Individual Retirement Account
An Individual Retirement Account (IRA) is a savings account that allows you to save money for retirement in a tax advantaged manner. IRAs were created in the United Sates in the mid '70s in an effort to encourage consumers to save additional funds for retirement*.
Dividends are compounded monthly on the average daily balance in the account. You can make contributions into the account via direct deposit, automatic transfer or payroll deduction.
TLFCU offers many types of individual retirement accounts with various terms. Traditional, Roth, or Education IRAs can be established and funds deposited into a savings or certificate of deposit IRA.
Contributions to a traditional IRA can be made for the previous year up to April 15 of the current year. At age 59½, you can begin to enjoy your hard-earned savings with no penalty or fees.
A Roth IRA is similar to the standard IRA but with a twist. As long as certain requirements are met, all withdrawals are completely free from federal income tax*. The drawback is that your annual contributions are not tax-deductible. A Roth IRA allows you to contribute a predetermined amount, determined annually by the IRS, and your earnings are always tax deferred until withdrawn. Once you turn 59½, you can enjoy the savings penalty-free and tax-free. Penalties are even waved for first time home buyers and for health/disability emergencies.
When does one start to save for their child's education? It's never too soon! TLFCU can help you pay for higher education expenses with a Coverdell-Education IRA. Early withdrawal penalties are not applicable and contributions to a Coverdell/Education IRA are not tax deductible*.
Check with one of our helpful representatives for current interest rates and further information on individual retirement accounts*. Call 850-576-8134 for more details.