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Black Hills Federal Credit Union offers you several alternatives for saving for your retirement. Select one of the following to learn more about your retirement options:
Black Hills Federal Credit Union has several options available to help you with your financial goals. Visit or call one of our full-service offices. Or, call Matt Dahl or Mike Paikos at our Black Hills Financial Services. They will be glad to answer your questions and get you started on the road to potentially higher earnings on your money.
Our competitive rates will make the most of your savings dollars!
- Terms available from 90-day Money Market Certificates to 8-year Certificates.
- Minimum deposit required on certificates is $500 with the exception of VIBZ and Loony Tunes certificates that require a minimum deposit of $100.
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We pay higher rates on balances of $25,000 or greater.
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Dividends are compounded daily and paid monthly on all certificate accounts.
Bump-A-RateTraditional IRA
The Traditional IRA offers an opportunity to save for retirement while deferring taxes on the earnings. Black Hills Federal Credit Union offers several options for your IRA investment. You may choose to put money in an IRA Share Account, IRA Certificate, or in our Market Index Certificate. Contributions on Traditional IRAs are limited to $3,000 per year through 2004 for individuals age 50 and younger. Age 50+ are limited to $3,500 per year through 2004. Contribution limits will increase periodically through 2009.
Choose from either a Non-deductible or a Deductible IRA. Taxes on contributions and earnings from a Deductible IRA are deferred until the money is withdrawn from the IRA. With the Non-deductible IRA, taxes are paid on the contribution in the year in which the contribution is made while the earnings grow tax-deferred.
Who can contribute? Anyone up to age 70 1/2, who has income from compensation (or who is filing jointly with a spouse who earns compensation) if they are one of the following: - With a Bump-A-Rate feature, you have the option to exercise a one-time rate change during the term of the certificate.
- One-time opportunity to take advantage of rising rates
- Bump-A-Rate is available on IRA Certificates of 12- or 30- months
- The maturity date does not change when the Bump-A-Rate Option is exercised
- Risk-free option which allows you to increase your rate while locking into a fixed term.
- All certificates with a Bump-A-Rate option are nonrenewable
- Not active participants* in a retirement plan
- Active participants and single filers that have modified adjusted gross income (MAGI) of less than $45,000 for 2004
- Active participants and joint filers that have MAGI of less than $65,000 for 2004
Reduced contributions allowed for higher incomes:
- Active participants and single filers that have MAGI between $45,000 and $55,000 for 2004
- Active participants and joint filers that have MAGI between $65,000 and $75,000 for 2004
BHFCU offers several options for your Roth IRA investment. You can put your money in a Roth IRA Share Account, Roth IRA Certificate, or our Market Index Certificate. The Roth IRA offers you the opportunity to build a Tax-Free retirement fund.
- Contributions from earned income are made with after tax dollars
- Earnings accumulate Tax-Free (for federal income tax purposes)
- Minimum distributions are not required
- Must be held for 5 years before making qualified distributions without IRS or tax penalties
- No age limit on contributions
- Earned income is a requirement for making contributions
- Qualified* distributions are Tax-Free
- Contributions are limited to $3,000 per year through 2004, for up to age 50
- Contributions are limited to $3,500 per year through 2004, for age 50 and older
Who can contribute? Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following modified adjusted gross income (MAGI):
- Single filers up to $95,000
- Joint filers up to $150,000
Reduced contributions allowed for higher incomes:
- Single filers that have MAGI between $95,000 - $110,000
- Joint filers that have MAGI between $150,000 - $160,000
The Roth Conversion IRA is an IRA established to accept rollovers, transfers, or conversions from a Traditional IRA. Conversion means exchanging the tax deferral offered by a traditional IRA for tax-free withdrawals offered by the Roth IRA.
We suggest you consult a financial planner or a tax advisor to determine whether or not it is financially beneficial and/or feasible for you to move your retirement money from a Traditional IRA to a Roth IRA. The taxable amount you convert to a Roth IRA from your Traditional IRA will be subject to federal income taxes for the year of the conversion. Some restrictions may apply.
Who can convert? You can convert an existing Traditional IRA into a Roth IRA if, for the year of the conversion, your Adjusted Gross Income (AGI) is $100,000 or less before the conversion. This limit applies to married and single taxpayers, and the limit is not indexed to cost-of-living increases. Married taxpayers are eligible to convert a Traditional IRA to a Roth IRA only if they file a joint income tax return; if you are married but file separately, you are not eligible to convert.
You cannot convert an account in an employer-sponsored retirement plan directly into a Roth IRA. You can, however, roll the account over to a Traditional IRA and then convert the IRA to a Roth IRA.
The Education IRA is designed to encourage people to save for future educational expenses. It allows you to accumulate education funds for a designated beneficiary that can be withdrawn Tax-Free when used for qualified higher education expenses before the beneficiary reaches age 30. Contributions are not tax deductible, but earnings grow Tax-Free. The Education IRA becomes the property of the beneficiary when they reach the age of majority (18). This means you may not specify whether, or how, the assets are to be used by the beneficiary. See your financial advisor for more information.
- Tax-Free withdrawals
- Dividends compound monthly or daily depending on investment
- Qualified* distributions are Tax-Free
- Up to $2,000 each may be contributed annually for multiple beneficiaries under the age of 18
- Contributions may be eligible for the $11,000 gift tax exclusion
- Contributions are not considered part of your annual IRA contribution limit
Who can contribute?
- Single filers with MAGI up to $95,000
- Joint filers with MAGI up to $190,000
Reduced contributions allowed for higher incomes:
- Single filers with MAGI between $95,000 - $110,000
- Joint filers with MAGI between $190,000 - $220,000
The contribution limit is per beneficiary, not per contributor. You can contribute up to the full $2,000 annually into an Education IRA for anyone under the age of 18, or children with special needs (see your legal or tax advisor for more information).
Additional Information
See our detailed Account Agreement for General Terms and Conditions, Funds Availability Policy, Electronic Funds Transfer information, Automated Teller Machine Disclosure, and Funds Transfer Agreement and Notice.
See our detailed Truth-In-Savings Disclosure for full and fair disclosure on all savings and certificate account types as required by federal law effective January 1, 1995. Please feel free to contact a Credit Union employee for further details and account information regarding rates and the Schedule of Fees.
The information contained herein is not intended as investment advice. Always consult your tax advisor and/or financial planner to determine which option is right for you.
*Some restrictions may apply.
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