Whether you're 25 or 55, someday it will be your turn to retire. Either way, it's a good idea to contribute early and often to an Individual Retirement Account. You'll set yourself up for a steady income, create opportunities for tax breaks, and generally feel confident you'll be able to afford exactly the type of future you dream about in Washington, D.C., Maryland, Virginia or New Jersey.
It may be time to take it easy. Or take it to another level.
Roth IRA Savings
Watch your money grow tax-free and take withdrawals without penalty
Start saving for retirement at any age, as long as you have earned income
- A retirement savings account that provides tax-free growth on your investments
- Contribute up to $6,500 per year ($7,500 if you are over age 50)
- Yearly contributions may not be deductible, but you can make withdrawals tax-free
- Begin making withdrawals after 5 years of having an active Roth IRA and as early as age 59 ½
- Otherwise, access to these accounts is restricted, IRS withdrawal and contribution limits apply
- Funds are insured for $250,000 by the National Credit Union Insurance Fund, an arm of the National Credit Union Administration
Roth IRA
Delay the tax benefit until you need it
- Contribute up to $6,500 per year ($7,500 if you are over age 50)
- Choose from a range of savings and investment accounts
- Funds can also be used for education costs and purchasing homes
- No annual tax deductions, but no taxes owed on withdrawals
- Begin making regular withdrawals as early as age 59 ½
Traditional IRA
May offer an annual tax deduction
- Contribute up to $6,500 per year ($7,500 if you are over age 50)
- Choose from a range of savings and investment accounts
- Enjoy potential tax deductions each year that you contribute
- Begin making regular withdrawals as early as age 59 ½
Coverdell Education Savings Account
Education may be priceless but it comes at a cost
- Save up to $2,000 a year for education costs
- Any friend or family member can contribute to the student's account
- No annual tax deductions, but funds grow tax-free and withdrawals are tax-free
- Students can use money any time before age 30
- Use the funds for private elementary and secondary school tuition as well as higher education
STILL HAVE QUESTIONS?
As a general rule, you want to start the process where the IRA fund will end up. This ensures there is an IRA to deposit the funds you send. Go to Invest/Individual Retirement Accounts (IRAs) to open an IRA account.
Andrews Federal Credit Union is a full-service financial institution with stateside locations in Washington, D.C., Maryland, Virginia and New Jersey, as well as overseas locations in the Netherlands, Belgium and Germany.