Community Shred Day
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  PRESIDENT'S MESSAGE

 

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in the convenience of your Home 

Purchasing a new home or looking to refinance your existing home? Check out our Rates and complete the Online Mortgage Loan Application.  Stop in or contact one of our loan officers to see what Fidelity Federal can do for you.

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31 Month Certifcate of Deposit Special

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                    Celebrating 130 years
 as Delaware's local Savings & Loan
               

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Individual Retirement Accounts

IRAs

  • Traditional, ROTH, SEP accounts available
  • Statement Savings Accounts
  • 182 day, 12 month, 18 month,  24 month, 36 month and 48 month terms available - Certificate Accounts
  • $250.00 minimum deposit to open a Certificate IRA account – Must maintain minimum balance to earn Annual Percentage Yield
  • $25.00 minimum deposit to open a Statement Savings Retirement Account
  • Early withdrawal penalty may apply for individuals under age 59½
  • No Commission or Maintenance fees

 

IRA Information Links
  
Note – You must reside within Delaware County or the contiguous counties (Franklin, Knox, Licking, Marion, Morrow and Union) to open an account with Fidelity Federal Savings & Loan
When you open an account with Fidelity Federal Savings & Loan, we will ask you for your name, address, date of birth, taxpayer identification number and other information that will allow us to identify you. We will also ask to see your driver’s license or other identifying documents. We will let you know if additional information is required.

IRA Information

Congress created Individual Retirement Arrangements (IRAs) in 1974 to encourage individuals to save money for their retirement. The Traditional IRA has gone thru several changes over the years but still offers retirement savings advantages for many individuals. The ROTH IRA became available in 1998. The ROTH IRA offers individuals additional options for their retirement savings programs including the potential for tax-free earnings.

Traditional IRA

Annual contributions to a Traditional IRA may be tax deductible depending on the Modified Adjusted Gross Income (MAGI) of the individual and whether or not they are covered by an employer’s retirement plan. Earnings that are paid on Traditional IRA accounts are tax-deferred until withdrawn. At the time that earnings are withdrawn, they are taxed at the ordinary tax rate of the individual. Individuals may contribute up to 100% of earned income or the maximum allowed, whichever is less (See IRA Contribution Limits). Regular IRA contributions are prohibited once an individual attains the age of 70½ years or older. An individual may begin withdrawing funds from their IRA at age 59½. A 10% additional tax generally applies if you withdraw or use IRA assets before you are age 59½. An IRA owner must begin withdrawing funds from their IRA at age 70½. Funds withdrawn are taxable to the IRA owner.

Traditional IRA Deductibility – Basic Rules

If you are single and not an active participant in an employer-sponsored retirement plan, or are married and neither you nor your spouse are active participants in an employer-sponsored retirement plan, you are eligible for a full deduction no matter how large your income.

If both you and your spouse are active participants, if you are single and an active participant, or if you are not an active participant but your spouse is, you may be eligible for either a full or partial deduction depending on your MAGI.

See IRS publication 590 or your tax or legal professional for assistance in determining IRA deductibility.

Roth IRA

A Roth IRA is an individual retirement account that allows only nondeductible contributions but features tax-free withdrawals for certain distribution reasons after a five-year holding period. The term “tax-free” means free from federal income taxes.

Roth Contribution Eligibility

There are two requirements for eligibility to contribute to a Roth IRA: you must have compensation (or your spouse must have compensation) and your modified adjusted gross income (MAGI) cannot exceed predefined limits. (see IRS Publication 590 or consult with your tax or legal professional for current limits).

Roth IRA Distributions

A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

  1. It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and
  2. The payment or distribution is:
    • Made on or after the date you reach age 59½,
    • Made because you are disabled,
    • Made to a beneficiary or to your estate after your death, or
    • One that meets the requirements listed under First Time Home Purchase (up to a $10,000 lifetime limit).

IRA Contribution Limits

Traditional IRA contribution limits: Individuals may contribute up to 100% of earned income or the maximum allowed, whichever is less.(see chart below) Regular IRA contributions are prohibited once an individual attains the age of 70.5 years or older. No regular contribution can be made during the year that an individual will attain the age of 70½.

Roth Contributions Limits: Individuals may contribute up to 100% of earned income or the maximum allowed, whichever is less.(see chart below) Regular contributions can be made past the 70½ year if income guidelines are met.

Catchup Contributions Limits: Individuals age 50 and over may contribute a “catch-up” contribution in addition to the standard contribution limit, if income guidelines are met.
The contribution limit is an aggregate limit per year for Traditional and Roth IRAs.

Contribution Table
Tax YearStandard LimitCatch-Up AmountTotal for Age 50 & Over
2013 $5,500 $1,000 $6,500
2014 $5,500 $1,000 $6,500
2015 $5,500 $1,000 $6,500
2016 $5,500 $1,000  $6,500 
2017 $5,500 $1,000 $6,500

Required Minimum Distributions (RMDs)

Once an individual reaches the year in which they turn age 70½, they are no longer eligible to contribute to a Traditional IRA and must begin taking distributions. The formula for calculating a RMD is:

Adjusted IRA Balance divided by Distribution Period = RMD

Most IRA owners will use the Uniform Distribution Period Table to calculate their RMD. One exception to this rule is: An IRA owner, who has named his/her spouse as the sole beneficiary, for the entire year and the spouse is more than ten years younger than the IRA owner. In this instance the Joint Life Expectancy Table will be used.

Uniform Distribution Table
AgeDistribution PeriodAgeDistribution Period
70 27.4 78 20.3
71 26.5 79 19.5
72 25.6 80 18.7
73 24.7 81 17.9
74 23.8 82 17.1
75 22.9 83 16.3
76 22 84 15.5
77 21.2 85 14.8

Simplified Employee Pension Plans – SEPs

A SEP is a business retirement plan established and administered by an employer. Each year, the employer can contribute a certain percentage of each eligible employee’s compensation directly to the employee’s Traditional IRA. Contributions are discretionary each year and may range from 0 to 25% of compensation. The contribution percentage must be the same for the employer and all eligible employees. Funds are deposited into Traditional IRA Accounts and are subject to the standard IRA rules and regulations. The contributions plus earnings are taxable to the IRA account owner upon withdrawal and may be subject to a 10% penalty if withdrawn prior to reaching age 59½.

For additional information regarding SEP IRAs please consult your tax advisor, legal counsel and/or your financial advisor.

Definitions

Modified Adjusted Gross Income (MAGI) - is a tax term that refers to the amount used to calculate your annual income tax liability. It is also used to determine whether or not you are allowed certain tax benefits.

Transfer - A transfer is a movement of cash or investments between like IRAs from one custodian to another. The account owner does not take constructive receipt of the funds. The Transaction is not reported to the IRS.

Rollover - A rollover occurs when funds are paid directly to the IRA owner as a distribution and the IRA owner deposits the funds into another IRA within 60 calendar days of receipt. The distribution will be reported on Form 1099-R by the issuing institution. The receiving custodian will report the rollover on Form 5498. Funds may only be rolled between IRAs once in a twelve month period.

Direct Rollover - A direct rollover occurs when cash or investments are sent directly from a Qualified Plan to an IRA. The qualified plan will report the distribution on Form 1099-R and the IRA custodian will report the direct rollover on Form 5498.

Conversion - A conversion occurs when funds are moved from a Traditional IRA to a Roth IRA. The conversion amount becomes taxable income to the account owner in the year the conversion takes place. A Form 1099-R for the distribution and a Form 5498 for the contribution are issued. Once funds are converted to the Roth IRA, any earnings may be tax-free upon withdrawal.

 

Please consult IRA Publication 590, your tax advisor, legal counsel and/or your financial advisor for IRA information.

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