IRA savings Account
Looking for Retirement Planning Solutions? As Northeast Ohio’s Trusted Credit Union, We Can Explain How IRAs Work – and How They Can Work for You!
If you’re confused by the choices available for retirement planning, you’re not alone. Retirement planning accounts can be employer-supported, such as a 401(k), or available to individual investors like Individual Retirement Accounts (IRAs). IRAs provide an opportunity to invest in your retirement with tax benefits, and depending on the type of IRA you choose (Traditional or Roth), you can enjoy tax advantages in different ways. At FFCCU, we can guide you through your options and help you find the best IRA account to suit your needs. With just $50, you can open a Traditional or Roth IRA with us, and enjoy the benefits of no maintenance fees**, monthly dividends, and the flexibility to make contributions in lump sums or through regular deposits throughout the year. Investing in an IRA is a tax-advantaged way to grow your retirement funds, and we can help make it simple and easy for you.
Traditional IRAs vs Roth IRAs:
What is the best IRA account for you
If you’re looking to save money for retirement, you may already be familiar with employer-sponsored 401(k) plans or other retirement plans, which are designed to help you either defer taxes or pay lower taxes later in life. These types of accounts encourage people to start saving for their Golden Years in ways that create the most financial benefit. So, how should IRAs fit into your overall retirement-saving plan? In most cases, both Traditional IRAs and Roth IRAs offer great tax-savings benefits. However, the amount you’re allowed to contribute is relatively low compared to other retirement savings plans. When investing in an IRA, consider these rules, limits and requirements – before deciding which type of investment is best for you.
Traditional IRA
With a traditional IRA, there are no maximum income limits to open the account, only a $50 minimum balance, and no minimum contribution requirements. Contributions can be tax deductible and taxes are not imposed on earnings until they are withdrawn.
You can begin making withdrawals at age 59 ½, and withdrawals are mandatory beginning at age 73. On the flip side, traditional IRAs are also subject to an early withdrawal penalty.
Roth IRA
A Roth IRA features tax-free withdrawals for certain distribution reasons after a 5-year holding period. Since Roth IRA contributions are non-deductible and taxed in the year they are earned, members who expect to be in a higher tax bracket when they retire may benefit more from a Roth IRA than from a Traditional IRA.
Unlike the traditional IRA, there is no requirement to begin taking distributions at age 72. However, there are income limitations for eligibility for a Roth IRA.
| | |
| The Basics | |
| With Traditional IRAs, you defer paying taxes on your earnings until you start taking distributions. Certain contributions are also tax-deductible in the year they are made. Please consult with your tax advisor for details. | With a Roth IRA, you can make non-deductible contributions that are taxed within the year they are earned rather than when they are withdrawn. Roth IRAs allow you to take tax-free distributions including earnings once you’ve reached age 59 ½ and had the account for at least five years. Other distribution exceptions may apply. Please consult with your tax advisor for full details. |
| Income requirements (2024 rules) | |
| Must have earned income to be eligible (or your spouse if filing jointly). | Your modified adjusted gross income (MAGI) must be within certain limits. |
| Contribution limits (2024 rules) | |
| You can now contribute at any age. $8,000 if you are 50 or older $7,000 for all others Total combined contribution cannot exceed the maximum contribution** (plus the catch-up amount if you are age 50 or older) | You can contribute at any age if you (or your spouse if filing jointly) have taxable compensation and your modified adjusted gross income is below certain amounts. Total combined contribution cannot exceed the maximum contribution** (plus the catch-up amount if you are age 50 or older) |
| Withdrawal rules (as of 2024) | |
| Withdraw funds any time after age 59 ½ without incurring the 10 percent premature-IRS distribution tax. Required minimum distribution (RMD) rules apply, depending on when you were born. | Qualified contributions may be withdrawn without IRS penalty. You can withdraw earnings after you reach age 59½. |
| Tax considerations | |
| Your contributions to an IRA will reduce your current taxable income. Once you withdraw money, the money will be taxed based on your current tax rate. | Contributions are made with after-tax dollars, so they cannot be deducted on your tax returns. |
| Why to consider it | |
| If you know that you’ll stop earning regular income by age 73, your tax rate will be much lower. If you want to diversify your retirement savings accounts. | If you’re not concerned about reducing your current taxable income. If your current tax rate isn’t very high, and you don’t expect it to be lower in retirement. To lower your tax liability taxes (on at least some of your money) during retirement. |
| The Bottom Line: Why we recommend it | |
| Reduces your current taxable income today. When you do pay taxes on the money, you’ll likely be retired and earning less than you do now. This assumes your tax rate lower. Competitive rates. | By saving the money in a Roth IRA, you benefit from tax-free earnings and withdrawals after you retire. Competitive rates. |
Competitive IRA Rates
| Account Type | Minimum Balance | APY* |
|---|---|---|
| Traditional IRA | $50+ | 0.30% |
| Roth IRA | $50+ | 0.30% |
*APY = Annual Percentage Yield. This rate schedule states rates applicable to specified accounts. Dividends are credited to your account and compounded every month. Minimum balance requirements apply to average daily balance. Call 800.621.4644 for current rates as they are subject to change at any time and without notice. Click here to view full rate disclosures and policies. **IRA Transfer/Rollover out or Close IRA (within six months) fee is $25.00.
Take Advantage of These Credit Union IRA Benefits
When you open an IRA with FFCCU, we help you maximize the benefits of this savings vehicle. Ask us more about these advantages!
Tax savings
Whether you choose to open a Traditional or Roth IRA, there are tax benefits. We can take you through all the options to help you decide which is best for your needs and growth.
No setup or maintenance fees!*
Because we’re a credit union – and not a brokerage firm — we don’t charge you to open an IRA savings account, and there are never any hidden maintenance or service fees.
*Fees apply for Transfer/Rollover out and for Closing (within six months). Contact the credit union for current fee information.
Savings choices
Traditional and Roth IRA certificates are also available with a minimum deposit of $500 in terms of 6, 12, 18, 24, 36, 48, and 60 months.
Great IRA rates
As a credit union, we always look for ways to help our members maximize their investments. That’s why we always aim towards a good and stable rate of return for our customers.
Open an IRA Savings Account with Us Today
Opening a Traditional or Roth IRA with FFCCU is easy. There’s nothing to manage, deposits can be set up to automatically transfer into your account, and you can view your account details easily through FFCCU’s convenient online banking portal. Plus, there’s no application fee, approval process or maintenance fees**.
To open an IRA Savings Account with us today, please keep in mind the following steps:
IN-PERSON VISIT:
The process must be done in person since certain documentation is required.
KNOW YOUR IRA TYPE:
You’ll need to be clear about whether you want a Traditional or Roth IRA. Unfortunately, we cannot offer recommendations or guidance on this matter.
MINIMUM BALANCES:
To get started, you’ll need a minimum balance of $50 for a savings account or $500 if you’re interested in a certificate.
We’re here to make the process as straightforward as possible for you, so feel free to visit us in person with the necessary documents and knowledge of your IRA preference.
Investments Backed by ASI
FFCCU is proud to be an American Share Insurance (ASI) credit union. Founded in 1974, ASI is the nation’s largest provider of private share insurance. Currently, over 1.2 million members belong to credit unions insured by ASI, creating strength in numbers. This means your IRA savings account is fully insured up to $250,000 per depositor and backed by ASI protection. It’s a level of protection and safety you often won’t find with a traditional bank.
SERVING OHIO SINCE 1936
We know Ohio because we live and work here too. We’ve been helping our customers with their community credit union needs since 1936. Wherever you live in Northeast Ohio, we can help:
- Cuyahoga
- Geauga
- Lake
- Lorain
- Medina
- Portage
- Summit
FAQs
The amount typically changes annually. Please consult with your tax advisor for details.
It depends on your earnings and the current IRA rules, which typically change annually. Please consult with your tax advisor for details.
If you are a self-employed individual, contributing to an IRA can be a smart savings option for your retirement. It’s essential to consider how much you should put into your IRA per month to reach your savings goals. Maximizing your contribution, as suggested, is an excellent starting point for many people. However, as a self-employed individual, you should also evaluate your cash flow and budget to determine if you can afford to contribute more. Remember that the contribution limits for IRAs are the same for all taxpayers, including self-employed individuals. So, whether you are employed or self-employed, it’s crucial to maximize your IRA contributions to ensure a comfortable retirement.
*APY = Annual Percentage Yield. This rate schedule states rates applicable to specified accounts. Dividends are credited to your account and compounded every month. Minimum balance requirements apply to average daily balance. Call 800.621.4644 for current rates as they are subject to change at any time and without notice. Click here to view full rate disclosures and policies.
**IRA Transfer/Rollover out or Close IRA (within six months) fee is $25.00.
