Individual Retirement Accounts - Saving for Retirement
It's never too early—or too late—to start planning for retirement. At ACCESS Credit Union in Bristol, we offer both Traditional and Roth IRAs, giving you the flexibility to choose the retirement savings plan that best fits your financial situation, goals, and tax preferences.
What is an Individual Retirement Account (IRA)?
An Individual Retirement Account (IRA) is a tax-advantaged savings account that helps you build financial security for your retirement. Whether you're just starting your career or looking to boost your savings before retirement, IRAs offer long-term benefits that can help grow your wealth.
With an IRA from ACCESS Credit Union, you can:
- Choose between a Traditional or Roth IRA
- Make deposits anytime via direct deposit, online banking, payroll deduction, in person, or by mail
- Open an IRA with as little as $25
- Invest in higher-yield certificates once your balance reaches $500
Our IRA Options:
The main difference between a Traditional IRA and a Roth IRA lies in how and when you pay taxes.
A Traditional IRA is a personal tax-favored savings account. It allows you to make tax-deductible contributions (for most people), with taxes applied only when you withdraw funds in retirement.
A Roth IRA is funded with after-tax dollars, but qualified withdrawals are both tax-free and penalty-free.
Both types of IRAs have annual contribution limits and are subject to IRS rules. The right choice for you depends on your current income, tax situation, and whether you'd prefer to receive a tax break now or enjoy tax-free income later in life.
Benefits of a Traditional IRA:
- Tax-Deductible Contributions: Reduce your taxable income (if eligible)
- Tax-Deferred Growth: Earnings aren't taxed until withdrawal
- Lower Taxes Now: Potential to reduce your current tax bill
- Eligibility: Most people with earned income can contribute
Benefits of a Roth IRA:
- Tax-Free Retirement Income: Withdraw qualified earnings tax-free
- No RMDs: Keep your money invested as long as you'd like
- Flexible Withdrawals: Contributions can be withdrawn at any time, penalty-free
- Tax-Free Growth: All investment gains are tax-free if rules are met
- Contribute at Any Age: As long as you have earned income
Let's Plan Your Retirement Together
Ready to save for retirement and plan for your future? Visit ACCESS Credit Union at our Bristol branch or contact us to learn more. We'll help you understand your options and make the most of your retirement savings.
Who can contribute to a Traditional IRA?
If you are under age 70 1/2, and you or your spouse have earned income, you may contribute to a Traditional IRA, even if you participate in another retirement plan, such as one sponsored where you work. If you are married, both you and your spouse may each have your own IRA; however, you may not have a joint IRA.
How much can I contribute to my Traditional IRA?
Contributions are limited to a specific dollar amount each tax year, depending on your age. For 2017 & 2018, the contribution limit if $5,500 if you are under age 50. For 2017 & 2018, the contribution limit is $6,500 if you are age 50 or older. Contributions may not exceed 100% of your compensation.
When can I make contributions?
Contributions for a year may be made up to the tax filing deadline (usually April 15) for that year, not including extensions. Contributions cannot be made to your Traditional IRA for the year you turn age 70 ½ or for any later late.
Are my Traditional IRA contribution tax-deductible?
Your contributions are fully deductible if, for the year you contribute, you (or you and your spouse) do not actively participate in a retirement plan where you work. If you (or your spouse) do participate in a retirement plan at work, you may be eligible for either a full or a partial deduction based on your tax-filing status and income. If your income exceeds the limits set for that year, no deduction will be allowed.
When can I withdraw money from my Traditional IRA?
You may withdraw money from your Traditional IRA at any time. The taxable portion of the withdrawal will be taxed as ordinary income. Distributions taken before you reach age 59 ½ may be subject to the IRS 10% early withdrawal penalty.
IMPORTANT! – Tax rules can be complicated. This information is intended to serve as a general overview. Before making any decisions, you should speak with a qualified tax advisor.
Who can contribute to a Roth IRA?
You may contribute to a Roth IRA as long as you have income from working and do not exceed the income limits set for that year. There is no maximum age limit for contributing. If married, you and your spouse may each set up your own Roth IRA. If one spouse has little or no compensation, the spousal rules may allow each of you to contribute to your Roth IRA’s.
A maximum income limit applies to Roth IRA contribution eligibility.
When can I make contributions?
Contributions for a year may be made up to the tax-filing deadline (usually April 15) for that year, no including extensions. Remember, there is no maximum age limit; if you are working, contributions can be made for the year, even if you are age 70 ½ or older.
How much can I contribute?
Contributions are limited to a specific dollar amount each tax year, based on your age. For 2017 and 2018, the contribution limit is $5,500 if you are under age 50, and $6,500 if you are age 50 or older. Contributions may not exceed 100% of compensation, e.g., wages, salaries, tips, professional fees, bonuses, etc. If you or your spouse has little or no compensation, the spousal rules may allow each of you to contribute the full amount of your Roth IRA’s.
When can I withdraw funds from my Roth IRA?
You can take money out of your Roth IRA at any time. Unlike a Traditional IRA, you are never required to withdraw from your Roth IRA, even when you reach age 70 ½. Your account can continue to grow until you need the funds, and any funds you don’t need can be passed onto your heirs.
IMPORTANT! – Tax rules can be complicated. This information is intended to serve as a general overview. Before making any decisions, you should speak with a qualified tax advisor.
Disclaimer: Our calculators are for informational purposes only and are not intended to provide financial advice. All examples are hypothetical and for illustrative purposes only. The information provided when using the calculators does not constitute an agreement of any kind.