Individual Retirement Accounts (IRA)
It's never too late, or early, to plan for your retirement. A SAFCU IRA is a smart addition to your retirement portfolio, providing potential tax advantages.1 Whether you plan to retire in a few years or a few decades, SAFCU is the place to get started. We offer two IRA plans to help you start saving:
A Traditional IRA plan offers three basic benefits: Security for your retirement years; tax-deferred dividends until you withdraw your funds (as early as age 59-1/2); and a possible deduction from annual gross income on your federal income tax return. These tax advantages make the Traditional IRA a powerful tool in creating a balanced, long-term savings plan.
Roth IRAs are different from traditional as contributions are made with post-income taxed dollars. Unlike a Traditional IRA, Roth IRAs permit continuing contributions after age 70-1/2, and there is no requirement to begin withdrawals at age 70-1/2. Retirement savers can have both a Traditional and a Roth IRA, but combined contributions in any tax year are limited to that year's limit1. The Roth IRA offers more incentives to boost your retirement savings.
Deciding between a Traditional IRA and a Roth IRA
Review the following chart to decide which best fits your financial situation.1
|Traditional IRA||Roth IRA|
|Eligibility||You must be under 70 1/2 years old.||Available for all ages.|
(if age 50 or older by 12/31/15)
(if age 50 or older by 12/31/15)
|Contribution deadline||IRAs must be opened by April 15 the current tax year, for previous tax year benefits.|
|Income limit||Anyone is eligible to contribute, but not everyone will receive the tax benefit.||Up to $117,000 for Single filers.
Up to $184,000 for Married (combined annual income).
|Advantages||Earnings are tax-deferred until withdrawn. This may help you decrease your taxable income to a lower tax bracket.
No income restrictions.
|Tax free withdrawals on the principal and all earnings.
No mandatory distribution age.
No minimum withdrawal requirement.
|Disadvantages||Withdrawals before 59 1/2 are subject to a 10% penalty.1||Contributions are not deducted from your taxable income.|
|Current Rates||View Rates||View Rates|
Two Ways to Invest
Our Traditional and Roth IRAs are available as IRA Savings or IRA Certificates. Here's an overview of both options:
|IRA Certificate||IRA Savings|
|What is it?||A guaranteed fixed rate for a specific term. After your certificate matures, you can move it or let it automatically renew with a new fixed rate.||A savings account that earns a variable rate. You aren't locked into any time frame, so you can enjoy more flexibility.|
|Who is it for?||Members who want the peace of mind of a steady return on their money.||Members with limited starting funds, or anyone who wants the freedom to move their money around.|
|Contribution deadline||IRAs must be opened by April 15 of the current tax year, for previous tax year benefits.|
|Available in?||Traditional and Roth IRAs||Traditional and Roth IRAs|
|What are the terms?||Terms from 6 to 60 months||No set terms|
|Is it insured?||Yes, by the National Credit Union Administration (NCUA)2||Yes, by the National Credit Union Administration (NCUA)1|
Have an IRA question? Call (800) 541-2546.
1Retirement account deposits, including Roth and Traditional IRAs, are insured by the NCUA up to $250,000 per depositor. Learn more about deposit insurance.
2Contact your tax advisor for details.