RESCU offers an IRA Savings (Share) Account and IRA Certificates, for both Traditional and Roth IRAs. Call your RESCU representative for more information!
What is an IRA?
An IRA is an Individual Retirement Account. This type of account allows an individual to save for retirement, typically on a tax-deferred basis. There are two main types of IRAs:
- Traditional IRA: You contribute to this type of account with money that you may be able to deduct on your tax return. Earnings can potentially grow tax-deferred until you withdraw them in retirement. At retirement, many individuals go into in a lower tax bracket, so the tax-deferral means the money may be taxed at a lower rate.
- Roth IRA: You contribute with money that you’ve already paid taxes on (after-tax); however, your money may potentially grow tax-free, with tax-free withdrawals in retirement, if certain conditions are met.
Opening an IRA account at RESCU is very easy, and allows for immediate access to your IRA funds. RESCU IRAs very safe, and are backed by high-quality-low-risk investments that are approved by credit union regulations, and are also insured by the NCUA by at least $250,000. Higher risk, higher return uninsured IRA’s are best obtained through a leading wealth management investments company, such as Oppenheimer & Co. Whether you choose a Traditional or Roth IRA, the tax benefits allow your IRA savings to potentially grow, or compound, more quickly than in a non-IRA taxable account.
Note: Discuss your individual tax ramifications, deduction, and contribution limits, based on your annual income, with your tax accountant and/or legal counsel. Every year, the IRS updates the contribution limits (and income thresholds) for IRAs. (The information below was current as of 02/2018.)
The 2018 MAGI (Modified Annual Gross Income) contribution phase-out threshold ranges for ROTH IRAs are:
- $120,000 - $135,000 for those filing a Single Individual Tax Return
- $189,000 - $199,000 for Married, filing Joint Tax Return
- $10,000 for Married, Filing Separate Tax Returns
The 2018 MAGI (Modified Annual Gross Income) contribution phase-out threshold ranges for Traditional IRAs are:
- $63,000 - $73,000 for a Single Active Participant filing an Individual Tax Return
- $101,000 - $121,000 for a Married Active Participant, filing Joint Tax Return
- $10,000 for a Married Active Participant, Filing Separate Tax Returns
- $189,000 - $199,000 for a Spouse of an Active Participant
If your MAGI (Modified Annual Gross Income) falls under the phase out limits above, in 2018 the contribution limit (how much you can contribute during the year) is $5,500 up to age 50. If over age 50, you are allowed an additional $1,000 catch up contribution (for a total contribution limit of $6,500 if over age 50).