Individual Retirement Accounts (IRAs)
IRAs allow you to save for retirement or a child’s higher education. CUA offers traditional and Roth IRAs, as well as IRA certificates and an Education Savings Account – Coverdell Education Savings Account (CESA). We also have IRA Specialists on staff if you have any questions about the investments that are right for you.
Traditional IRAs let you defer taxes on the earnings of your contributions until they are withdrawn. Certain contributions may be tax deductible in the tax year that they are made. If you are younger than 70 ½ for the entire tax year and have earned income (or your spouse has earned income), you are eligible to establish a Traditional IRA.
Roth IRA contributions are non-deductible and taxed as income in the year they are earned. The Roth IRA features tax-free withdrawals for specific distribution reasons after a five-year holding period. Roth IRA distributions of contribution amounts are always free of penalty tax, regardless of the reason or timing. If you expect to be in a higher tax bracket when you retire, you may benefit from a Roth IRA rather than a traditional one.
Roth Eligibility Requirements:
You must have earned income (or your spouse must have earned income)
Your modified gross income (MAGI) cannot exceed certain prescribed limits.
Tax Free Withdrawal Distribution Reasons:
After age 59 ½
First-time home purchase
In the event of the owner’s death
Coverdell Education Savings Account (CESA) savings accounts are for educational needs and withdrawals are tax-free if used for educational expenses. Children must be members and under 18 years of age, with no age restrictions for children with special needs. Total contributions cannot exceed $2,000 in any calendar year, regardless of the number of accounts established.