Individual Retirement Accounts

An Individual Retirement Account (IRA) is an excellent tool for our members to consider as part of their retirement plan. Unlike most investments, depending on the type of IRA you choose, contributions may be tax deductible and interest and dividend earnings grow tax-free. IRAs can be funded with rollovers from other IRAs and retirement plans, direct contributions, or both. Keep in mind, IRAs are intended for long term investing, so there are some restrictions on using funds prior to retirement. 

There are two types of IRAs to compare for you to make the best decision for your personal retirement savings:

TRADITIONAL IRA ROTH IRA

Total contributions cannot exceed $6,000 for 2022 and $6,500 for 2023. Individuals age 50 and older may contribute an additional $1,000.

Total contributions cannot exceed $6,000 for 2022 and $6,500 for 2023. Individuals age 50 and older may contribute an additional $1,000.

Earned income must be greater or equal to contribution amount

Earned income must be greater or equal to contribution amount

Contribution is tax deductible if individual meets certain IRS qualifications

Contributions are not tax deductible

Earnings grow tax-deferred and are taxed as ordinary income upon withdrawal

Earnings and withdrawals are tax-free when certain requirements are met

 

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*The Credit Union provides no legal advice to members, and provides the foregoing information from a reliable resource to give our members a basic understanding of these services. You should consult with your tax or legal advisor regarding any particulars and the current status of applicable federal and state laws.