Individual Retirement Accounts
An IRA is an Individual Retirement Account which provides either a tax-deferred or tax-free way of saving for retirement. We offer both Traditional IRAs & Roth IRAs to members who are U.S. citizens. Invest in an IRA to build your savings and get the tax benefits.
What is the difference between Traditional and Roth IRAs?
The individual retirement account is a personal, tax-deferred account for people who are employed, and their spouses. Your eligibility will depend on your income among other factors. A traditional IRA allows tax-deductible contributions of up to $5,500 per year, or more if you are over age 50. Whatever you contribute towards your IRA comes off your yearly taxable income, thereby reducing total tax liability. However, when the money in an IRA is withdrawn, it is subject to standard income taxes and an additional 10% penalty if withdrawn before the age of 59 1/2.
Traditional IRAs require you to begin taking your money out once you reach age 70 1/2. When the individual begins to receive distributions from a Traditional IRA, the income is treated as ordinary income and may be subjected to income tax.
Contribution limit: $5,500 in each tax year ($6,500 if you are 50 or older).
These IRAs provide even greater flexibility than traditional IRAs. Contributions are made with income you have been taxed on yet you can earn tax free interest depending on when withdrawals are made.
After five years, both contributions and earnings in the account can be withdrawn without penalty or taxation.
A Roth IRA isn't for everyone; you may be able to contribute to a Roth IRA for yourself or your spouse if you have earned income. Your eligibility will depend on your income among other factors.
Once you reach age 59½, you may qualify for tax-free withdrawals of both contributions and any accumulated earnings. Unlike traditional IRAs, Roth IRAs don't require you to take distributions at age 70 1/2, and you can keep contributing to them as long as you like as long as you have earned income, making a Roth IRA an effective option for both retirement and estate planning purposes. Contribution limit: $5,500 in each tax year ($6,500 if you are 50 or older).
The most common way of growing IRAs is to set up automatic payroll deductions at an amount that you can maintain. Contact us for details!