Plan for Your Tomorrow With Solutions CU Retirement Accounts
Solutions CU offers two types of IRA’s (Individual Retirement Accounts) in order to save money for the purpose of retirement. An IRA is an excellent tool for retirement savings. IRA accounts grow by using a compounded interest over an extended period of time, meaning that accumulated interest is added to the principal each time in calculating earnings. Over the course of 20 or more years, these accumulations can be substantial.
Eligibility- The owner must be under the age of 70 1/2 and must have some form of compensation to contribute.
Contributions- The annual contribution limit for 2023 is $6,500 for those members under age 50 and $7,500 for those over age 50. Contributions are tax-deductible, but deductibility may be limited if you or your spouse are an active participant in an employer retirement plan. Contributions and interest earned grow on a tax-deferred basis.
Withdrawals- An owner must be age 59 1/2 before making a withdrawal from a traditional IRA without incurring a 10% tax penalty; however there are several exceptions to this rule so check with the credit union or your financial advisor for all the details.
Earnings are taxed only upon withdrawal or distribution and distributions must begin at age 73.
Eligibility- An owner must have earned income to establish and contribute to a Roth IRA. There is no age limit or restriction.
Contributions- The maximum contribution rules are the same as for a traditional IRA even after age 73. Contributions to Roth IRA’s are not tax-deductible.
Withdrawals- Qualified distributions can be made after a five year tax period is reached and the owner must be 59 1/2 years of age. Early withdrawals are allowed under certain circumstances. There is no required minimum distribution for Roth IRA’s.
For more information about IRA’s, please call (607) 734-7144 to speak to a representative.