Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) offers most members savings on taxes while saving for retirement. The main attraction of an IRA is that it lets you put off paying taxes on some income until you withdraw it after retirement when your tax rate may be lower. Whether your income and present retirement plan qualifies you for a full or partial IRA is an individual question. Ask about the possibilities when you call or visit the Credit Union. You can be sure of getting competitive dividend rates and the convenience of payroll deduction (Direct Deposit). We offer a full range of IRA options to choose from:
- Traditional IRA - This is the best IRA for long term retirement planning.You don't pay taxes on these retirement accounts now, when your income is high. At retirement, you are able to take out your funds or roll them over into another option. Taxes paid then are usually less, since your income may be lower.
- Roth IRA - If you will need your money sooner than retirement, consider the Roth IRA. Savings for a down payment on a house or other expenditure will add up to more with the higher interest paid on a Roth IRA. While you will have to pay taxes on the funds now, you will be saved those taxes when you use the money, and you do not incur any penalties for withdrawal of deposited money after 5 years.
- Coverdell Education Savings Account - Parents, grandparents, relatives, friends, and even minors (with earned income) can set up an account for any designated beneficiary under age 18. You can make nondeductible contributions of up to $2,000 per child each tax year. The accumulation of interest and withdrawals are tax-free as long as the funds are used for financing Elementary, Secondary and Post-secondary education expenses. The contributions to this account do not count toward your IRA contributions, so you can save for a child’s education and maximize your own IRA every tax year.