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  4. Which Banks Or Cus Allow At Least Partial EWP-free*ROTH* IRA CD Withdrawals At Retirement Age??

Which Banks Or Cus Allow At Least Partial EWP-free*ROTH* IRA CD Withdrawals At Retirement Age??

denki
  |     |   158 posts since 2019

If you're retirement age and have a Traditional IRA CD, the typical EWP is waived for your yearly RMD at retirement age.

But if the funds are in a *ROTH* IRA CD (which has no RMD requirement), most places still charge their normal early withdrawal penalty if you take the funds out early, even at retirement age.

However recently I came across at least one credit union that allowed people to take out 20% EWP-free from a Roth IRA CD once you hit 59.5 years old -- but I can't remember which Credit Union it was!

Does anyone know of any credit unions or banks that have a similar policy? That will let you withdraw at least part of your funds early without penalty in a *ROTH* IRA CD once you hit 59.5? I know there's at least one, because I saw it recently on their website, but for the life of me can't remember which credit union it was.

If you know of any, please post here. Thanks!

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4


Answers
SouthernGirl
  |     |   210 posts since 2022
denki,
GTE Financial in Tampa FL has allowed 10% and 20% EWP-free on an IRA in the past. PenFed Credit Union and Northwest Federal Credit Union, may not have any EWP after age 59 1/2. Please verify.
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4
denki
  |     |   158 posts since 2019
SouthernGirl,
GTE! That was the one, thank you!

GTE: "Access up to 10% of the principal plus dividends once a year, or 20% of the current balance if you are over 59½ years old, with no dividend penalty"
(https://www.gtefinancial.org/products/ira-share-certificates)
Though of course GTE likes fees--$50/each occurance for outgoing IRA transfers...

I also tried calling both PenFed and NWFCU and got very confused, inaccurate answers by general CSRs after hours but will call back next week to speak to the IRA Depts at both places to find out.

PenFed: On PenFed's (General) IRA CD page it says:
"No Early Withdrawal Penalties on Principal. If you need to withdraw the money before you expect, you won’t lose any of the principal."
So EWP won't eat into the principal... but implies there will be an EWP that will eat away at any interest earned during the term...
(https://www.penfed.org/accounts/traditional-ira-certificates)

Anyone know of any other banks or CUs that will partially or fully waive the EWP for ROTH CDs if you're over 59.5?
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2
SouthernGirl
  |     |   210 posts since 2022
denk,
Possibly on Pen-Fed, you can receive interest (dividends) monthly, which will be a distribution and there should be no EWP, if you withdraw principal on the 2nd of the month.  I would consider all institutions with the highest interest rate, for the longest term, and no loss of principal. i.e. Navy Federal, Nasa Federal, etc. 
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2
denki
  |     |   158 posts since 2019
Here's some more info and answers (GTE's 10%/20% policy was mentioned in my previous post).

PenFed: For a ROTH CD, you will indeed be charged quite a harsh EWP, even if over 59.5. It will never eat into the principal at least, but is quite harsh (30% of what you would have earned in interest over the entire term not just up to the point you take it out early).

NavyFed: Confirmed that they DO charge their standard EWP for Roth CDs even over age 59.5 -- the same as if it were a non-IRA CD. CSR said it won't eat into the principal, but you will lose the same interest as if it were a non-IRA CD. NavyFed does let you add to existing IRA CDs (Trad or Roth) basically mid-Jan to mid-April of each year, which is nice. And sometimes they run specials. But their EWP is the same for a ROTH CD as for a non-IRA CD.

NWFCU: The only one apparently, that will let you take out early without any EWP on a Roth CD if you're over 59.5, at least according to the CSR I spoke to. However NWFCU's rates are... shall we say virtually 0% right now, across all time spans, even in this high-rate environment. While other places are currently 3.5%-4.5%+, they are running only one short-term special at around 3.6%, otherwise ALL the rest of their CDs are around 0.5% or less (even the 5 year ones). So I suppose if NWFCU is running a special at the right time it'll be worth it, otherwise...
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