IRAs (Individual Retirement
Accounts)
IRA accounts have recently gained popularity due to some
new and exciting changes to the rules/requirements governing
IRA accounts. Union Trades FCU offers all types of IRA
plans including the Traditional, Roth and Educational IRA
programs.
A traditional IRA program 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 the year you turn 70 ½.
This IRA program is gaining popularity because the account
allows all earnings to grow tax-free in this account
and there is no age that you must start distributions
from this account. This IRA is not tax-deductible; however,
it does offer some true advantages over a Traditional
IRA program. One of the benefits for some is the provision
for "qualified distributions". A qualified
distribution from a Roth IRA means the account must have
been opened 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 new
Roth IRA is that there is no required distribution, so
if you don’t need the funds you do not need to
take any withdrawals from the program.
This IRA account allows you to save for upcoming educational
expenses for your children. The maximum that can be deposited
into an Educational IRA per child from all sources 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or penalties on the money withdrawn to pay for qualified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, and fees,
before the child reaches age 30.
Because these accounts have many different features and
the deposits are based on your personal tax situation,
please consult your accountant or tax adviser before making
any decisions. |
