Individuals currently investing in Individual Retirement Accounts (IRAs) and those who are thinking of establishing an IRA now have two new types of IRAs from which to choose.
Created as part of the Taxpayer Relief Act of 1997, the new Roth IRA and Education IRA feature tax-free and penalty-free withdrawals for certain distribution reasons.
In addition to the introduction of these new IRAs, Traditional IRAs have been modified to offer several new features and benefits. SSFCU can assist you in selecting the IRA that best fits your needs.
Traditional IRA
New and improved, offering added features and benefits. Comes as a savings account or as a CD-like certificate.
Don't look now...retirement is closer than you think.
Save for the future, a little at a time, with an IRA Savings Account (variable rate).
Or, make a lump sum deposit into an IRA Certificate (fixed rate). This works just like a CD, in which you commit your funds for a specified length of time. In return, you get certificate rates on your IRA money.
New features in 1998 include:
Increased income ceiling for tax-deductible contributions
Individual contributions can be made by spouse.
IRA can be opened for as little as $100.
Depending on your situation...and government rule changes, you could enjoy tax-deferred interest at competitive rates.
Check with a tax advisor for all the Income Tax details.
Although we have made every effort to provide you, our members, with accurate information concerning these IRAs, this material is subject to change based on regulatory interpretation and/or additional congressional action.
How to plan for your retirement is one of the most important decisions you will have to make. We encourage our members to look ahead and plan for a strong financial future with one of our Individual Retirement Accounts.
A great new product that offers advantages for savers of all ages.
This IRA offers a flexible retirement savings program. With the Roth IRA, the contributions are not tax-deductible, but the interest is. All earnings grow tax-free so you will not have to pay taxes once you begin taking distributions.
Tax-free retirement income
Higher income ceiling for contributions than Traditional IRA
Contributions allowed in addition to your 401(k) plan
No requirement to begin distributions at age 70-1/2
Ability to withdraw contributions without penalty after five-year holding period based on age or special circumstances, such as buying a first home.
Tax-benefited IRA rollovers.
Read this article that summarizes the Roth and explains how younger members can use it to save for a first-time home purchase.
Or check out this comparison table to see how the Roth stacks up against the Traditional IRA.
Another new product in 1998. Specially designed to help you save for college.
These days, college is an investment. Now you can start investing in your child's financial future today with the Coverdell Education Savings Account.
Start a savings plan for your children or grandchildren
Invest up to $2000 per child per year
Receive tax-free and penalty-free distributions
For your information: According to the College Board, a non-profit association that monitors higher education, college costs are increasing at 5% per year. In 18 years, getting a bachelor's degree at a public university could cost as much as $68,000 and the same degree at a private institution could average over $175,000.
Summary
The Roth, Coverdell Education Savings Account, and Traditional IRA all offer attractive benefits to investors depending on their current retirement savings situation. SSFCU will offer all three types of IRAs and will also be sponsoring special seminars designed to inform you about the advantages of investing in a Roth, Traditional or Coverdell Education Savings Account.
