When it comes to retirement, many individuals are unaware of the benefits of saving for retirement outside of the typical 401K account.
An Individual Retirement Account (IRA) is a different approach to saving for retirement. Individuals can choose to contribute to a Traditional IRA or a Roth IRA, or even both. Opening an IRA can lead you on a successful path for retirement.
There are two primary types of IRAs, a Traditional IRA and a Roth IRA. Funds contributed to a Traditional IRA are not taxed until they are distributed in retirement. Contributions made to a Traditional IRA can be fully or partly deductible, which can lower your taxable income. Once in retirement, many retirees find themselves in a lower tax bracket than what they were pre-retirement. The tax deferral may allow for the funds to be taxed at a lower rate than what it would have been taxed pre-retirement.
A Traditional IRA can yield an upfront tax break, whereas a Roth IRA will yield a tax break when you are ready to retire. A Roth IRA has the benefit of providing tax-free distributions when you retire. This type of account has no minimum distribution, provides tax-free withdrawals, and you can withdraw at any point in your retirement. Roth IRAs are capped at $6,000 (or $7,000 if you are age 50 or older).
IRAs are easy to open at cPort Credit Union! To open and make contributions to an IRA, you (or your spouse) need to make a taxable income. Once you have determined if you are eligible, you can open an IRA by visiting any one of five cPort branches and speaking with a Member Service Representative. You can manage your funds on your own or work with us to help determine your best option. Many choose an automated approach where the funds are automatically observed and balanced to meet your goals.
cPort can help you meet your retirement goals through the tax-deferred savings of Individual Retirement Accounts. Contact us today to see how easy it is to start saving for your retirement. Call 1-800-464-0253, email [email protected], or stop into one of our branches for more information.