An Individual Retirement Account (IRA) is, in the simplest terms, a personal savings plan with tax advantages to either the deposits or the withdrawals from accounts under that plan, depending on what type of IRA you open.
IRA accounts have various restrictions on how much money you can deposit into the account every year, known as a contribution limit, at what age you can withdraw from the account without penalties, and what you are expected to withdraw from that account when you retire. One major restriction on withdrawals is that you must be over the age of 59 ½ to not receive an early withdrawal penalty from the IRS. Remember, these restrictions are subject to change on an annual basis, so it is always best to speak to a tax-advisor with any questions.
There are two main kinds of IRAs you are likely to encounter at your financial institution: Traditional IRAs and Roth IRAs. There are a few other kinds, but these two are the most common.
These Traditional or Roth IRA savings plans can be opened as a variety of actual account types. If you are nearing retirement and need a safe place to harbor your retirement funds outside of the ups and downs of the stock market, see if your financial institution offers IRA Certificates or IRA Money Market accounts that are a federally insured place to finish your savings journey.
If you are just starting your retirement planning journey, you may want to speak to a Financial Advisor to answer the questions that you might have, as well as taking advantage of the higher yields that come with more risks from investments, which may not be federally insured. Either way, make sure you consult a Certified Public Accountant or another accredited tax advisor before making any decisions related to funding your retirement account.
The good news with Northeast Credit Union is that we offer you both options. You can open our IRA Share Certificate Accounts or IRA Money Market accounts as either a Traditional or Roth IRA by scheduling an appointment with a Member Experience Specialist or by calling 888-436-1847.
For more information on invested IRAs and retirement planning, please contact a Northeast Wealth Advisor at wealthmanagement@necu.org.