IRAs

Individual Retirement Accounts (IRA's)

An IRA is an individual retirement arrangement, which can be an individual retirement account or an individual retirement annuity. It is a personal savings plan that allows you to set aside money for retirement with tax advantages.

There are two primary types of IRAs: Traditional and Roth. Depending on which one you choose, you may be able to deduct some or all of your contributions. You also may be eligible for a tax credit equal to a percentage of your contribution.

Invest in an IRA

By using a Traditional IRA to save for your future, you may be able to save money today if

  • you are eligible to deduct Traditional IRA contributions on you federal income tax return or,
  • you qualify for a tax credit of up to $1,000.

But first you must be eligible to contribute to a Traditional IRA

  • You ( or your spouse if filing a joint tax return) must earn compensation from employment.
  • Starting with the 2020 tax year, you may make a contribution at any age.

Before 2020, you could not make contributions to a Traditional IRA beginning with the year you turned 70½. But effective for 2020 and later taxable years, you can make Traditional IRA contributions at any age if you (or your spouse if married, filing a joint tax return) have eligible compensation. For IRA purposes, eligible compensation generally is defined as what you earn from working and includes wages, salary, tips, commissions, bonuses, and self-employment income, but not investment or pension income. Traditional IRA eligibility is not affected by whether you are covered by an employer-sponsored retirement plan.

Need more information on IRAs?
Call 717-272-2210 or 800-489-5328

See Contribution limits and learn more about Traditional IRAs

PLEASE NOTE: PLEASE CONSULT A TAX ADVISOR TO DETERMINE IF THIS OPTION IS FOR YOU.

By saving now for retirement with a Roth IRA, you can look forward to

  • tax-free distributions,
  • not being required to take money out and
  • a possible tax credit of up to $1,000

But first you must be eligible for a Roth IRA.

  • You (or your spouse if filing a joint tax return) must earn compensation from employment.
  • Your earned compensation (or you and your spouse’s combined compensation if filing a joint tax return) must be less than or within the applicable IRA limits

See Contribution limits and learn more about Roth IRAs

PLEASE NOTE: PLEASE CONSULT A TAX ADVISOR TO DETERMINE IF THIS OPTION IS FOR YOU.

The Coverdell ESA’s sole purpose is to allow parents, grandparents, and other interested persons to set up to $2,000 aside each year to help pay the higher-education expenses of the child named on the account. The account is set up and reported under the child’s Social Security number. Earnings accumulate tax-free and withdrawals are tax-free if used for vocational, undergraduate, or graduate education expenses by the time the person is 30 years of age.

This ESA allows up to $2000 in nondeductible contributions for a child under the age of 18. Therefore, if both parents choose to contribute to a Coverdell ESA, the total of their contributions cannot exceed $2000. If the funds in the Coverdell ESA are not used by the child, the Coverdell ESA may be rolled-over to another child’s Coverdell ESA within the same family.

Open a Coverdell ESA Today!

PLEASE NOTE: PLEASE CONSULT A TAX ADVISOR TO DETERMINE IF THIS OPTION IS FOR YOU.

Consider this no hassle plan for small businesses-easy, low-cost ways to save for retirement

A simplified employee pension (SEP) plan is an employer-funded retirement plan that allows employers or self-employed individuals the option to make contributions into their own and each eligible employee’s Traditional IRA.

Learn more about SEPs

PLEASE NOTE: PLEASE CONSULT A TAX ADVISOR TO DETERMINE IF THIS OPTION IS FOR YOU.

Visit LFCU's Retirement Central for more information

Access IRA information from the Planning Tools section on Retirement Central

Questions?

If you have any questions, please contact us during normal business hours.

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