If you're looking for an effective way to save for retirement – one that is ideal for members of all ages who plan to retire one day, and won’t be needing those saved-up funds until they reach retirement age – then an Individual Retirement Account (IRA) may be the right option for you.
How does an IRA work?
IRAs are savings accounts that offer significant tax breaks – allowing you to contribute money and let it grow, tax-free or tax-deferred, over time. You can then withdraw and use the dollars you've saved and earned over the years to help fund your retirement.
What are the benefits of an IRA for retirement savings?
As offered by the IRS, some of the main benefits of an IRA are:
- "Contributions you make to an IRA may be fully or partially deductible, depending on which type of IRA you have and on your circumstances, and
- Generally, amounts in your IRA (including earnings and gains) aren't taxed until distributed. In some cases, amounts aren't taxed at all if distributed according to the rules."
What are the different types of IRAs? Which options does 3Rivers offer?
There are several types of IRA options to choose from. You've likely heard of Traditional IRA and Roth IRAs (more information below.) At 3Rivers, we offer these plans, in addition to Simplified Employee Pension (SEP) plans, Coverdell Education Savings Accounts, and a wide array of other investment options (available through CFS*).
What's the difference between a traditional IRA and a Roth IRA?
Simply put, the primary difference between the a traditional IRA and Roth IRA is how and when you'll receive a tax break. Traditional IRA contributions are tax-deductible for the year in which you've made a contribution - on both state and federal tax returns, and the withdrawals that you make in retirement are taxed at regular income tax rates. Contributions to Roth IRAs, on the other hand, allow you to invest your money after taxes, and withdraw your contributions and earnings later, tax-free.
For more information about the differences between traditional and Roth IRAs (and to help discover which option is best for you) visit this link.
What are the contribution limits?
3Rivers members are able to make contributions to their Traditional IRA, Roth IRA & Educational IRA for the previous year through the tax deadline of the current year. It is very important that you note which year the contribution is for when talking with our team members!
Contribution limits for CESA and IRAs
CESA/Education IRA: $2,000.00 (See chart below)
Traditional & Roth IRAs
|Year||Under Age 50||Age 50 and Over|
Learn more about contribution limits at this link.
Individual Retirement Account (IRA)
* NO minimum balance required to open. IRA rates are variable and set by the Board of Directors on a monthly basis. Rate subject to change after account is opened. Dividends are calculated on the daily balance, compounded monthly, and credited to the account at the end of the month. Dividends begin to accrue upon deposit. Roth, Traditional, CESA options available. Share Certificates in various terms are also available. Dividends are paid from current income and available earnings after required transfers to reserves are made at the end of a dividend period. Dividends are not guaranteed. IRA rates are variable and set by the Board of Directors on a monthly basis.
1Variable rate account, rate is subject to change anytime after account opening. Fees could reduce earnings. Please see our Fee Disclosure Statement for further information about fees potentially related to these accounts.
2APY=Annual Percentage Yield. Deposit accounts are insured by account ownership up to $250,000 by the NATIONAL CREDIT UNION ADMINISTRATION.
Note: A $10 annual maintenance fee will be assessed on accounts under $1,000.00 beginning January 31, 2019.