16 Friday, June 13, 1975
THE DETROIT JEWISH NEWS
First Federal showed Charlie Smith
how the new retirement law lets
him lower his taxes now and have
$169,000 when he 591/2.
What we explained to Charlie, and
would like to explain to you, is that a
Federal law passed last year now
allows you to set up your own
retirement fund at First Federal
Savings of Detroit as long as you're
not already a participant in a qualified
employer-sponsored plan.
Under this new law, you can save
up to $1,500 or 15 per cent (whichever
is less) of your compensation and not
pay income taxes on it at the time.
Nor is the interest earned in the
Individual Retirement Account taxed
while you're building the fund.
Now, in Charlie's case, the Individual
Retirement Account would start at
age 29. Withdrawals can begin at
age 59 1 /2. So Charlie is going to have
30 years in which to shelter part of
his income from taxes. When he
Come in now and open
your own Individual
Retirement Account.
begins using the money, Charlie is
likely to be in a lower tax bracket and
HOW YOUR INDIVIDUAL
RETIREMENT ACCOUNT CROWS
If you contributed $1,500
each year, you would have*
20 YEARS
Per Year
IRA
Interest
Account
Rate
51/4
%
6 1/2
30 YEARS
Taxable
IRA
Savings
Account Account
Taxable
Savings
Account
$51,474
$33,544
$105,860
$63,227
% t
59,258
37,180
133,312
74,680
6 3/4% t
60,959
37,955
139,668
77,229
71/2 cyo t
66,477
40,429
161,145
85,608
7 3/4
68,491
41,317
169,303
88,706
%
The figures in the above chart assume that the total
contribution of S1,500 is contributed on the final
business day of each year, and that the taxpayer is in
the 25% tax bracket. The figures represent the
difference in accumulated savings between a tax-
deferred IRA account and a taxable savings account.
Amounts in the IRA tax-deferred column indicate the
sums of the annual contributions plus the interest
accumulated by those contributions. The taxable
savings column shows an after-tax total of the annual
contributions. plus the after-tax interest accumulated
on those contributions. Interest rates shown are those
currently paid on regular and certificate savings
accounts offered by the Association. Interest is
compounded quarterly.
1 - Federal regulations require a substantial interest
penalty for early withdrawal from certificate savings
accounts.
he may also be able to take advan-
tage of income averaging procedures.
If Mrs. Smith were employed, she,
too, could have her own Individual
Retirement Account, and together
they could build a fund of more than
a third of a million dollars.
Fully approved by the Internal
Revenue Service, First Federal's
Individual Retirement Account (under
the Employee Retirement Income
Security Act of 1974) has a number of
other very helpful provisions.
For example, your employer or union
might elect to make contributions
to your Individual Retirement
Account as a benefit to you.
There's also a plan that helps you
in case you leave a job where you are
participating in a pension fund. That
entire amount can be transferred to
an Individual Retirement Account,
tax deferred.
isr
FEDERAL
Now, of course, there are other
requirements and limitations that you
should know about. But, frankly,
they'll be much easier to explain in
person. What we want you to know
right now is that you can do this
right now—you can reduce your
taxes on present income and you can
build a substantial retirement fund
on your own.
And at First Federal, we have all the
information necessary, including the
Internal Revenue Service forms
which must be completed. And, to
make the plan work as hard as
possible for you, we have savings
accounts that pay you the highest
interest rates allowed by law.
So come to any First Federal office
and ask about an Individual Retire-
ment Account. Or call 965-1400, Ext.
541. Remember, the only require-
ments are that you're earning an
income, that you're not a participant
in any other pension program, and
that you have not reached age 70 1/2.
And that, like the Smiths, you're
taking a good look at a good future.
We're First.
Put yourself in our place.
First Federal Savings of Detroit
\Lim Oth,c 1001 Wood w‘ird A\
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THERE ARE 30 CONVENIENT NEIGHBORHOOD
LOCATIONS TO SERVE YOU OR PHONE 965-1400