If you haven't started thinking about retirement, today is the perfect time to start. IRAs through US Community Credit Union are a great tool to put you on the right track to meet your retirement goals. If you’re currently a “High Earner”, a Traditional IRA might be right for you. With a Traditional IRA, you pay taxes in your retirement years, when your tax rate will probably be lower.
Traditional IRA Benefits:
- Contributions may be tax deductible in the year the contributions are made.
- Taxes due on the earned interest are deferred until funds are withdrawn.
- Mandatory withdrawals at age 70½.
- Withdrawals can begin at age 59½.
US Community Credit Union offers several IRA options to fit your specific needs including the Traditional IRA mentioned above and Roth IRAs. Roth IRAs are a great option for individuals early in their career. Most of the time, people early in their careers are in a lower tax bracket, so paying taxes on a Roth IRA cost less. So when retirement knocks on the door, you won’t be paying any taxes on withdrawals.
Roth IRA Benefits:
- Contributions are post-tax, and growth may be tax-free.
- Since withdrawals are not reportable income, they won't affect your adjusted gross income during retirement.
- Contributions can be made after age 70½, and no withdrawals are required during the accountholder's life.
- Withdrawals from a Roth IRA are tax- and penalty-free as long as the account has been open for at least five tax years and you are either over 59 1/2, disabled or buying a first home.
Coverdell Savings Accounts
We realize you want what's best for your children, and gaining a quality education is high on that list. That's why we offer a tax advantaged way to save for those upcoming educational costs.
Coverdell Savings Account Benefits:
- Gives flexibility to families saving for college tuition and other related expenses.
- Up to $2,000 per year may be deposited for each child under age 18.
- Anyone can make a contribution - parents, grandparents, relatives, or friends
- Earnings and withdrawals are tax free if used for educational expense by age 30
- Can be transferred to another child in family
- 10% penalty if used for another purpose
- These contributions are not tax deductible, but dividends earned are tax free.