INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
Plan for the Retirement You Deserve
Individual Retirement Accounts (IRAs) offer tax-advantaged ways to save for the future, helping you build financial security for the years ahead.
Individual Retirement Account (IRA) Basics
Individual Retirement Accounts (IRAs) are retirement savings accounts offered by credit unions, brokerages and other financial institutions. IRAs are a secure way to save for the future, require little administration, are easy to set up, and can have special tax advantages. Penlanco FCU offers a number of ways to help you establish and manage a healthy retirement program so you can achieve your retirement goals.
Traditional IRA and Traditional IRA Certificates
Traditional IRAs allow you to set aside pre-tax dollars for retirement. It’s an easy and effective way for you to put money aside for your future, while offering tax benefits today.
- You can open and fund a Traditional IRA without the aid of your employer
- There is no minimum to open the account, and there are no maintenance fees
- There is no age limit on contributions, so long as you are employed
- Enjoy immediate tax benefits with deferred tax payments until retirement. Consult your tax professional to determine if your contributions will be tax-deductible, and any advice specific to you and your situation.
- Feel at ease with easier access to your funds than with a traditional employer plan
- Decide how much you want to save (within IRS limits), and automate your savings via an automatic transfer or payroll deduction
- IRA balances are insured by NCUA for $250,000, separate from the insurance on your shares
- Once you have established a Traditional IRA with Penlanco FCU, you may open a Traditional IRA Certificate to increase your earnings (available on balances of $500 or more)
IRA Withdrawal Basics
Before withdrawing funds from your Traditional IRA, it’s important to understand how distributions are taxed and when penalties may apply.
How Traditional IRA Withdrawals Work
Money in a Traditional IRA grows tax-deferred, meaning you don’t pay taxes on earnings until you make a withdrawal (also called a distribution). When you do withdraw funds, the amount will generally be taxed at your current income tax rate.
Traditional IRAs may be a good option if you are looking to reduce your current tax liability and expect to be in a lower tax bracket when you begin withdrawing funds during retirement.
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
Important Note
Withdrawals made before age 59½ are typically considered early withdrawals and may be subject to IRS penalties in addition to applicable taxes.
For the most current information on contribution limits and IRA rules, review the latest IRS guidelines.
How to set up your Traditional or Roth IRA
Setting up your Traditional or Roth IRA at Penlanco FCU is easy. Just stop by Penlanco FCU during business hours, or give us a call at 717-569-9621 to request the paperwork by mail. When coming in, please bring your valid identification as well as the personal information of your designated beneficiary(ies).