Traditional IRA

The traditional IRA Account allows you to defer taxes on your earnings until they are withdrawn. Earnings are taxed as income in the year they are withdrawn. You can withdraw funds from your traditional IRA without incurring a 10 percent IRS penalty any time after you reach age 591/2. Also, certain contributions are tax deductible in the tax year for which they are made.

Roth IRA

The Roth IRA is a non-deductible account that features tax-free withdrawals for certain distribution reasons after a five-year holding period. Since Roth IRA contributions are non-deductible and taxed in the year they are earned, people who expect to be in a higher tax bracket when they retire may benefit more from these accounts than a traditional IRA.

Coverdell Education Savings Account (ESA)

Unlike Traditional and Roth IRAs, ESAs are established for the future student, also referred to as the Designated Beneficiary. If the Designated Beneficiary is a minor, the mother, father or legal guardian is the responsible individual who has control of the investment and withdrawal decisions for the account. ESAs offer the potential of tax-free earnings, similar to a Roth IRA. ESAs can be used to finance elementary, secondary, and post-secondary education expenses. Qualified expenses include tuition, fees, books, and equipment required for enrollment or attendance.

Please call the Credit Union, ext.10 or e-mail info@ufsfcu.org for eligibility requirements.