Individual Retirement Accounts (IRAs) have recently become more popular due to changes in the rules and regulations governing these accounts. CCU offers a variety of IRA plans including:

 

TRADITIONAL IRA - A traditional IRA is an account that allows you to defer taxes on your earnings until you withdraw the funds. Based on your personal tax situation, you may receive a tax deduction for this type of deposit. You must start withdrawing funds when you reach age 70 1/2.

 

ROTH IRA - This new type of IRA is gaining popularity because the account allows all earnings to grow tax-free and there is no age requirement for withdrawals. Although this particular IRA is not tax deductible, it does offer some advantages over a Traditional IRA. One of the benefits for some is the provision for "qualified distributions." A qualified distribution from a Roth IRA is allowed if the account has been open for at least 5 years and you are either older than 59 1/2, disabled, or a first-time home buyer ($10,000 lifetime withdrawal limit). Another benefit of the Roth IRA is that there is no required distribution, so if you don't need the money, you do not have to take any withdrawals from the account.

 

EDUCATION IRA - This account allows you to save for upcoming educational expenses for your children. The maximum that can be deposited into an Educational IRA per child is $2000 annually. The contribution is not tax-deductible. Instead, earnings grow tax free and you pay no taxes or penalties on the money withdrawn to pay for qualified higher education expenses, such as tuition, before the child reaches age 30.

 

Because IRAs have many different features and deposits are based on your individual situation, please contact a qualified tax professional to discuss your options first, then visit one of our Membership Services staff members to open your IRA account.