Traditional IRAs are more attractive than ever because expanded income limits mean more people will be able to make tax-deductible contributions. In addition, penalty-free withdrawals are allowed for qualified higher education expenses and for a first-time home purchase.
There are two choices when opening an IRA; read on to discover which is right for you.
- Traditional IRA - Current Rates
This type of IRA allows you to make investments that will grow tax-deferred until you remove money from your account. Your contributions to a Traditional IRA may be tax-deductible depending on your participation in a workplace retirement plan and certain income limitations. Catch up contributions may be made by some individuals.
- Roth IRA - Current Rates
A Roth IRA allows you to invest money by making nondeductible after-tax contributions that grow tax-deferred. The key difference between a Roth IRA and a Traditional IRA is that, in a Roth IRA, money is not taxed when withdrawn for qualified distributions and there is no age limit on making contributions.
Contributions to the Roth IRA or Coverdell ESA aren't tax deductible, but the accounts offer the opportunity for tax-free earnings.
Although there are income limitations, you may receive greater tax savings and more distribution flexibility with a Roth IRA than with a Traditional IRA. It may be a solution when looking for tax savings in the future, rather than today.
Your tax adviser can offer more guidance on which type of IRA may be best for your needs. Of course, we are always here to answer your questions and assist you with opening an IRA.
Use the following resources when considering your retirement options:
Which is better for me, a Traditional IRA or a Roth IRA?
How much will my Traditional IRA be worth at retirement?
How much will my Roth IRA be worth at retirement?
How much do I need to fund my retirement?
Our IRAs offer:
- Low minimum balance $300 requirement
- Insured by the NCUA up to $250,000 and separate from other accounts*
- Earnings grow tax-deferred until withdrawn**
- May be used for first time home purchase or education**
- IRAs can be established as Share Certificates to take advantage of higher yields
* Traditional and Roth IRAs at one credit union are insured in the aggregate to $250,000, and separate and apart from insurance on other credit union accounts. Retirement account insurance protection applies to credit union accounts, not investments.
** Consult your tax advisor who can evaluate your individual situation with regard to IRAs.
Current Savings Rates
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For more information on IRAs, please call us at (800) 334-8788.