Fillable INDIVIDUAL RETIREMENT ARRANGEMENT (IRA)

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INDIVIDUAL RETIREMENT ARRANGEMENT (IRA)

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Page 1
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
INDIVIDUAL RETIREMENT ARRANGEMENT (IRA)
It’s never too early or too late to save for your retirement. To live comfortably in your retirement years takes
planning, and with a Pentagon Federal Credit Union (PenFed) Individual Retirement Arrangement (IRA), you
are investing wisely and securely for your future.
You can also open a PenFed IRA Share account with as little as $25. And you can contribute any time you
wish, up to your yearly IRA limit. You can use automatic transfer service to add to your IRA.
You can choose an IRA Certificate. Take advantage of higher yields, federal insurance, automatic renewal,
and convenient dividend and maturity payment options by investing in an IRA Certificate today. Unlike other
financial institutions, members can take partial qualified distributions from their Certificates without an early
withdrawal penalty. Our IRA Certificates oer competitive rates and are compounded daily for even higher
yields. You need only $1,000 to purchase a 1-, 2-, 3-, 4-, 5-, or 7-year IRA Certificate.
Or if you prefer not to lock-in your IRA investment for a specific term, you can open a high-yield IRA Premier
Account - oering Money Market-like rates and liquidity for a minimum transfer or rollover of at least $10,000.
FOR NEW ACCOUNTS ONLY - CURRENT AS OF JANUARY 2020
CONTENTS IN THIS BOOKLET
Page
General Information and Instructions .................................................... 2
Contribution & Distribution Limits for 2020 ....................................... 3
IRA Account Application Form ................................................................ 5
IRA Account Application Form - Inherited IRA ................................. 7
IRA Transfer Authorization Form ............................................................ 9
IRS Form 5305-A - Traditional IRA ......................................................... 11
IRS Form 5305-RA - Roth IRA ................................................................. 13
Disclosures ....................................................................................................... 15
Page 2
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Simply follow the steps below:
1. You must be a PenFed member to open an IRA. (Joint ownership does not constitute membership.) To
establish membership, each person opening an IRA must complete a Membership Application and return it
with a Regular Share (savings) account share purchase of $5.00 or more. You may open the account online
at PenFed.org.
2. Complete and sign the Individual Retirement Arrangement Application form located on page 5 of this booklet.
* Remember to choose an IRA investment option or combination of options.
* If future funding will be by automatic transfer, you can submit form 734 - Individual Retirement
Arrangement (IRA)/Education Savings Account (ESA) Contribution Voucher. This form is available online
at www.penfed.org/forms.
3. If you would like to transfer a preexisting IRA to PenFed, complete and return the IRA Transfer Authorization
form on page 9. If you are 70½ or older, please note the special instructions on the form for traditional IRAs.
4. Read and retain for your records the Individual Retirement Custodial Account Form (#5305-A on page 11 for
a traditional IRA or #5305-RA on page 13 for a Roth IRA). These forms are the required IRS forms and have
not been updated for the recent tax law changes.
5. Read and retain for your records the applicable Disclosure Statement.
6. If your spouse wants an IRA, each of you must submit an IRA Application. Both must establish membership
with PenFed.
7. Please return the IRA Application, Membership Application (if necessary), initial contribution(s) and share
purchase(s), and transfer forms. Your IRA must be established prior to PenFed’s acceptance of contributions
or transferred funds to your IRA.
If you need another set of documents to establish an IRA for your spouse, please contact us at 1-800-247-5626, or
download a form from PenFed.org/forms.
HOW DO YOU GO ABOUT ESTABLISHING YOUR ACCOUNT?
MAKING YOUR IRA CONTRIBUTION FAQ
Who can make a tax-deductible contribution to a traditional IRA?
This depends upon your adjusted gross income, your marital status, and whether you or your spouse are active
participants in an employer-sponsored pension plan. If you have earned income and have not reached age 70½,
you will continue to be allowed to make IRA contributions. However, for a Roth IRA you may make contributions
after age 70½ provided you have earned income. There may be limits on the amount of your contribution that is
tax-deductible. All earnings on your IRA will remain tax-deferred, regardless of whether the contribution was tax-
deductible.
What if I’m not eligible to make a tax-deductible contribution to a traditional IRA?
As long as you are eligible for a traditional IRA (you have earned income and have not reached age 70½), you can
make nondeductible IRA contributions of up to $6,000 annually, or 100% of earned income, whichever is less. The
dividends earned will accumulate on a tax-deferred basis until you withdraw your money. You can also choose to
contribute to the Roth IRA instead of making nondeductible contributions to a traditional IRA, but consult your
tax advisor first.
Who can have a traditional IRA?
Generally, anyone who has earned income and does not turn age 70½ during the year can contribute to an IRA.
There are limits on the amount you may deduct from taxable income and on who may deduct IRA contributions.
What are the benefits of making nondeductible contributions to a traditional IRA?
You will continue to earn tax-deferred dividends on any nondeductible IRA contributions you make, helping your
IRA grow faster than taxable savings accounts. By not being entitled to an IRA tax deduction, you pay all income
tax now on the amount contributed. Later, when you withdraw your funds from your IRA, the amount representing
your nondeductible contribution will not be taxed.
Are my IRAs federally insured?
Yes. Your PenFed IRAs are insured separately from your other PenFed share (savings) and checking accounts up
to $250,000 by the National Credit Union Administration (NCUA), an agency of the U.S. government. Talk to a
Member Service Representative for details, or download a copy of the NCUA brochure, “Your Insured Funds,” from
their website.
Where can I go for more information?
Go to the IRA website at IRS.gov/publications and see Publication 590A, Individual Retirement Arrangements. For
specific tax information, please consult with your accountant or tax advisor.
Page 3
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
2020 COMBINED TRADITIONAL AND ROTH IRA CONTRIBUTION LIMITS
If you are under 50 years of age at the end of 2020:
The maximum contribution you can make to a
traditional or Roth IRA is the smaller of $6,000
or the amount of your taxable compensation for
2020. This limit can be split between a traditional
and a Roth IRA but the combined limit is $6,000.
The maximum contribution to a Roth IRA and the
maximum deductible contribution to a traditional
IRA may be reduced depending on your modified
adjusted gross income (modified AGI).
If you are 50 years of age or older before the end of 2020:
The maximum contribution that can be made to a traditional
or Roth IRA is the smaller of $7,000 or the amount of your
taxable compensation for 2020. This limit can be split
between a traditional and a Roth IRA but the combined
limit is $7,000. The maximum contribution to a Roth IRA
and the maximum deductible contribution to a traditional
IRA may be reduced depending on your modified AGI.
2020 LIMITS
2020 TRADITIONAL IRA DEDUCTION LIMITS:
If you are covered by a retirement plan at work
If your
Filing Status is ...
and your Modified AGI is ...
then you can take ...
Single or
Head of Household
≤ $65,000 a full deduction (up to the amount of your contribution limit)
> $65,000 but < $75,000
a partial deduction
≥
$75,000 no deduction
Married Filing Jointly or
Qualifying Widow(er)
≤ $104,000 a full deduction (up to the amount of your contribution limit)
> $104,000 but < $124,000 a partial deduction
≥
$124,000 no deduction
Married Filing Separately*
< $10,000 a partial deduction
≥
$10,000 no deduction
*If you file separately & did not live with your spouse at any time during the year, your IRA deduction is determined under the “single” filing status.
If you are NOT covered by a retirement plan at work
If your Filing Status is ...
and your Modified AGI is ...
then you can take ...
Single, Head of Household
or Qualifying Widow(er)
any amount a full deduction (up to the amount of your contribution limit)
Married Filing Jointly or
Separately with a spouse
who is not covered by a plan
at work
any amount a full deduction (up to the amount of your contribution limit)
Married Filing Jointly
with a spouse who is
covered by a plan at work
≤ $196,000 a full deduction (up to the amount of your contribution limit)
> $196,000 but < $206,000
a partial deduction
≥
$206,000 no deduction
Married Filing Separately
with a spouse who is
covered by a plan at work*
< $10,000 a partial deduction
≥
$10,000 no deduction
*If you file separately & did not live with your spouse at any time during the year, your IRA deduction is determined under the “single” filing status.
Page 4M-36 (01/20) © Pentagon Federal Credit Union, 2020;
2020 ROTH IRA CONTRIBUTION LIMITS
If you have Taxable Compensation &
your Filing Status is ... and your Modified AGI is ... then you can contribute ...
Single
or
Head of Household
or
Married Filing Separately
and you
did not live with your spouse at any
time during the year
< $124,000 up to the limit
≥ $124,000 but < $139,000
a reduced amount
≥ $139,000 nothing (you cannot contribute to a Roth IRA)
Married Filing Jointly or
Qualifying Widow(er)
< $196,000 up to the limit
≥ $196,000 but < $206,000 a reduced amount
≥ $206,000 nothing (you cannot contribute to a Roth IRA)
Married Filing Separately
and you did live with your spouse
at any time during the year
< $10,000 a reduced amount
≥ $10,000 nothing (you cannot contribute to a Roth IRA)
Page 5
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Please check the box for the type of IRA you are eligible for:
 Traditional   Simplified Employee Pension (SEP)   Roth
Dollar Amount Tax Year Account Number
Contribution by Cash/Check
($25 Minimum)
$
Contribution by
Transfer from PenFed Account
($25 Minimum)
$
Rollover Amount from Another IRA or Retirement Plan
$
Transfer from Another Financial Institution*
$
* Please complete the IRA Transfer Authorization form to transfer your IRA to PenFed.
(Refer to Disclosure Statement for important information.)
INDIVIDUAL RETIREMENT ARRANGEMENT
(IRA) APPLICATION
Member Name (First, MI, Last): 
_______________________________________________________________________________________________________________
________________
_____
Date of Birth (MM/DD/YYYY): 
___________________________________________________
 Full SSN: 
___________________________________________________
_________
____
Mailing Address: 
______________________________________________________________________________________________________________________________________
________
_______
Physical Address (If dierent than mailing): 
______________________________________________________________________________________________
__________________
____
Email: 
_____________________________________________________________________________________________________________________________________________
_________
_______________
Day Phone: 
___________________________________
 Evening Phone: 
____________________________________
 Cell Phone: 
____________________________________
Employer: 
____________________________________________________________________________________________________________________________________________
________________
_
_
Spouse’s Name: 
___________________________________________________________________________________________________________________________________________
_________
__
Date of Birth (MM/DD/YYYY): 
___________________________________________________
 Full SSN: 
_____________________________________________
________________
___
IRA Share Account
(Necessary for All IRAs)
$
_________________________________
IRA Premium Account ($10,000 Minimum)
(Rollover/Transfer Only)
$
_________________________________
IRA Certificate
 
($1,000 Minimum)
For each certificate, select the maturity option:
1 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
2 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
3 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
4 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
5 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
7 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
†
Combine dividends and principal, then renew the certificate upon maturity.
††
Close certificate & deposit in my IRA Share account upon maturity.
Form 795-A (01/20) © Pentagon Federal Credit Union, 2020
1. MEMBER INFORMATION (Please complete all fields even if already on file)
2. TOTAL OPENING CONTRIBUTION
If the incorrect box is checked, you may
be subject to adverse tax consequences.
3. INVESTMENT OPTIONS 
(You may have more than one IRA certificate term and more than one maturity option)
Subsequent contributions to your IRA account made by automatic transfer (allotments, net pay or other recurring
payments) are treated as current-year contributions.
Page 6
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Upon the death of the member/owner of the IRA account, the primary beneficiary named above will receive the funds. If there is more
than one primary beneficiary, the primary beneficiaries will receive the balance in the account in the percentages indicated. If the
percentages are not indicated, the named primary beneficiaries shall share the balance in the account equally. If a primary beneficiary
predeceases the member/owner, the balance in the account is to be shared by the remaining primary beneficiaries, in equal shares. If all
of the primary beneficiaries predecease the member/owner, the balance in the account shall be shared by the contingent beneficiaries in
the percentages indicated. If the percentages are not indicated or if the contingent beneficiaries are deceased, the remaining contingent
beneficiaries shall share the balance in the account equally. Beneficiary(ies) provided on this form will be applied toward the IRA Share
Account and all associated current and future certificates. If you are not currently a Pentagon Federal Credit Union (PenFed) member,
you must open a Regular Share Account with a share purchase of at least $5. Status as a joint owner of another account at PenFed does
not constitute membership. Please complete a membership application and return it to us along with your deposit to regular shares, this
form and your initial IRA contribution. I hereby request an IRA at PenFed under the terms and conditions outlined herein and I reserve
the right to change my beneficiary(ies) solely by filing another designation of beneficiary form with PenFed. I hereby acknowledge I
have received, read and agree to abide by the terms of form 5305-A Individual Retirement Custodial Account Agreement and Disclosure
Statement. If I am establishing my account with a rollover contribution, I understand this is an irrevocable election.
Member Signature
x
Date
Spouse’s Signature
x
Date
4. BENEFICIARY DESIGNATION
Primary Beneficiary Name (First, MI, Last): 
____________________________________________________________________________________________
____________
__________
Date of Birth (MM/DD/YYYY): 
____________________________________
 Full SSN: 
_____________________________________
 Percent Allotted: 
_________
%
Mailing Address: 
______________________________________________________________________________________________________________________________________
____
___________
Contingent Beneficiary (if any) Name (First, MI, Last): 
______________________________________________________________________________________
_______
______
Date of Birth (MM/DD/YYYY): 
____________________________________
 Full SSN: 
_____________________________________
 Percent Allotted: 
_________
%
Mailing Address: 
_____________________________________________________________________________________________________________________________________________________
5. AGREEMENT
Form 795-A (01/20) © Pentagon Federal Credit Union, 2020
Page 7
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 795-B (01/20) © Pentagon Federal Credit Union, 2020
INHERITED INDIVIDUAL RETIREMENT
ARRANGEMENT (IRA) APPLICATION
1. MEMBER INFORMATION (Please complete all fields even if already on file.)
Decedent’s Name: 
_______________________________________________________________________________
 Full SSN: 
____________________________________________
___
__
Decedent’s Date of Birth (MM/DD/YYYY): 
_________________________
 Decedent’s Date of Death (MM/DD/YYYY): 
_______________
______
____
Fair Market Value of the account as of December 31st of the year of death: $
_____________________________________________
_________
____
Where are the funds being transferred from? (select one):
Transfer from the Decedent’s PenFed IRA:
Account Number: 
______________________________
______
Amount: $
_____________________________________________
___
Whose age would you like the new Inherited
Distributions to be based on?
 the Decedent’s Age    Your Age
Have Inherited Distributions started?   Yes    No
If Yes: When did they start? (MM/DD/YYYY): 
_______________________________
__
____
Were they based on   the Decedent’s Age or   Your Age?
If No:
Would you like the new Inherited Distributions to be based on   the Decedent’s Age or   Your Age?
Requested Distribution Frequency:   Monthly    Quarterly    Yearly
Requested Starting Date (MM/DD/YYYY): 
__________________________
___
___
Payment Disbursement:   Send me a Check   Deposit into my PenFed Account No: 
___________________
_______
_
You have the option of having federal income tax withheld from the IRA withdrawal. If you do not make a withholding
election, as required by regulation, PenFed will withhold the standard 10% for tax withholding. PenFed recommends
that you consult your tax or legal advisor prior to selecting this option.
Do you want federal income tax withheld from this IRA withdrawal? 
 Yes (choose one option on next page)   No
2. INHERITED IRA INFORMATION
Transfer from Decedent’s IRA at Another Financial Institution:
Institution Name: 
___________________________________________________________________
Account Number: 
__________________________________________________________________
Amount: $
______________________________________________________________________________
Please complete the IRA Transfer Authorization form to transfer
your IRA to PenFed.
(Refer to Disclosure Statement for important information)
Please check the box for the type of IRA you are eligible for:
 Traditional   Simplified Employee Pension (SEP)   Roth
If the incorrect box is checked, you may
be subject to adverse tax consequences.
Member Name (First, MI, Last): 
_______________________________________________________________________________________________________________
________________
_____
Date of Birth (MM/DD/YYYY): 
___________________________________________________
 Full SSN: 
___________________________________________________
_________
____
Mailing Address: 
______________________________________________________________________________________________________________________________________
________
_______
Physical Address (If dierent than mailing): 
______________________________________________________________________________________________
__________________
____
Email: 
_____________________________________________________________________________________________________________________________________________
_________
_______________
Day Phone: 
___________________________________
 Evening Phone: 
____________________________________
 Cell Phone: 
____________________________________
Employer: 
____________________________________________________________________________________________________________________________________________
________________
_
_
Spouse’s Name: 
___________________________________________________________________________________________________________________________________________
_________
__
Date of Birth (MM/DD/YYYY): 
___________________________________________________
 Full SSN: 
_____________________________________________
________________
___
Page 8
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 795-B (01/20) © Pentagon Federal Credit Union, 2020
If yes,  I would you like the Standard Rate of 10% or
 I hereby direct PenFed to withhold
_________
% or specifically $
_____________________________
from my withdrawal(s)
3. INVESTMENT OPTIONS 
(You may have more than one IRA certificate term and more than one maturity option)
Upon the death of the member/owner of the IRA account, the primary beneficiary named above will receive the funds. If there is more
than one primary beneficiary, the primary beneficiaries will receive the balance in the account in the percentages indicated. If the
percentages are not indicated, the named primary beneficiaries shall share the balance in the account equally. If a primary beneficiary
predeceases the member/owner, the balance in the account is to be shared by the remaining primary beneficiaries, in equal shares. If all
of the primary beneficiaries predecease the member/owner, the balance in the account shall be shared by the contingent beneficiaries in
the percentages indicated. If the percentages are not indicated or if the contingent beneficiaries are deceased, the remaining contingent
beneficiaries shall share the balance in the account equally. Beneficiary(ies) provided on this form will be applied toward the IRA Share
Account and all associated current and future certificates. If you are not currently a Pentagon Federal Credit Union (PenFed) member,
you must open a Regular Share Account with a share purchase of at least $5. Status as a joint owner of another account at PenFed does
not constitute membership. Please complete a membership application and return it to us along with your deposit to regular shares, this
form and your initial IRA contribution. I hereby request an IRA at PenFed under the terms and conditions outlined herein and I reserve
the right to change my beneficiary(ies) solely by filing another designation of beneficiary form with PenFed. I hereby acknowledge I
have received, read and agree to abide by the terms of form 5305-A Individual Retirement Custodial Account Agreement and Disclosure
Statement. If I am establishing my account with a rollover contribution, I understand this is an irrevocable election.
Member Signature
x
Date
Spouse’s Signature
x
Date
4. BENEFICIARY DESIGNATION
5. AGREEMENT
Primary Beneficiary Name (First, MI, Last): 
____________________________________________________________________________________________
____________
__________
Date of Birth (MM/DD/YYYY): 
____________________________________
 Full SSN: 
_____________________________________
 Percent Allotted: 
_________
%
Mailing Address: 
______________________________________________________________________________________________________________________________________
____
___________
Contingent Beneficiary (if any) Name (First, MI, Last): 
______________________________________________________________________________________
_______
______
Date of Birth (MM/DD/YYYY): 
____________________________________
 Full SSN: 
_____________________________________
 Percent Allotted: 
_________
%
Mailing Address: 
_____________________________________________________________________________________________________________________________________________________
IRA Share Account
(Necessary for All IRAs)
$
_________________________________
IRA Premium Account ($10,000 Minimum)
(Rollover/Transfer Only)
$
_________________________________
IRA Certificate
 
($1,000 Minimum)
For each certificate, select the maturity option:
1 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certifica
te ††
2 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
3 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
4 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
5 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
7 Year Certificate
$
_________________________________
 Renew Certificate † 
 
Close Certificate ††
†
Combine dividends and principal, then renew the certificate upon maturity.
††
Close certificate & deposit in my IRA Share account upon maturity.
Page 9M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form L-594 (01/20) © Pentagon Federal Credit Union, 2020
________________________________________________________________________________
Depositor’s Signature
__________________________________________________________________________________________
Depositor’s Printed Name
Individual Retirement Arrangement (IRA)
ATTENTION IRA ADMINISTRATOR: 
Please accept this letter as your authorization to transfer: (check one alternative below)
 The balance of my IRA including accrued interest on
________________________________________________
less applicable penalties
or fees to Pentagon Federal Credit Union (PenFed).
 The sum of $
__________________________________________________________
from my IRA to Pentagon Federal Credit Union (PenFed).
Please make the check payable to: Pentagon Federal Credit Union as custodian for the IRA of:
______________________________________________________________________________________
whose account number is
_______________________________________________
.
The type of IRA I have is: Traditional   SEP   Roth
  Inherited Traditional    Inherited SEP   Inherited Roth
If you inherited the IRA, please include the following:
Decedent’s Name:
 
_________________________________________________________________________________________________________
Date of Death:
______________________________________
 
Decedent’s SSN:
___________________________________________
Mail the check (if applicable) and a copy of this letter to: PenFed Credit Union - Attention: IRA Department
PO Box 247009, Omaha, NE 68124-7009
SECTION 4.
PenFed Use Only
This is to certify PenFed has accepted the appointment as Successor Custodian of the IRA named above.
PenFed Authorized Signature: 
___________________________________________________________________
 Date: 
____________________________
TRANSFER AUTHORIZATION
Sections 1, 2 & 3 to be completed/signed by the PenFed Member. Section 4 to be completed by PenFed.
Member Name: 
_______________________________________________________________________________________________________________________________________________________
PenFed Member Number: 
_______________________________________________
 SSN: 
____________________________________________________________________________
Name of Transferring Institution: 
_____________________________________________________________________________________________________________________________
Address of Transferring Institution: 
_________________________________________________________________________________________________________________________
Transferring Institution IRA Account No: 
_________________________________________________________________________________________________________________
Date: 
__________________________________________
1. MEMBER DETAILS
2.
INSTRUCTIONS TO TRANSFERRING INSTITUTION
3.
DESIGNATION OF FUNDS Upon receipt, deposit funds into: (check appropriate box(es))
insert date transfer is to be made
IRA Share Account
($25 minimum)
IRA Premier Account
($10,000 minimum)
Rollover/Transfer Only
IRA Certificate Term
($1,000 minimum)
1 - Year 2 - Year 3 - Year 4 - Year 5 - Year 7 - Year
Page 10
M-36 (01/20) © Pentagon Federal Credit Union, 2020;
This Page Intentionally Left Blank
Form 5305-A
(Rev. April 2017)
Department of the Treasury
Internal Revenue Service
Traditional Individual Retirement Custodial Account
(Under section 408(a) of the Internal Revenue Code)
Do not file
with the Internal
Revenue Service
Name of depositor Date of birth of depositor
Address of depositor
Check if amendment . . .
▶
Name of custodian Address or principal place of business of custodian
The depositor named above is establishing a traditional individual retirement account under section 408(a) to provide for his or her retirement and
for the support of his or her beneficiaries after death.
The custodian named above has given the depositor the disclosure statement required by Regulations section 1.408-6.
The depositor has assigned the custodial account
dollars ($ ) in cash.
The depositor and the custodian make the following agreement.
Article I
Except in the case of a rollover contribution described in section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), an employer contribution to a
simplified employee pension plan as described in section 408(k), or a recharacterized contribution described in section 408A(d)(6), the custodian will
accept only cash contributions up to $5,500 per year for 2013 through 2017. For individuals who have reached the age of 50 by the end of the year, the
contribution limit is increased to $6,500 per year for 2013 through 2017. For years after 2017, these limits will be increased to reflect a cost-of-living
adjustment, if any.
Article II
The depositor’s interest in the balance in the custodial account is nonforfeitable.
Article III
1. No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled
with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)).
2. No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by
section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion.
Article IV
1. Notwithstanding any provision of this agreement to the contrary, the distribution of the depositor’s interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and the regulations thereunder, the provisions of
which are herein incorporated by reference.
2. The depositor’s entire interest in the custodial account must be, or begin to be, distributed not later than the depositor’s required beginning date,
April 1 following the calendar year in which the depositor reaches age 70
1
/2. By that date, the depositor may elect, in a manner acceptable to the
custodian, to have the balance in the custodial account distributed in:
(a) A single sum or
(b) Payments over a period not longer than the life of the depositor or the joint lives of the depositor and his or her designated beneficiary.
3. If the depositor dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:
(a) If the depositor dies on or after the required beginning date and:
(i) The designated beneficiary is the depositor’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life
expectancy as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the
spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by 1 for
each subsequent year, or, if distributions are being made over the period in paragraph (a)(iii) below, over such period.
(ii) The designated beneficiary is not the depositor’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining
life expectancy as determined in the year following the death of the depositor and reduced by 1 for each subsequent year, or over the period in
paragraph (a)(iii) below if longer.
(iii) There is no designated beneficiary, the remaining interest will be distributed over the remaining life expectancy of the depositor as
determined in the year of the depositor’s death and reduced by 1 for each subsequent year.
(b) If the depositor dies before the required beginning date, the remaining interest will be distributed in accordance with paragraph (i) below or, if
elected or there is no designated beneficiary, in accordance with paragraph (ii) below.
(i) The remaining interest will be distributed in accordance with paragraphs (a)(i) and (a)(ii) above (but not over the period in paragraph (a)(iii),
even if longer), starting by the end of the calendar year following the year of the depositor’s death. If, however, the designated beneficiary is the
depositor’s surviving spouse, then this distribution is not required to begin before the end of the calendar year in which the depositor would have
reached age 70
1
/2. But, in such case, if the depositor’s surviving spouse dies before distributions are required to begin, then the remaining interest will
be distributed in accordance with paragraph (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), over such spouse’s designated
beneficiary’s life expectancy, or in accordance with paragraph (ii) below if there is no such designated beneficiary.
(ii) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the depositor’s death.
4. If the depositor dies before his or her entire interest has been distributed and if the designated beneficiary is not the depositor’s surviving spouse,
no additional contributions may be accepted in the account.
Account number
Form 5305-A (Rev.4-2017) Cat. No. 11820G
M-36 (01/20) @ Pentagon Federal Credit Union, 2020: Page 11
5. The minimum amount that must be distributed each year, beginning with the year containing the depositor’s required beginning date, is known as
the “required minimum distribution” and is determined as follows.
(a) The required minimum distribution under paragraph 2(b) for any year, beginning with the year the depositor reaches age 70
1
/2, is the
depositor’s account value at the close of business on December 31 of the preceding year divided by the distribution period in the uniform lifetime table
in Regulations section 1.401(a)(9)-9. However, if the depositor’s designated beneficiary is his or her surviving spouse, the required minimum
distribution for a year shall not be more than the depositor’s account value at the close of business on December 31 of the preceding year divided by
the number in the joint and last survivor table in Regulations section 1.401(a)(9)-9. The required minimum distribution for a year under this paragraph (a)
is determined using the depositor’s (or, if applicable, the depositor and spouse’s) attained age (or ages) in the year.
(b) The required minimum distribution under paragraphs 3(a) and 3(b)(i) for a year, beginning with the year following the year of the depositor’s
death (or the year the depositor would have reached age 70
1
/2, if applicable under paragraph 3(b)(i)) is the account value at the close of business on
December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section 1.401(a)(9)-9) of the individual specified
in such paragraphs 3(a) and 3(b)(i).
(c) The required minimum distribution for the year the depositor reaches age 70
1
/2 can be made as late as April 1 of the following year. The
required minimum distribution for any other year must be made by the end of such year.
6. The owner of two or more traditional IRAs may satisfy the minimum distribution requirements described above by taking from one traditional IRA
the amount required to satisfy the requirement for another in accordance with the regulations under section 408(a)(6).
Article V
1. The depositor agrees to provide the custodian with all information necessary to prepare any reports required by section 408(i) and Regulations
sections 1.408-5 and 1.408-6.
2. The custodian agrees to submit to the Internal Revenue Service (IRS) and depositor the reports prescribed by the IRS.
Article VI
Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling.
Any additional articles inconsistent with section 408(a) and the related regulations will be invalid.
Article VII
This agreement will be amended as necessary to comply with the provisions of the Code and the related regulations. Other amendments may be
made with the consent of the persons whose signatures appear below.
Article VIII
Article VIII may be used for any additional provisions. If no other provisions will be added, draw a line through this space. If provisions are added,
they must comply with applicable requirements of state law and the Internal Revenue Code and may not imply that they have been reviewed or pre-
approved by the IRS.
Depositor’s signature Date
Custodian’s signature Date
Witness’ signature Date
(Use only if signature of the depositor or the custodian is required to be witnessed.)
General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.
Purpose of Form
Form 5305-A is a model custodial account
agreement that meets the requirements of
section 408(a) However, only Articles I
through VII have been reviewed by the IRS. A
traditional individual retirement account
(traditional IRA) is established after the form is
fully executed by both the individual
(depositor) and the custodian. To make a
regular contribution to a traditional IRA for a
year, the IRA must be established no later
than the due date of the individual’s income
tax return for the tax year (excluding
extensions). This account must be created in
the United States for the exclusive benefit of
the depositor and his or her beneficiaries.
Do not file Form 5305-A with the IRS.
Instead, keep it with your records.
For more information on IRAs, including the
required disclosures the custodian must give
the depositor, see Pub. 590-A, Contributions
to Individual Retirement Arrangements (IRAs),
and Pub. 590-B, Distributions from Individual
Retirement Arrangements (IRAs).
Definitions
Custodian. The custodian must be a bank or
savings and loan association, as defined in
section 408(n), or any person who has the
approval of the IRS to act as custodian.
Depositor. The depositor is the person who
establishes the custodial account.
Traditional IRA for Nonworking
Spouse
Form 5305-A may be used to establish the
IRA custodial account for a nonworking
spouse.
Contributions to an IRA custodial account
for a nonworking spouse must be made to a
separate IRA custodial account established
by the nonworking spouse.
Specific Instructions
Article IV. Distributions made under this
article may be made in a single sum, periodic
payment, or a combination of both. The
distribution option should be reviewed in the
year the depositor reaches age 70
1/2 to
ensure that the requirements of section 408(a)
(6) have been met.
Article VIII. Article VIII and any that follow it
may incorporate additional provisions that are
agreed to by the depositor and custodian to
complete the agreement. They may include, for
example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and
termination, removal of the custodian,
custodian’s fees, state law requirements,
beginning date of distributions, accepting only
cash, treatment of excess contributions,
prohibited transactions with the depositor, etc.
Attach additional pages if necessary.
Form 5305-A (Rev.4-2017)
M-36 (
01/20) @ Pentagon Federal Credit Union, 2020: Page 1
2
Form 5305-RA (Rev.4-2017) Cat. No. 25094Y
Form 5305-RA
(Rev. April 2017)
Department of the Treasury
Internal Revenue Service
Roth Individual Retirement Custodial Account
(Under section 408A of the Internal Revenue Code)
Do not file
with the Internal
Revenue Service
Name of depositor Date of birth of depositor Account number
Address of depositor
Check if amendment . . .
▶
Name of custodian Address or principal place of business of custodian
The depositor named above is establishing a Roth individual retirement account (Roth IRA) under section 408A to provide for
his or her retirement and for the support of his or her beneficiaries after death.
The custodian named above has given the depositor the disclosure statement required by Regulations section 1.408-6.
The depositor assigned the custodial account .
$
The depositor and the custodian make the following agreement.
Article I
Except in the case of a qualified rollover contribution described in section 408A(e) or a recharacterized contribution described in
section 408A(d)(6), the custodian will accept only cash contributions up to $5,500 per year for 2013 through 2017. For individuals who
have reached the age of 50 by the end of the year, the contribution limit is increased to $6,500 per year for 2013 through 2017. For
years after 2017, these limits will be increased to reflect a cost-of-living adjustment, if any.
Article II
1. The annual contribution limit described in Article I is gradually reduced to $0 for higher income levels. For a grantor who is single
or treated as single, the annual contribution is phased out between adjusted gross income (AGI) of $118,000 and $133,000; for a
married grantor filing jointly, between AGI of $186,000 and $196,000; and for a married grantor filing separately, between AGI of $0
and $10,000. These phase-out ranges are for 2017. For years after 2017, the phase-out ranges, except for the $0 to $10,000 range,
will be increased to reflect a cost-of-living adjustment, if any. Adjusted gross income is defined in section 408A(c)(3).
2. In the case of a joint return, the AGI limits in the preceding paragraph apply to the combined AGI of the depositor and his or her
spouse.
Article III
The depositor’s interest in the balance in the custodial account is nonforfeitable.
Article IV
1. No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account
be commingled with other property except in a common trust fund or common investment fund (within the meaning of section
408(a)(5)).
2. No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise
permitted by section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws
of any state, and certain bullion.
Article V
1. If the depositor dies before his or her entire interest is distributed to him or her and the depositor’s surviving spouse is not the
designated beneficiary, the remaining interest will be distributed in accordance with paragraph (a) below or, if elected or there is no
designated beneficiary, in accordance with paragraph (b) below.
(a) The remaining interest will be distributed, starting by the end of the calendar year following the year of the depositor’s death,
over the designated beneficiary’s remaining life expectancy as determined in the year following the death of the depositor.
(b) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the depositor’s
death.
2. The minimum amount that must be distributed each year under paragraph 1(a) above is the account value at the close of
business on December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section
1.401(a)(9)-9) of the designated beneficiary using the attained age of the beneficiary in the year following the year of the depositor’s
death and subtracting 1 from the divisor for each subsequent year.
3. If the depositor’s surviving spouse is the designated beneficiary, such spouse will then be treated as the depositor.
Article VI
1. The depositor agrees to provide the custodian with all information necessary to prepare any reports required by sections 408(i)
and 408A(d)(3)(E), Regulations sections 1.408-5 and 1.408-6, or other guidance published by the Internal Revenue Service (IRS).
M-36 (01/20) @ Pentagon Federal Credit Union, 2020: Page 13
Form 5305-RA (Rev.4-2017) Cat. No. 25094Y
2. The custodian agrees to submit to the IRS and depositor the reports prescribed by the IRS.
Article VII
Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through IV and this sentence will
be controlling. Any additional articles inconsistent with section 408A, the related regulations, and other published guidance will be
invalid.
Article VIII
This agreement will be amended as necessary to comply with the provisions of the Code, the related regulations, and other
published guidance. Other amendments may be made with the consent of the persons whose signatures appear below.
Article IX
Article IX may be used for any additional provisions. If no other provisions will be added, draw a line through this space. If
provisions are added, they must comply with applicable requirements of state law and the Internal Revenue Code and may not imply
that they have been reviewed or pre-approved by the IRS.
Depositor’s signature Date
Custodian’s signature Date
Witness’ signature Date
(Use only if signature of the depositor or the custodian is required to be witnessed.)
General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.
Purpose of Form
Form 5305-RA is a model custodial
account agreement that meets the
requirements of section 408A. However,
only Articles I through VIII have been
reviewed by the IRS. A Roth individual
retirement account (Roth IRA) is
established after the form is fully
executed by both the individual
(depositor) and the custodian. This
account must be created in the United
States for the exclusive benefit of the
depositor and his or her beneficiaries.
Do not file Form 5305-RA with the
IRS. Instead, keep it with your records.
Unlike contributions to traditional
individual retirement arrangements,
contributions to a Roth IRA are not
deductible from the depositor’s gross
income; and distributions after 5 years
that are made when the depositor is
59
1
/2 years of age or older or on account
of death, disability, or the purchase of a
home by a first-time homebuyer (limited
to $10,000), are not includible in gross
to $10,000), are not includible in gross
income. For more information on Roth
IRAs, including the required disclosures
the custodian must give the depositor,
see Pub. 590-A, Contributions to
Individual Retirement Arrangements
(IRAs), and Pub. 590-B, Distributions
from Individual Retirement Arrangements
(IRAs).
Definitions
Custodian. The custodian must be a
bank or savings and loan association, as
defined in section 408(n), or any person
who has the approval of the IRS to act
as custodian.
Depositor. The depositor is the person
who establishes the custodial account.
Specific Instructions
Article I. The depositor may be subject
to a 6% tax on excess contributions if
(1) contributions to other individual
retirement arrangements of the depositor
have been made for the same tax year,
(2) the depositor’s adjusted gross
income exceeds the applicable limits in
Article II for the tax year, or (3) the
depositor’s and spouse’s
compensation is less than the amount
contributed by or on behalf of them for
the tax year.
Article V. This article describes how
distributions will be made from the Roth
IRA after the depositor’s death. Elections
made pursuant to this article should be
reviewed periodically to ensure they
correspond to the depositor’s intent.
Under paragraph 3 of Article V, the
depositor’s spouse is treated as the
owner of the Roth IRA upon the death of
the depositor, rather than as the
beneficiary. If the spouse is to be treated
as the beneficiary, and not the owner, an
overriding provision should be added to
Article IX.
Article IX. Article IX and any that follow
it may incorporate additional provisions
that are agreed to by the depositor and
custodian to complete the agreement.
They may include, for example,
definitions, investment powers, voting
rights, exculpatory provisions,
amendment and termination, removal of
the custodian, custodian’s fees, state
law requirements, beginning date of
distributions, accepting only cash,
treatment of excess contributions,
prohibited transactions with the
depositor, etc. Attach additional pages if
necessary.
M-36 (01/20) @ Pentagon Federal Credit Union, 2020: Page 14
Page 15M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 742 (01/20) © Pentagon Federal Credit Union, 2020
GENERAL
This Disclosure Statement explains the Internal Revenue Service (IRS) rules and regulations
governing the operation and tax considerations of an Individual Retirement Arrangement
(IRA). Additionally, the Disclosure explains specific features of your Pentagon Federal Credit
Union (PenFed) IRA. It is furnished to you in accordance with Internal Revenue Service
regulations. We have highlighted sections, which are extremely important.
This disclosure applies to all IRAs oered by PenFed. The term “Traditional IRA” applies
to Contributory, Rollover, or SEP IRAs, and “Roth IRA” applies to the IRA created by the
Taxpayer Relief Act of 1997.
Because some of these provisions apply only to a Traditional IRA or to a Roth IRA, either
“Traditional” or “Roth” will precede section titles. Those sections applying to both will state
“Traditional/Roth.”
I. ACCOUNT REVOCATION
TRADITIONAL/ROTH. You may decide for any reason to revoke your Pentagon Federal IRA
within 30 days of the date of establishment. Your request to revoke your account must
be made in writing and should be sent to Pentagon Federal Credit Union, Attention: IRA
Department, PO Box 247009, Omaha, NE 68124-7009. Upon receipt of your letter, PenFed
will refund your contribution in full, neither crediting your account with earnings nor
charging it with any administrative fees. Revocation of your IRA is subject to reporting to
the IRS. If you have questions concerning your right to revoke your account, please call us
at 1-800-247-5626.
II. LEGAL REQUIREMENTS
TRADITIONAL/ROTH. Your IRA is a custodial account established for the sole benefit of
you and your designated beneficiaries. An IRA must be established by a written document
meeting each of the following provisions:
1. TRADITIONAL/ROTH. You may not act as your own trustee or custodian. The account
must be established with an authorized trustee or custodian, such as Pentagon Federal
Credit Union. This IRA has been approved as to form by the IRS. This approval is a
determination only as to the form of the account and does not represent a determination
of the merits of the account.
2. TRADITIONAL/ROTH. All contributions or rollover deposits made to your account must
be made in cash, e.g., check, payroll deduction, transfer etc. If you wish to use shares of
stock, bonds, or other investment instruments as your contribution, you must first sell the
securities and contribute the proceeds. Your PenFed IRA may not be funded with gold
bullion or coins. Total contributions may not exceed amounts authorized by law.
3. TRADITIONAL/ROTH. Your contributions are not subject to forfeiture.
4. TRADITIONAL/ROTH. No part of your IRA may be commingled with other funds except
in a common trust fund or investment fund. Further, no part of your IRA interest may be
invested in life insurance contracts.
5. TRADITIONAL. Your IRA must be distributed in accordance with IRS regulations. Article
X explains the required distributions you must receive from your IRA and in the event of
your death the distributions your beneficiary(ies) must receive.
ROTH. Mandatory distribution requirements at age 70½ do not apply to the Roth IRA.
6. TRADITIONAL/ROTH. If you name a beneficiary other than your spouse, spousal consent
may be required. This is indicated on the IRA application.
III. TAX CONSIDERATIONS
The primary tax consequences you should consider before establishing an IRA are as
follows. For more specific tax information, please consult with your accountant, tax advisor,
IRS Publication 590A, or contact your local Internal Revenue Service oce.
1. TRADITIONAL. Tax-Deferred Dividends. All dividends earned on your IRA contributions
are tax deferred. This includes earnings on contributions that are not tax deductible.
Earnings are subject to tax when you actually begin receiving distributions (or a
distribution is deemed to be made).
ROTH. All dividends earned on your IRA contributions are tax-free, subject to certain
limitations.
2. TRADITIONAL. Tax-Deductible Contributions. You may be able to make tax-deductible
contributions to an IRA not to exceed the current annual limit or 100% of earned income,
whichever is less, for any year you are less than 70½ years of age. You are permitted
this deduction if either you, or your spouse (if married), is not an active participant in
a qualified retirement plan, or if your modified adjusted gross income does not exceed
certain limits established by IRS.
ROTH. Contributions to your IRA are not deductible. Contributions may be made after
you attain age 70½ provided you have earned income.
3. TRADITIONAL. Nondeductible Contributions. Although you may not qualify for a tax-
deductible contribution, you may still make a contribution to an IRA not to exceed the
current annual limit or 100% of earned income, whichever is less, for any year you are
less than 70½ years of age.
TRADITIONAL/ROTH. You may split your contributions between a Traditional or Roth
IRA, subject to maximum contributions not to exceed the current annual limit or 100% of
earned income, whichever is less.
4. TRADITIONAL. Taxable Distributions. Generally, any distribution you receive from your
IRA that is not rolled over to another IRA within 60 days from the date of receipt must
be included in your gross income for federal income tax purposes. Such distributions
are subject to ordinary income tax rates and are not eligible for either capital gains
treatment or the elective 10-year averaging, which is available for certain lump-sum
distributions from “qualified” retirement plans. Exceptions to this rule occur if 1) you
have made nondeductible contributions to a Traditional IRA, or 2) the distribution of
certain refunds of an excess contribution. If you have made nondeductible contributions,
a portion of your distribution will not be taxed as it represents a recovery of the taxable
(nondeductible) contribution. Distribution of a refund of an excess contribution, greater
than the maximum annual contribution, will be taxable income, regardless of whether a
deduction was allowed for the contribution.
ROTH. Distributions from your Roth are not includable in income if the distribution is a
“qualified distribution.” A qualified distribution may not be received within the 5-tax
year period beginning with the first tax year in which a contribution is made. Qualified
distributions are distributions: made after you attain age 59½, made on your death, disability
dis
tributions, or f
or first time home purchase, for qualified higher education expenses, for
medical expense exclusion, or for medical premiums for unemployed individuals.
5. TRADITIONAL/ROTH. Tax-Free IRA Rollover. Rollover distributions you take from your
IRA are not taxable to you, provided the entire amount is rolled over into an IRA within
60 days from the date you receive the funds. Any amount not rolled over within this time
period will be deemed as distributed by the IRS. Neither the IRS nor PenFed can extend
the 60-day time period. To qualify as a tax-free rollover it must be a rollover from a
Traditional IRA to another Traditional IRA or a Roth IRA to another Roth IRA.
TRADITIONAL/ROTH. Rollover from a Traditional IRA to a Roth IRA. This is also referred
to as a “conversion.” Special rules apply to this type of rollover. A rollover from a
Traditional IRA to a Roth will be taxable. Otherwise, the rollover is taxable in the year in
which the rollover/conversion occurs.
6. TRADITIONAL/ROTH. Prohibited Transactions. If you engage in a “prohibited transaction”,
such as borrowing from your IRA or selling your interest in your IRA, your account will
lose its tax-favored treatment. The entire balance (unless you have made nondeductible
contributions) will be immediately taxable AND, if you are not yet 59½ years of age, the
amount will be subject to the IRS 10% premature distribution penalty.
7. TRADITIONAL/ROTH. Pledging IRA Funds as Collateral. If you pledge your IRA as
collateral, the amount pledged will be deemed to have been distributed to you and that
amount must be includable in your gross income in the year the funds were pledged. If
you have not attained 59½ years of age, the IRS 10% premature distribution penalty will
apply.
IV. AMOUNT AND TIMING OF CONTRIBUTIONS
1. TRADITIONAL. Maximum Contribution. The total amount you may contribute for any tax
year may not exceed the current annual limit or 100% of earned income, whichever is less
(excluding any amount rolled over). Additionally, you must be less than 70½ years of age
for the tax year you are contributing for (SEP IRA-holders may continue to contribute
as long as they have earned income and they begin receiving mandatory distributions).
ROTH. The total amount you may contribute for any tax year may not exceed the current
annual limit or 100% of earned income, whichever is less (excluding any amount rolled
over). You may continue to make contributions after you attain age 70½ provided you
have earned income.
TRADITIONAL/ROTH. You may split your contributions between a Traditional or Roth
however you choose; however, total contributions may not exceed the current annual
limit or 100% of earned income, whichever is less.
2. TRADITIONAL/ROTH. A minimum $25.00 contribution must be made to establish
your IRA. Once established, you need not make a contribution each year, nor is there
a minimum annual contribution amount required. You may make contributions of any
amount as frequently as you like, subject to annual contribution limits. If you decide not
to make a contribution prior to the tax-filing deadline, you may not make this up in a
later year.
3. TRADITIONAL/ROTH. Definition of Earned Income. Earned income is defined as: wages,
salaries, professional fees, or other amounts derived from or received for personal
services actually rendered (including but not limited to tips, bonuses, and commissions).
Also included, as “earned income” is any amount includable in gross income with respect
to a divorce decree or separation document (i.e., alimony or separate maintenance
payments). Earned income must be reduced by any deduction a self-employed individual
takes for contributions they made to their Keogh plan.
4. TRADITIONAL/ROTH. IRA for Your Non-Working Spouse. If a spouse does not have
earned income, a spousal IRA may be established. The combined contribution may not
exceed the current annual limit or 100% of earned income, whichever is less. However,
your contribution to either account may not exceed the current annual limit.
5. TRADITIONAL. Limited Contributions After Age 70½. You may make contributions to
your IRA (both deductible and/or nondeductible) for any taxable year you have earned
income until the year you reach age 70½. In the year you attain age 70½, you may make
a contribution for the previous tax year provided it is done prior to the tax-filing deadline.
You may also contribute to a spousal IRA provided you have earned income and your
spouse is less than 70½ years of age. Your spousal contribution may not exceed the
current annual limit or 100% of earned income, whichever is less.
ROTH. Contributions after age 70½. You may make contributions after you attain age
70½ for any tax year in which you have earned income.
6. TRADITIONAL/ROTH. Contributions by Tax Filing Deadline. You may make contributions
for a tax year at any time during the year either by periodic payments or in one lump sum,
up to and including the tax-filing deadline (excluding extensions). For members filing
on a calendar-year basis, the tax filing deadline is generally April 15. For contributions
made between January 1 and the tax filing deadline for the previous tax year, referred to
as “prior year contributions,” you must specifically designate the contribution as such.
Contributions made by direct deposit will be credited for the taxable year in which they
are received. Contributions received without a tax year designation will be credited for
the prior tax year if received on or before that year’s tax filing deadline. Undesignated
contributions received after the tax-filing deadline will be credited for the calendar year
received. If we are not able to credit your tax-year contribution as you have designated,
your funds will be credited to your Regular Share account and PenFed will contact you.
7. TRADITIONAL. Rollover from an Employer’s Plan to an IRA. If you receive a qualified
total distribution from your employer’s qualified plan, you may be able to roll over all or
a portion of it, tax free, to an IRA. You can roll over the distribution if:
a. It is received within one tax year because your employer ends the plan; or,
b. It is received within one tax year because your employer stops making contributions
to the plan; or,
c. It is a lump-sum distribution; or,
d. It is a distribution of all or part of your voluntary deductible employee contributions. You
can roll over, tax-free, all or part of a lump-sum distribution from your employer’s plan.
A lump-sum distribution is a distribution of your complete share in the plan, received
within one year that is made:
a. Because of your death; or,
b. After you are age 59½; or,
c. It is a distribution of all or part of your voluntary deductible employee contributions.
You can roll over, tax free, all or part of a lump-sum distribution from your employer’s
plan.
INDIVIDUAL RETIREMENT AGREEMENT DISCLOSURE STATEMENT
(INCLUDING SIMPLIFIED EMPLOYEE PENSION PLAN)
Page 16M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 742 (01/20) © Pentagon Federal Credit Union, 2020
A lump-sum distribution is a distribution of your complete share in the plan, received
within one year that is made:
a. Because of your death; or,
b. After you are age 59½; or,
c. Because you left your job (unless you are self-employed); or,
d. After you become permanently disabled (but only if you are self-employed). If you
receive a qualified total distribution and roll over all or part of it into an IRA, you may
later roll over those funds into a new employer’s plan. It is generally recommended
that you deposit these funds in a separate IRA. This is referred to as a “Rollover or
Conduit IRA.” By segregating these funds from IRA contributions you have made, and
making no additional contributions to this account, you preserve your option of rolling
the funds over to a future employer’s plan.
ROTH. Rollover from an Employer’s Plan to a Roth is prohibited. You may not rollover
distributions from your employer’s qualified plan.
V. OTHER CONTRIBUTIONS
1. TRADITIONAL. Partial Distribution from a Qualified Plan. You may elect to roll over, tax
free, all or a part of a partial distribution you receive from your qualified plan, if the
following conditions are met:
a. The partial distribution is equal to at least 50% of your account balance in the plan;
and
b. The distribution must be rolled over into an IRA.
If you elect partial distribution roll-over treatment, you may not later roll over any portion
of the distribution from the IRA into another qualified employer plan.
ROTH. Partial distributions from Qualified Plan may not be rolled over to a Roth IRA.
2. TRADITIONAL/ROTH. IRA to IRA Custodial Transfer. This occurs when you instruct (in
writing) one custodian to send or transfer all or part of your IRA funds directly to another
custodian. You should inquire at an institution holding the IRA whether any penalties
would apply as the result of the transfer. There is no limit as to the number or frequency
of transfers. Transfers must occur between the same type of IRA, i.e., Traditional to
Traditional, or Roth to Roth. No tax deduction is allowed for the amount transferred.
TRADITIONAL. Any transfer occurring after age 70½ is subject to the required minimum
distribution provisions. Refer to X.5. for more details.
3. TRADITIONAL/ROTH. IRA Rollover. You may request (in writing) a withdrawal from each
IRA you have for the purpose of rolling over these funds to an IRA at another financial
institution, not more frequently than once every 365 days. You must roll (deposit) the
funds into an IRA within 60 days of the date you received them. Funds not rolled over
within 60 days will be deemed as distributed by the IRS and subject to ordinary income
tax as well as the premature distribution penalty, provided you have not reached age
59½. No tax deduction is permitted for amounts rolled over.
VI. TAX DEDUCTIBLE CONTRIBUTIONS
The deductibility of your IRA contributions is based on the following rules and regulations:
1. TRADITIONAL. Not an Active Participant. If you, or your spouse, if married, are not an
active participant(s) in an employer-sponsored pension plan, you may each contribute
an amount not to exceed the current annual limit or 100% of earned income. Your
contributions are tax deductible regardless of your modified adjusted gross income.
2. TRADITIONAL. Active Participation. You are considered an “active participant” for
any year you are covered by a retirement plan. You are “covered” for the purpose of
determining your deductible contribution limit if your employer or union has a retirement
plan under which money was added on your behalf, or you were eligible to have a
contribution made on your behalf. For example, if you are covered under a qualified
pension, profit-sharing, stock bonus, or annuity plan (this includes 401(k) and Keogh
plans), a tax-sheltered annuity plan under Section403(b) of the Internal Revenue Code,
a simplified employee pension (SEP) plan, or a government plan (but not an unfunded
deferred-compensation plan covered under Section 457 of the Code) during any part
of the plan year ending with or within the taxable year, you are most likely an “active
participant.” You are an active participant for a year even if you are not yet vested in
your retirement plan. Also, if you make required contributions or voluntary employee
contributions to a retirement plan, you are an active participant. In some cases, you may
be considered an active participant even if you were only covered by certain plans with
an employer during part of the year.
You are not considered an active participant if you are covered in a plan because of your
service as 1) an Armed Forces Reservist for less than 90 days a year, or 2) a volunteer
fire fighter covered for firefighting service by a government plan. If you are covered by
another plan, these exceptions do not apply.
Your IRS Form W2 (Wage and Income Statement) you receive from your employer
should indicate whether you are an active participant in the employer’s sponsored plan.
3. TRADITIONAL. Determining your Deductible Contribution Amount. If either you or your
spouse, if married, was covered by an employer-sponsored pension plan (as defined
above) anytime during the taxable year, only a portion of your contribution for that
taxable year may be tax deductible. The amount you may deduct (if any) is dependent
on your combined modified adjusted gross income.
ROTH. Contributions to your Roth are not deductible.
VII. NONDEDUCTIBLE CONTRIBUTIONS
TRADITIONAL. Even though you do not qualify for a deductible contribution, you
are permitted to make nondeductible contributions. You may make non-deductible
contributions in addition to deductible contributions not to exceed the current annual limit
if a Spousal IRA has been established for a non-working spouse or 100% of earned income,
whichever is less. If you are an active participant and your modified adjusted gross income is
above the limit set for a partial deduction, your entire contribution up to the legal maximum
will be nondeductible.
1. TRADITIONAL. Deductible and Nondeductible Contributions. The determination as to
whether your contribution is deductible is made at the time you file your income tax
return. You will be required to complete IRS Form 8606 to designate a contribution
as “nondeductible.” You are responsible for keeping track of your deductible and
nondeductible contributions; PenFed cannot do this for you.
2. TRADITIONAL. Tax Treatment. Because no deduction is taken at the time a nondeductible
contribution is made, these amounts are not taxable when withdrawn. However, all
earnings on your nondeductible contributions are tax-deferred and thus subject to
ordinary income tax when withdrawn.
3. TRADITIONAL. Withdrawal of Nondeductible Contributions. As with deductible
contributions, you are required to begin receiving distributions from your IRA by April
1 of the year following the year you attain age 70½ (see section X). However, you will
be required to complete IRS Form 8606 to determine what portion of your distribution
is a recovery of a nondeductible contribution (and thus not taxable when withdrawn)
and what portion of your withdrawal represents tax-deferred earnings or deductible
contributions which will now be subject to tax.
VIII. EXCESS CONTRIBUTIONS
Any amount you contribute to your IRA either as a Rollover or a tax year contribution that is
above the legal maximum for your situation is considered an “excess contribution.” The IRS
provides for various methods of “curing” an excess contribution dependent on the amount
of the excess and when the excess is cured (before or after the tax-filing deadline). You must
file IRS form 5329 for any year in which you have an excess contribution.
1. TRADITIONAL/ROTH. Refund of Excess Contribution Before the Tax Filing Deadline. If
you make a contribution to your IRA for a taxable year that exceeds your IRA deduction
limit you may designate it as a nondeductible contribution when you file your tax return,
so long as the total (deductible and nondeductible contribution) does not exceed the
current annual limit or 100% of earned income, whichever is less.
If you cannot or do not wish to treat the excess as a nondeductible contribution,
you may withdraw the amount of the excess plus the earnings prior to the tax-filing
deadline including extensions. The amount of the excess will not be taxable, provided no
deduction is taken, but the earnings attributable to the excess will be taxable at ordinary
income tax rates. Additionally, if you are less than 59½ years of age, you will be subject
to the IRS 10% premature distribution penalty of the amount of earnings withdrawn.
The IRS has specific rules for the calculation of the earnings attributable to the excess
contribution. PenFed will make this calculation.
2. TRADITIONAL/ROTH. Refund of Excess Contribution After the Tax Filing Deadline. If an
excess contribution is not removed prior to the tax filing deadline (including extensions),
the refunded excess contribution will not be includable in income as an IRA distribution
(and thus possibly subject to the 10% premature distribution penalty) if your total IRA
contribution was less than the current annual limit and you did not take a deduction for
the amount of the excess. However, you will be subject to an IRS penalty of 6% of the
amount of the excess for each year it remains in your IRA. Under this option IRS does not
require you to withdraw the earnings attributable to the excess contribution.
3. TRADITIONAL/ROTH. Refund of Excess Contribution Greater than the Current Annual
Limit and After the Tax Filing Deadline. If your contribution is above $3,000 ($3,500 if 50
and older), the amount of the excess will be includable in income in the year withdrawn
regardless of whether a deduction was taken. Additionally, you will be subject to a 6%
penalty of the amount of the excess for each year the amount remains in your IRA. Under
this option, the IRS does not require you to remove the earnings attributable to the
excess contribution.
4. TRADITIONAL/ROTH. Applying an Excess Contribution to a Subsequent Tax Year.
Provided no deduction was taken and the amount of the total contribution (including
the excess) was not greater than the Current Annual Limit, you may apply the amount
of the excess contribution to the following tax year. This is done by not contributing the
maximum amount to the subsequent year. Since no deduction was taken in the prior
year, the total amount (your contributions, if any, plus the amount of the prior year’s
excess) may be designated as deductible or nondeductible.
IX. SIMPLIFIED EMPLOYEE PENSION PLAN (SEP)
TRADITIONAL. A SEP IRA is a special type of IRA that allows employers to make deductible
contributions to a separate specifically designated IRA established by their employees
(or for themselves if self-employed). Contributions may be made each year not to exceed
the current annual limit. Additionally, an employee may make their own IRA contribution
into the SEP not to exceed the annual limit or 100% of earned income whichever is less.
Employee contributions must be specifically designated at the time of deposit.
X. DISTRIBUTIONS
TRADITIONAL. In general, distributions you receive from your IRA will be includable in your
gross income for the year received. Exceptions to this include properly executed Rollover,
certain refunds of excess contributions and nondeductible contributions.
ROTH. Qualified distributions from your Roth are generally tax free. (See IV.4. Roth)
1. TRADITIONAL. Ordinary Income Tax. Distributions that are includable in gross income
will be taxed at ordinary income tax rates.
2. TRADITIONAL. Distribution of Nondeductible Contributions. If you withdraw an amount
from your IRA and you have previously made nondeductible contributions, then the
amount excludable from income for the taxable year is the portion of the amount
that bears the same ratio to the amount withdrawn as your aggregate nondeductible
contributions bears to your aggregate (including any SEP or Rollover IRA you may
have) IRA balance at the end of the year. For example, an individual withdraws $2,000
from an IRA. At the end of the year the aggregate (or fair market value) of all their
IRAs is $25,000, the aggregate amount of nondeductible contributions previously not
withdrawn is $4,000. The amount of the individual distribution excludable from taxable
income is $296 ($4,000/$27,000 times $2,000) and the remaining $1,704 is taxable.
3. TRADITIONAL/ROTH. Penalty for Early (Premature) Withdrawals. If you receive a taxable
distribution from your IRA before you attain age 59½, for any reason other than disability,
home purchase, qualified education expenses, medical expense exclusion, or medical
premiums for unemployed individuals, it will be subject to an IRS penalty of 10% of the
amount withdrawn. This IRS penalty is nondeductible and is paid when you file your
income tax return.
4. TRADITIONAL. Series of Substantially Equal Periodic Payments. You may elect at any
time to begin receiving regularly scheduled distributions from your IRA. Distributions
may be made on a monthly, quarterly, or annual basis. To avoid the IRS early withdrawal
penalty, the distribution plan may not be modified, other than by reason of death or
disability, before you attain age 59½ or 5 years after payments have begun and you attain
age 59½. You are responsible for determining the amount of the periodic payments.
5. TRADITIONAL. Minimum Distributions Requirement. The IRS requires you to begin
receiving distributions from your IRA no later than April 1 of the year following the year
you attain 70½. The minimum amount to be distributed each year, beginning no later
than the required beginning date, is determined by dividing your December 31 total
account balance of the prior year by your age as provided in the IRS Uniform Lifetime
table or Joint Life table (if spouse is more than 10 years younger). You may also elect
Page 17M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 742 (01/20) © Pentagon Federal Credit Union, 2020
to have distribution in a lump sum or over a period not to exceed the Uniform Lifetime
table or Joint Life table (if spouse is more than 10 years younger). If you have more than
one IRA, you are not required to take the required minimum distribution from each IRA;
however, you must inform PenFed if you decide to take the minimum distribution from
another IRA. You are required to determine the required minimum distribution from each
IRA, and the total of these amounts may be distributed from any one or more of your IRAs.
If you roll over funds to PenFed from another institution, after attaining age 70½, you will
need to notify PenFed of any changes to your distribution schedule.
ROTH. There are no mandatory distribution requirements.
a. TRADITIONAL. Distribution Frequency. Once the minimum annual amount has been
determined based on the distribution option you select, you may select a distribution
frequency. You may elect to receive monthly, quarterly or annual payments either by
deposit to a PenFed account or by having a check sent directly to you. Funds will be
distributed from the IRA Share account or IRA Certificate paying the lowest dividend
rate.
b. TRADITIONAL. Delay of Distributions. Although you may delay your distribution for
your 70½ year to April 1 of the following year, you will also be required to receive
a distribution for that taxable year by December 31. If distribution is delayed and
you have requested annual distributions, the 70½ years’ distribution will be made
April 1 (the required beginning date) and the current year’s distribution will be made
December 1. For monthly and quarterly distributions, you may select the beginning
date provided it is no later than April 1. One distribution will be made at each interval
(monthly or quarterly) which represents the delayed 70½ year’s distribution and the
current year’s required distribution.
c. TRADITIONAL. Changing Distribution Options. You may at any time elect to change
the distribution frequency, i.e., monthly, quarterly or annually, or elect to receive the
balance in a lump sum. However, IRS regulations prohibit changing the distribution
option, i.e., Uniform Lifetime table or Joint Life table (if spouse is more than10 years
younger) to an option that would provide for an annualized pay out of a lesser
amount. To this extent, your distribution option selection will be irrevocable. However,
if you named your spouse as beneficiary and have a change in your marital status, due
to death or divorce and name a new beneficiary, you may change your distribution
option. You may request additional distributions at any time.
d. TRADITIONAL. Penalty for Failing to Receive Minimum Distribution. Based on the
instructions you provide PenFed, we will process your distributions in accordance
with IRS regulations. It is your responsibility to ensure you have received the required
minimum distribution for each year. Additionally, if you rollover funds to PenFed from
another institution after attaining age 70½, you need to notify PenFed of any changes
to your distribution schedule.
XI. DISTRIBUTIONS UPON DEATH
Traditional/Roth. In the event of your death, the funds will be disbursed to the named
beneficiary(s). If you do not name beneficiary(s) your IRA will be includable in your estate.
Distribution options and tax consequences vary according to whether the beneficiary is
the spouse and whether required distributions have begun. Failure of your beneficiary
or spouse’s beneficiary to carry out one of the distribution options described below, on
a timely basis, as required by law, may result in a 50% excise tax penalty being applied.
Further, if the beneficiary does not provide PenFed instructions regarding distribution of
the IRA funds, the entire balance will be distributed no later than December 1 of the year
following the owner’s death.
If you die before distribution has begun (prior to attaining age 70½), the entire balance will
be distributed to the named beneficiary(s) under one of the following options:
1. TRADITIONAL/ROTH. 5-year rule. Spouse/Non-spouse option. The entire balance must
be paid to the named beneficiary(s) (if any) or to your estate no later than December 31
of the 5th year following the year of the owner’s death.
2. TRADITIONAL. Life Expectancy rule. Spouse/Non-spouse option. The entire balance
will be distributed in substantially equal installments over the life expectancy of the
beneficiary(s). For spouse beneficiary, those distributions must begin on or before
December 31 of the calendar year immediately following the calendar year the member
died and the end of the calendar year in which the decedent would have attained
age 70½. For the non-spouse beneficiary those distributions must begin on or before
December 31 of the calendar year in which the member died. The beneficiary(s) may
elect to receive larger payments at any time. Each beneficiary may establish their own
distribution plan, provided individual accounts are established.
3. TRADITIONAL. Treat IRA as Own. Spouse option only. May elect to treat the account
as their own IRA and may be required to transfer to their own IRA account. The spouse
is required to transfer to their own IRA account. Membership in PenFed will also be
required. This election will be deemed to have been made if the surviving spouse makes
a contribution to the account, makes a rollover from the account, or fails to elect one of
the two options above by December 31 of the year following the date of death.
If you die after distribution has begun (after attaining age 70½), the required minimum
distribution for the year must be taken. The following option applies for non-spouse
beneficiary or estate:
SINGLE LIFE EXPECTANCY PAYMENTS. The required minimum distribution for the
year must be taken for the decedent, must begin by December 31 of the year following
member’s death, and must be distributed at least as frequently as under the distribution
method being used.
FOR SPOUSE NAMED AS SOLE BENEFICIARY, THE FOLLOWING OPTIONS APPLY:
a. Treats account as own. May treat the account as their own and may be required to
transfer to their IRA account. This election will be deemed to have been made if the
surviving spouse makes a contribution to the account, makes a rollover from the
account or fails to make an election.
b. Single Life Expectancy payments. Must begin by December 31 of the year following
member’s death. Must be distributed at least as frequently as under the distribution
method being used.
XII. INCOME TAX WITHHOLDING
TRADITIONAL. You may elect to have federal income tax withheld from any distribution
at the rate of only 10% of the total amount distributed. This election is optional to all IRA
holders unless your PenFed address of record is outside the United States. IRS regulations
require mandatory 10% withholding on all IRA distributions sent outside the United States
(excluding American Samoa, Mariana Islands, Puerto Rico, U.S. Virgin Islands, FPO, APO, and
Guam). However, you must specifically indicate that you do not want Federal Income Tax
Withholding on the PenFed distribution form, otherwise withholding will occur.
XIII. PENTAGON FEDERAL ACCOUNT DISCLOSURES
TRADITIONAL/ROTH—all provisions.
1. The credit union reserves the right to make changes in the terms and conditions of its
IRA program without prior notice.
2. I
RA Share and Certificate accounts are insured separately from any other account you may
have with PenFed up to $250,000 by NCUA, an agency of the United States government.
3. IRA Share accounts are subject to the following terms and conditions:
a. Dividends are calculated on a simple-interest basis from day of deposit until day
of withdrawal, compounded and paid monthly at a rate declared by the Board of
Directors. Dividends are paid from current income and available earnings, after
required transfers to reserves at the end of a dividend period.
b. The minimum amount required to establish and maintain an IRA Share account is $25.00.
c. Additions may be made at any time, in any amount, subject to the limits provided by
law for the type of IRA selected.
d. Withdrawals:
(1) Only you may request a withdrawal from your IRA Share account; beneficiaries
have access to the account only upon your death.
(2) Partial withdrawals may be made, subject to early withdrawal penalties as
described in paragraph (g) below, providing the requested withdrawal amount
does not reduce the original issue below a minimum of $1,000 for 1-, 2-, 3-, 4-,
5-, or 7-year IRA Certificates, in which case the funds will be transferred to the
IRA Share account.
(3) The credit union reserves the right to require a written notice of up to 60 days of
intention to withdraw from your IRA Share account.
4. IRA Certificates are subject to the following terms and conditions:
a. Maturity of 1, 2, 3, 4, 5, or 7 years are available.
b. The minimum amount required for a 1-, 2-, 3-, 4-, 5-, or 7-year IRA Certificate is$1,000.
c. The dividend rate is set weekly by the Board of Directors.
d. Dividends:
(1) Dividends are compounded daily on a 365/365 day basis and are credited monthly.
(2) Dividends will be paid from day of deposit to day of maturity on the balance of
the Certificate. They will be paid at the contracted rate.
e. ADDITIONS TO CERTIFICATES MAY BE MADE ONLY AT MATURITY. New Certificates
may be purchased at any time subject to PenFed minimum deposit requirements and
applicable annual contributions limits established by the government.
f. WITHDRAWALS:
(1) Only you may request a withdrawal from your IRA Certificates; beneficiaries have
access to the account only upon your death. Funds are available for withdrawal
on the business day following the maturity date. If the maturity date is a Sunday,
funds will be
(2) Partial withdrawals may be made, subject to early withdrawal penalties as
described in paragraph (g) below, providing the requested withdrawal amount
does not reduce the original issue below a minimum of $1,000 for 1-, 2-, 3-, 4-,
5-, or 7-year IRA Certificates, in which case the funds will be transferred to the
IRA Share account.
(3) The credit union reserves the right to require a written notice of up to 60 days of
intention to withdraw funds from your IRA Certificate(s).
g. PENALTIES. In the event of early withdrawal, the following penalties apply:
(1) If redeemed within the first year, all dividends will be forfeited.
(2) If after the first year, but prior to the maturity date, the early withdrawal penalty
will equal 30% of what would have been earned if the Certificate had been held
to maturity, not to exceed total dividends earned.
(3) Exceptions. The penalties described above will not be applied if the withdrawal is
made:(i) Subsequent to the death of any holder of the Certificate.(ii) As a result
of the voluntary or involuntary liquidation of the credit union. (iii) If the owner
is permanently disabled, as defined in the Internal Revenue Code Section 72(m).
(iv) If the owner has reached age 59½ and takes a partial withdrawal in the form
of a distribution.
5. IRA Premier Share account is a variable rate account. The dividend rates and APY may
change monthly as determined by the Board of Directors. There are no limitations on the
amount the dividend rate may change. The dividend rate is based on the daily balance
in your account. If the daily balance is $10,000 or more, you will be paid the dividend
rate applicable to this tier. If the daily balance is less than $10,000, you will be paid
the dividend rate applicable to this tier. PenFed pays dividends on the full balance in
the account at the dividend rate that corresponds to the applicable share balance tier.
Therefore, during your dividend period based on fluctuating account balance, you may
be paid dividends at varying dividend rates.
a. Dividends are paid and compounded monthly. The dividend period is monthly and
your member number determines the dividend payment date.
b. The minimum amount required to open this account is $10,000.
c. Dividends are calculated by the daily balance method, which applies a daily periodic
rate to the principal in your account each day.
d. Dividends will begin to accrue on the business day funds are deposited to your
account.
XIV. FINANCIAL DISCLOSURE TABLES
Internal Revenue Service regulations require that we set forth a projection of the growth
in value of your account at specified intervals, assuming level annual contributions made
on the first day of the year. This is shown in the tables following, which assumes an annual
contribution of $1,000 to an IRA Share account and to an IRA 3-year Certificate. The amount
shown is the amount that would be available for withdrawal at selected intervals. The
Internal Revenue Service also requires we set forth a projection of the growth of a Rollover
of $1,000 made on the first day of year one, and withdrawn at the end of any of the next
five years, and at the end of the years in which you attain the ages of 60, 65, and 70. Of
course, rates fluctuate from time to time, and nothing herein should suggest these rates be
guaranteed.
NOTE: Beginning Jan 1, 2015, the IRS will only permit one rollover deposit of a distribution
in a 12-month period for all IRA accounts. Any additional rollover deposits will be returned.
This limitation does not apply to Roth conversions or institution transfers.
Page 18M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Form 742 (01/20) © Pentagon Federal Credit Union, 2020
Age of Depositor
Value at age 60 Value at age 65 Value at age 70
18 $ 60,839.42 $ 70,805,94 $ 81,548.19
19 $ 58,934.20 $ 68,752.43 $ 79,334.85
20 $ 57,057.32 $ 66,729.47 $ 77,154.44
21 $ 55,208.38 $ 64,736.62 $ 75,006.47
22 $ 53,386.94 $ 62,773.41 $ 72,890.46
23 $ 51,592.61 $ 60,839.42 $ 70,805.94
24 $ 49,824.97 $ 58,934.20 $ 68,752.43
25 $ 48,083.63 $ 57,057.32 $ 66,729.47
26 $ 46,368.20 $ 55,208.38 $ 64,736.62
27 $ 44,678.30 $ 53,386.94 $ 62,773.41
28 $ 43,013.54 $ 51,592.61 $ 60,839.42
29 $ 41,373.55 $ 49,824.97 $ 58,934.20
30 $ 39,757.96 $ 48,083.63 $ 57,057.32
31 $ 38,166.40 $ 46,368.20 $ 55,208.38
32 $ 36,598.53 $ 44,678.30 $ 53,386.94
33 $ 35,053.99 $ 43,013.54 $ 51,592.61
34 $ 33,532.43 $ 41,373.55 $ 49,824.97
35 $ 32,033.50 $ 39,757.96 $ 48,083.63
36 $ 30,556.88 $ 38,166.40 $ 46,368.20
37 $ 29,102.23 $ 36,598.53 $ 44,678.30
38 $ 27,669.22 $ 35,053.99 $ 43,013.54
39 $ 26,257.54 $ 33,532.43 $ 41,373.55
40 $ 24,866.86 $ 32,033.50 $ 39,757.96
41 $ 23,496.87 $ 30,556.88 $ 38,166.40
42 $ 22,147.26 $ 29,102.23 $ 36,598.53
43 $ 20,817.74 $ 27,669.22 $ 35,053.99
44 $ 19,507.99 $ 26,257.54 $ 33,532.43
45 $ 18,217.74 $ 24,866.86 $ 32,033.50
46 $ 16,946.68 $ 23,496.87 $ 30,556.88
47 $ 15,694.53 $ 22,147.26 $ 29,102.23
48 $ 14,461.01 $ 20,817.74 $ 27,669.22
49 $ 13,245.85 $ 19,507.99 $ 26,257.54
50 $ 12,048.77 $ 18,217.74 $ 24,866.86
51 $ 10,869.50 $ 16,946.68 $ 23,496.87
52 $ 9,707.77 $ 15,694.53 $ 22,147.26
53 $ 8,563.33 $ 14,461.01 $ 20,817.74
54 $ 7,435.92 $ 13,245.85 $ 19,507.99
55 $ 6,325.28 $ 12,048.77 $ 18,217.74
56 $ 5,231.17 $ 10,869.50 $ 16,946.68
57 $ 4,153.33 $ 9,707.77 $ 15,694.53
58 $ 3,091.54 $ 8,563.33 $ 14,461.01
59 $ 2,045.54 $ 7,435.92 $ 13,245.85
60 $ 1,015.10 $ 6,325.28 $ 12,048.77
61 n/a $ 5,231.17 $ 10,869.50
62 n/a $ 4,153.33 $ 9,707.77
63 n/a $ 3,091.54 $ 8,563.33
64 n/a $ 2,045.54 $ 7,435.92
65 n/a $ 1,015.10 $ 6,325.28
66 n/a n/a $ 5,231.17
67 n/a n/a $ 4,153.33
68 n/a n/a $ 3,091.54
69 n/a n/a $ 2,045.54
70 n/a n/a $ 1,015.10
Years Value
1 $ 1,015.10
2 $ 2,045.54
3 $ 3,091.33
4 $ 4,153.33
5 $ 5,231.17
VALUE OF $1,000 DEPOSITED ANNUALLY
in an IRA SHARE ACCOUNT
The information in these tables is based on the following assumptions:
1. Deposits are placed in an IRA Share account earning a dividend
rate of 1.24% per annum (1.24% annual percentage yield).
2. Interest is compounded monthly.
3. Value shown is year-end value, available for withdrawal.
4. Withdrawal is made on the last day of the year.
5. Early-withdrawal penalties not applicable.
Age of Depositor
Value at age 60 Value at age 65 Value at age 70
18 $ 1,905.22 $ 2,053.51 $ 2,213.34
19 $ 1,876.87 $ 2,022.96 $ 2,180.41
20 $ 1,848.95 $ 1,992.86 $ 2,147.97
21 $ 1,821.44 $ 1,963.21 $ 2,116.01
22 $ 1,794.34 $ 1,934.00 $ 2,084.52
23 $ 1,767.64 $ 1,905.22 $ 2,053.51
24 $ 1,741.34 $ 1,876.87 $ 2,022.96
25 $ 1,715.43 $ 1,848.95 $ 1,992.86
26 $ 1,689.90 $ 1,821.44 $ 1,963.21
27 $ 1,664.76 $ 1,794.34 $ 1,934.00
28 $ 1,639.99 $ 1,767.64 $ 1,905.22
29 $ 1,615.59 $ 1,741.34 $ 1,876.87
30 $ 1,591.55 $ 1,715.43 $ 1,848.95
31 $ 1,567.87 $ 1,689.90 $ 1,821.44
32 $ 1,544.54 $ 1,664.76 $ 1,794.34
33 $ 1,521.56 $ 1,639.99 $ 1,767.64
34 $ 1,498.92 $ 1,615.59 $ 1,741.34
35 $ 1,476.62 $ 1,591.55 $ 1,715.43
36 $ 1,454.65 $ 1,567.87 $ 1,689.90
37 $ 1,433.01 $ 1,544.54 $ 1,664.76
38 $ 1,411.69 $ 1,521.56 $ 1,639.99
39 $ 1,390.68 $ 1,498.92 $ 1,615.59
40 $ 1,369.99 $ 1,476.62 $ 1,591.55
41 $ 1,349.61 $ 1,454.65 $ 1,567.87
42 $ 1,329.53 $ 1,433.01 $ 1,544.54
43 $ 1,309.74 $ 1,411.69 $ 1,521.56
44 $ 1,290.26 $ 1,390.68 $ 1,498.92
45 $ 1,271.06 $ 1,369.99 $ 1,476.62
46 $ 1,252.15 $ 1,349.61 $ 1,454.65
47 $ 1,233.52 $ 1,329.53 $ 1,433.01
48 $ 1,215.16 $ 1,309.74 $ 1,411.69
49 $ 1,197.08 $ 1,290.26 $ 1,390.68
50 $ 1,179.27 $ 1,271.06 $ 1,369.99
51 $ 1,161.73 $ 1,252.15 $ 1,349.61
52 $ 1,144.44 $ 1,233.52 $ 1,329.53
53 $1,127.41 $ 1,215.16 $ 1,309.74
54 $ 1,110.64 $ 1,197.08 $ 1,290.26
55 $ 1,094.11 $ 1,179.27 $ 1,271.06
56 $ 1,077.83 $ 1,161.73 $ 1,252.15
57 $ 1,061.80 $ 1,144.44 $ 1,233.52
58 $ 1,046.00 $ 1,127.41 $ 1,215.16
59 $ 1,030.44 $ 1,110.64 $ 1,197.08
60 $ 1,015.10 $ 1,094.11 $ 1,179.27
61 n/a $ 1,077.83 $ 1,161.73
62 n/a $ 1,061.80 $ 1,144.44
63 n/a $ 1,046.00 $ 1,127.41
64 n/a $ 1,030.44 $ 1,110.64
65 n/a $ 1,015.10 $ 1,094.11
66 n/a n/a $ 1,077.83
67 n/a n/a $ 1,061.80
68 n/a n/a $ 1,046.00
69 n/a n/a $ 1,030.44
70 n/a n/a $ 1,015.10
Years Value
1 $ 1,015.10
2 $ 1,030.44
3 $ 1,046.00
4 $ 1,061.80
5 $ 1,077.83
VALUE OF $1,000 ROLLOVER DEPOSITED
in an IRA SHARE ACCOUNT
(Assuming no further deposits are made to the account)
Page 19M-36 (01/20) © Pentagon Federal Credit Union, 2020;
Age of Depositor
Value at age 60 Value at age 65 Value at age 70
18 $ 150,171.65 $ 197,469.63 $ 257,837.17
19 $ 142,019.68 $ 187,065.08 $ 244,557.59
20 $ 134,255.94 $ 177,156.05 $ 231,910.46
21 $ 126,861.96 $ 167,718.94 $ 219,865.66
22 $ 119,820.12 $ 158,731.27 $ 208,394.49
23 $ 113,113.65 $ 150,171.65 $ 197,469.63
24 $ 106,726.58 $ 142,019.68 $ 187,065.08
25 $ 100,643.69 $ 134,255.94 $ 177,156.05
26 $ 94,850.51 $ 126,861.96 $ 167,718.94
27 $ 89,333.22 $ 119,820.12 $ 158,731.27
28 $ 84,078.70 $ 113,113.65 $ 150,171.65
29 $ 79,074.43 $ 106,726.58 $ 142,019.68
30 $ 74,308.48 $ 100,643.69 $ 134,255.94
31 $ 69,769.52 $ 94,850.51 $ 126,861.96
32 $ 65,446.72 $ 89,333.22 $ 119,820.12
33 $ 61,329.80 $ 84,078.70 $ 113,113.65
34 $ 57,408.95 $ 79,074.43 $ 106,726.58
35 $ 53,674.83 $ 74,308.48 $ 100,643.69
36 $ 50,118.55 $ 69,769.52 $ 94,850.51
37 $ 46,731.64 $ 65,446.72 $ 89,333.22
38 $ 43,506.03 $ 61,329.80 $ 84,078.70
39 $ 40,434.04 $ 57,408.95 $ 79,074.43
40 $ 37,508.36 $ 53,674.83 $ 74,308.48
41 $ 34,722.01 $ 50,118.55 $ 69,769.52
42 $ 32,068.37 $ 46,731.64 $ 65,446.72
43 $ 29,541.10 $ 43,506.03 $ 61,329.80
44 $ 27,134.20 $ 40,434.04 $ 57,408.95
45 $ 24,841.92 $ 37,508.36 $ 53,674.83
46 $ 22,658.82 $ 34,722.01 $ 50,118.55
47 $ 20,579.68 $ 32,068.37 $ 46,731.64
48 $ 18,599.57 $ 29,541.10 $ 43,506.03
49 $ 16,713.76 $ 27,134.20 $ 40,434.04
50 $ 14,917.76 $ 24,841.92 $ 37,508.36
51 $ 13,207.30 $ 22,658.82 $ 34,722.01
52 $ 11,578.30 $ 20,579.68 $ 32,068.37
53 $10,026.88 $ 18,599.57 $ 29,541.10
54 $ 8,549.34 $ 16,713.76 $ 27,134.20
55 $ 7,142.18 $ 14,917.76 $ 24,841.92
56 $ 5,802.03 $ 13,207.30 $ 22,658.82
57 $ 4,525.71 $ 11,578.30 $ 20,579.68
58 $ 3,310.17 $ 10,026.88 $ 18,599.57
59 $ 2,152.52 $ 8,549.34 $ 16,713.76
60 $ 1,050.01 $ 7,142.18 $ 14,917.76
61 n/a $ 5,802.03 $ 13,207.30
62 n/a $ 4,525.71 $ 11,578.30
63 n/a $ 3,310.17 $ 10,026.88
64 n/a $ 2,152.52 $ 8,549.34
65 n/a $ 1,050.01 $ 7,142.18
66 n/a n/a $ 5,802.03
67 n/a n/a $ 4,525.71
68 n/a n/a $ 3,310.17
69 n/a n/a $ 2,152.52
70
n/a n/a $ 1,050.01
Years Value
1 $ 1,056.75
2 $ 2,173.46
3 $ 3,353.55
4 $ 4,600.60
5 $ 5,918.42
VALUE OF $1,000 DEPOSITED ANNUALLY
in an IRA 5-YEAR CERTIFICATE
The information in these tables is based on the following assumptions:
1. Deposits are placed in an IRA 5-year Certificate earning a
dividend rate of 4.88% per annum (5% annual percentage yield).
2. Interest is compounded daily on a 365/365 day basis.
3. Value shown is year-end value, available for withdrawal.
Age of Depositor
Value at age 60 Value at age 65 Value at age 70
18 $ 8,151.97 $ 10,404.55 $ 13,279.57
19 $ 7,763.73 $ 9,909.03 $ 12,647.13
20 $ 7,393.98 $ 9,437.11 $ 12,044.81
21 $ 7,041.84 $ 8,987.67 $ 11,471.17
22 $ 6,706.47 $ 8,559.63 $ 10,924.85
23 $ 6,387.07 $ 8,151.97 $ 10,404.55
24 $ 6,082.89 $ 7,763.73 $ 9,909.03
25 $ 5,793.19 $ 7,393.98 $ 9,437.11
26 $ 5,517.28 $ 7,041.84 $ 8,987.67
27 $ 5,254.52 $ 6,706.47 $ 8,559.63
28 $ 5,004.27 $ 6,387.07 $ 8,151.97
29 $ 4,765.94 $ 6,082.89 $ 7,763.73
30 $ 4,538.96 $ 5,793.19 $ 7,393.98
31 $ 4,322.79 $ 5,517.28 $ 7,041.84
32 $ 4,116.92 $ 5,254.52 $ 6,706.47
33 $ 3,920.85 $ 5,004.27 $ 6,387.07
34 $ 3,734.12 $ 4,765.94 $ 6,082.89
35 $ 3,556.28 $ 4,538.96 $ 5,793.19
36 $ 3,386.91 $ 4,322.79 $ 5,517.28
37 $ 3,225.61 $ 4,116.92 $ 5,254.52
38 $ 3,071.99 $ 3,920.85 $ 5,004.27
39 $ 2,925.68 $ 3,734.12 $ 4,765.94
40 $ 2,786.35 $ 3,556.28 $ 4,538.96
41 $ 2,653.65 $ 3,386.91 $ 4,322.79
42 $ 2,527.27 $ 3,225.61 $ 4,116.92
43 $ 2,406.90 $ 3,071.99 $ 3,920.85
44 $ 2,292.27 $ 2,925.68 $ 3,734.12
45 $ 2,183.10 $ 2,786.35 $ 3,556.28
46 $ 2,079.13 $ 2,653.65 $ 3,386.91
47 $ 1,980.11 $ 2,527.27 $ 3,225.61
48 $ 1,885.81 $ 2,406.90 $ 3,071.99
49 $ 1,796.00 $ 2,292.27 $ 2,925.68
50 $ 1,710.46 $ 2,183.10 $ 2,786.35
51 $ 1,629.00 $ 2,079.13 $ 2,653.65
52 $ 1,551.42 $ 1,980.11 $ 2,527.27
53 $ 1,477.53 $ 1,885.81 $ 2,406.90
54 $ 1,407.17 $ 1,796.00 $ 2,292.27
55 $ 1,340.15 $ 1,710.46 $ 2,183.10
56 $ 1,276.32 $ 1,629.00 $ 2,079.13
57 $ 1,215.54 $ 1,551.42 $ 1,980.11
58 $ 1,157.65 $ 1,477.53 $ 1,885.81
59 $ 1,102.51 $ 1,407.17 $ 1,796.00
60 $ 1,050.01 $ 1,340.15 $ 1,710.46
61 n/a $ 1,276.32 $ 1,629.00
62 n/a $ 1,215.54 $ 1,551.42
63 n/a $ 3,310.17 $ 1,477.53
64 n/a $ 2,152.52 $ 1,407.17
65 n/a $ 1,050.01 $ 1,340.15
66 n/a n/a $ 1,276.32
67 n/a n/a $ 1,215.54
68 n/a n/a $ 1,157.65
69 n/a n/a $ 1,102.51
70 n/a n/a $ 1,050.01
Years Value
1 $ 1,015.10
2 $ 1,030.44
3 $ 1,046.00
4 $ 1,061.80
5 $ 1,077.83
VALUE OF $1,000 ROLLOVER DEPOSITED
in an IRA 5-YEAR CERTIFICATE
(Assuming no further deposits are made to the account)
Form 742 (01/20) © Pentagon Federal Credit Union, 2020
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INDIVIDUAL RETIREMENT ARRANGEMENT (IRA)

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Completed 8 March 2022

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