000 per year. For owners 50 and older, the contributions limits increase to 4,500 for 2005, and $5,000 for 2006 and 2007. Account cannot exceed contribution limits.

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• Contributions are not tax deductible
• No Mandatory Distribution
• All earnings and principal are 100% tax fee (if rules and regulations are followed)
• Available only to single-filers making up to $95,000 or married making a combined maximum of $150,000 annually)
• Principal contribution can be withdrawn any time without penalty (subject to some minimal conditions.)
• Funds may be used for a first-time home purchase (lifetime limit is $10,000 per person.)
• Contributions are allowed after age 70½

TRADITIONAL IRA:
The Traditional IRA is an account, which allows investors to make tax-deductible contributions. The earnings grow tax-free until the account's owner turns 59½ years old (if money is withdrawn before this age, a 10% penalty is incurred). At this time, the account holder is allowed to begin withdrawing money from the account to fund their retirement. This distributions are fully taxed by the U.S. government. Traditional IRA accounts must begin taking distributions no later than the April 1st following the year the owner turns 70½.

Contributions limits for 2005-2007 are $4,000 per year. For owners age 50 and older, the contribution limits increase to $4,500 for 2005, and $5,000 for 2006 and 2007. Accounts cannot exceed contribution limits.

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• Tax deductible contributions (depending on income level)
• Withdraws begin at age 59½ and are mandatory by 70½
• Taxes are paid on earnings when withdrawn from the IRA
• Available to anyone who has earned income
• All funds withdrawn (including principal contributions) before 59½ are subject to a 10% penalty (subject to certain exceptions)
• Qualified distributions are penalty-free for first-time home purchases with a lifetime limit of $10,000, higher-education expenses, disability, qualifying medical expenses exceeding 7.5% of adjusted gross income, payment to beneficiaries upon premiums while unemployed for 12 weeks or longer.