IRA

Getting the right retirement plan to fit you and your goals takes planning and preparation. With some help from an IRA from TFCU, you can set yourself up for success!

See how much you should be saving in order to enjoy the standard of living you want with our free retirement calculator!

What is an IRA?

An Individual Retirement Account or an IRA is a personal retirement plan where your earned income is contributed into an IRA account regardless if you participate in an employer's retirement plan or 401(K).

There are two types of IRAs: a Traditional and a Roth. Though the eligibility requirements differ, both offer flexibility, accessibility, and valuable tax benefits.

You'll be earning more with one of the highest returns in the city! The higher the dividend yield, the more money you will earn on your long-term retirement funds.

TFCU IRA Rate

*APY = Annual Percentage Yield. $1.00 minimum to open.

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Which IRA is right for you?

A Traditional IRA is tax-deductible. If you qualify, you may be able to deduct your contributions on your federal income tax return, which can lower how much you will need to pay. You can contribute money before it's taxed, and you don't owe taxes on those contributions or your earnings until you withdraw the money. You will likely earn less when you begin to withdraw from your IRA, which means that you may end up being in a lower tax bracket and paying less overall in taxes.

To qualify for a Traditional IRA:

  1. If you earn compensation
  2. File a joint tax return with a spouse who earns compensation

A Roth IRA is not tax-deductible. However, any earnings are tax-deferred, which means that you do not pay tax on the earnings until you withdraw them. You can withdraw Roth IRA contributions at any time, tax and penalty free. You are never required to take money out of your Roth IRA, regardless of age.

To qualify for a Roth IRA:

  1. If you earn compensation
  2. File a joint tax return with a spouse who earns compensation
  3. Contribution limits are based on your modified adjusted gross income (MAGI)

Quick Compare

IRA Basics Traditional IRA Roth IRA
Contributions Up to $6,000 per year. Up to $7,000 for age 50 and older. Up to $6,000 per year. Up to $7,000 for age 50 and older.
Subject to modified adjusted gross income limits.
Contribution age limit Age 70 ½; Effective January 2020 - No age limit None
Taxation Earnings taxed at withdrawal. Contributions may be tax deductible, check with a tax advisor. Contributions subject to taxation. Earnings grow tax-free.
Withdrawals Optional beginning at age 59 ½. Mandatory at age 70 ½. Effective January 2020 at age 72. Optional beginning at age 59 ½. No mandatory withdrawal age.
Early withdrawal You may withdraw money from either type of IRA at any time, subject to federal income tax. If you are under age 59 ½, you will also be subject to a 10 percent early distribution penalty tax on any taxable amount taken, unless you qualify for a penalty exception. Consult a tax advisor for details.

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Jump Start Retirement Hub

Take control of your retirement! Now it's even easier to manage your IRA account with our Jump Start Retirement Hub - a portal designed with you in mind to make it easier to make contributions, request distributions, or simply learn more about planning and saving for retirement.

Visit the Jump Start Retirement Hub today to get started!