Individual Retirement Accounts (IRAs)
Individual Retirement Accounts (IRAs)
Individual Retirement Accounts (IRAs) are tax-advantaged savings programs that allow you to begin saving for your retirement, whether you are starting your first job or you are nearing the end of your professional career.
Did You Know?
On March 17, 2021, the IRS extended the 2020 federal income tax-filing deadline to May 17, 2021. The extension until May 17th has also been granted to 2020 prior year contributions to a Traditional or Roth IRA.
It’s never too early to start planning for your future. USSFCU can help you devise a savings strategy that best serves your retirement goals. USSFCU offers both Traditional and Roth IRAs, each of which has its own distinct tax advantages. Call us today to find an IRA savings strategy that works best for you.
Retirement Central
Understand, plan and execute your Retirement Savings Plan all from one central location!
Retirement Central is an excellent resource for any stage of retirement planning. Learn about different types of IRAs, determine your eligibility to contribute, open accounts and perform transactions. Retirement calculators and other tools are available to simplify the process.
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Planning Tools
Informed planning is one of the cornerstones of an effective retirement strategy.
On the retirement planning workbench below, you'll find a wide-variety of planning tools covering numerous aspects of retirement planning, from selecting the best type of IRA to designing a retirement income strategy that best fits your personal objectives.
Each planning tool includes a thorough introduction of the tool's purpose as well as a summary of the financial information you'll need to have available when using the tool. As you begin using your planning tools, be sure to check out the links on the right-hand side of your screen for specific recommendations on related information and tools that may also be helpful.
Life Stages
We all dream of the perfect retirement. As often as not, however, it seems like everyday life gets in the way of planning for the perfect retirement. Although it may be hard to believe at times, everyday life is the raw material from which we are given the opportunity to create building blocks for a better future.
Whether you're just starting a career, or already in retirement, the decisions you make today will help to shape your future. In this section, you have the opportunity to explore some of the key topics you should consider at various life stages to help ensure a successful retirement.
Got questions?
If so, you've come to the right place. Within this section of Retirement Central, you'll find answers to the most commonly asked retirement planning questions.
Deciding which retirement savings options are best for you and your family? Give us a call or visit one of our convenient branches. For more info, click on the button below.
Details
USSFCU offers both Traditional IRAs and Roth IRAs to help its members save for retirement. Either may be opened as a savings account or a term certificate. Despite some different characteristics detailed in the comparison below, both Traditional and Roth IRAs at USSFCU share the following common elements:
- Competitive dividend rates above standard savings rates
- No set up fees or monthly/annual maintenance fees
- A very low $5 minimum balance
- The ability to purchase Share Certificate(s) with IRA funds
- A $6,000 per year contribution limit1 2020 and 2021 contribution limit
- Additional $1,000 “catch-up” contributions allowed for members ages 50 and above
Which approach is best for you? Traditional, Roth, or both? Give us a call and we’ll help you chart the best course for you and your family!
1 Annual contribution amount may change.
Traditional vs. Roth
The main difference between Traditional and Roth IRAs, both of which are tax-advantaged retirement savings tools, is how these accounts are treated by the tax code.
A Traditional IRA from USSFCU may accept contributions of pre-tax or after-tax dollars and the dividends grow tax-deferred. When you make withdrawals after age 59½, they are treated as current income. In addition, contributions are potentially tax deductible depending on your filing status and income.
A Roth IRA from USSFCU is funded only with after-tax income. Therefore, contributory funds may be withdrawn at any time without tax penalties. When members make qualified withdrawals from their Roth IRAs after age 59½, earnings are not taxed.
Aside from these fundamental differences, Roth IRAs and Traditional IRAs also differ in a few other ways, which are described below.
Traditional IRAs
- Anyone under age 72 with earned income may open a Traditional IRA
- Contributions are deductible from state and federal tax*
- Earnings are tax deferred until withdrawal
- Withdrawals may begin at age 59½ and are mandatory at age 72 when members are often in a lower tax bracket
- Early withdrawals are subject to penalty**
Roth IRAs
- No age limits for eligibility
- Eligibility is subject to income limits based on filing status
- Contributions are NOT tax deductible
- No penalty for early withdrawal of contributory funds
- Early withdrawals on earnings subject to penalty**
- Earnings are 100% tax free on qualified distributions
- No mandatory distribution age
*Subject to some minimal conditions. Consult a tax advisor.
**Certain exceptions apply, such as qualifying higher education expenses, first time home purchases, etc.
Legislative Update
The Traditional and Roth Contribution Limits are the same for 2020 and 2021:
Total contributions to all of an individual’s Traditional and Roth IRAs may not be more than:
- $6,000 ($7,000 if you're age 50 or older),
- Or your taxable compensation for the year, if your compensation was less than this dollar limit.
2020 IRA Contribution Deadline:
- On March 17, 2021, the IRS extended the 2020 federal income tax-filing deadline to May 17, 2021. The extension until May 17th has also been granted to 2020 prior year contributions to a Traditional or Roth IRA.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act:
- Raised the age at which individuals must begin taking RMDs from their retirement accounts to 72.
- Allows taxpayers with earned income to make Traditional IRA contributions at any age.
How Does Share Insurance Work?
Deposits at all federal credit unions and the vast majority of state-chartered credit unions are covered by National Credit Union Share Insurance Fund (NCUSIF) protection. Not one penny of insured savings has ever been lost by a member of a federally insured credit union.
Federally insured credit unions offer a safe place for you to save your money, with deposits insured up to at least $250,000 per individual depositor. The National Credit Union Administration (NCUA) is the independent agency that administers the NCUSIF. Like the FDIC's Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government.
For questions about the NCUA’s share insurance coverage, call 1.800.755.1030, option 1, Monday through Friday, 8 a.m. to 5 p.m. Eastern, or send an email to [email protected]. This toolkit contains a variety of helpful resources for credit unions regarding the Share Insurance Fund.
Share Insurance Toolkit from MyCreditUnion.gov
The toolkit has great resources like estimators, publications, videos and more.