Why IRAs?
Individual Retirement Accounts (IRAs) are powerful financial tools that can help you and your family feel more secure. By making consistent contributions, IRAs offer a structured way to grow your savings while taking advantage of tax benefits to make your money work harder for you.
Over time, these contributions can lead to a more financially stable retirement, giving you the flexibility to support both you and your family. Saving now can offer peace of mind and financial confidence for years to come!
Let's explore the differences between traditional and Roth IRAs
Traditional vs Roth
Contributions
A big difference between traditional and Roth IRAs is when contributions are taxed. With a Roth IRA, contributions are made with post-tax income, which allows contributions to grow and be withdrawn tax-free. Traditional IRA investments are made before tax is taken out, which allows tax-deferred growth.
Withdrawals
If you expect to be at a lower tax-rate when you make withdrawals, a traditional IRA account would be a great option for you. On the other hand, if you expect that you may need to make withdrawals before you are 59 ½ years old, you might have to pay taxes on your earnings, plus an additional 10% penalty. With a Roth IRA account, contributions may be withdrawn at any time without taxes, but earnings may still come with penalties.
Distributions
If you are hoping for more flexibility with your distribution schedule, a Roth IRA might be the right choice for you with no required minimum distributions during your lifetime. Traditional IRA distributions in retirement are taxed as ordinary income and must start around the time you turn 73.
Interested in saving for retirement or need to add another account to your portfolio?
An IRA account can be what you need to secure your financial future! At ECCU, we offer both traditional and Roth IRAs to help you save for retirement. All retirement accounts are insured by the NCUA up to maximum limits allowed and we also offer additional protections!
If you need additional guidance on which option is best for you and your financial situation, reach out to one of our experts who will prioritize your best interests. Whether you're opening a new account, or rolling over an existing one, ECCU is here to help!
Visit your nearest branch or give us a call (832) 604-4848.
