Individual Retirement Accounts (IRAs)
An IRA is a great savings tool because of the special tax advantages. Over time, these benefits can result in a much larger nest egg than ordinary savings could provide.
In addition to traditional and Roth IRAs to build a financially secure retirement, RBFCU also offers Coverdell Education Savings Accounts (CESA) that have many of the same tax savings.
- Summary
- Tax-advantaged retirement savings
- Competitive interest earnings
- No setup or maintenance fees
- Traditional IRAs available
- No income limits to be eligible
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Contributions are typically tax-deductible*
- Withdrawals can begin at age 59½
- Early withdrawals subject to penalty**
- Roth IRAs available
- Income must be less than $95,000 annually to open
- Earnings are 100% tax free at withdrawal
- Contributions are NOT tax deductible
- Principal contributions can be withdrawn without penalty*
- Withdrawals on interest can begin at age 59½
- Early withdrawals on interest subject to penalty**
- No minimum deposit to open IRA Savings Account
- Federally insured by NCUA up to $250,000
*Subject to some minimal conditions.
**Certain exceptions apply, such as healthcare, purchasing first home, etc.
- IRA Rollovers
Raritan Bay FCU can help you simplify your nest egg. If you are looking for a better rate, have changed jobs, or recently retired, it may make sense to consolidate your retirement savings into a single IRA. An IRA rollover may allow you to:
- Preserve the tax-deferred status of your retirement savings
- Increase your investment options
- Move your money out of your former employer's retirement plan without tax or penalties
- Reduce the cost of administration
- Take control over your retirement plan
- Education
Formerly called the Education IRA, a Coverdell Education Savings Account (CESA) provides tax-free earnings when the funds are used for your child's (or other beneficiary's) qualified education expenses.
- No setup or maintenance fees
- Interest grows tax free
- Withdrawals tax free when used for qualified education expenses*
- Contributions are not tax deductible
- $2,000 maximum annual contribution per child
- Contributions can be made until the child is 18 years old
- Funds must be distributed when recipient reaches age 30
- Contributors do not have to be related to recipient
- Individuals and non-individuals (such as companies or charities) can contribute up to $2,000 per child per year
- Federally insured by NCUA up to $250,000
*Qualified expenses include tuition and fees, books, supplies, board, etc.
