Account Services / SAVING Accounts / Individual Retirement Fund Account

Individual Retirement Accounts (IRAs) are a smart investment in your future and may help you save on taxes today. The IRA Deposit Account helps you save for retirement with the ease of passbook savings. Deposits can be made any time (up to $3,000.00 per year), and payroll deduction deposits make it even easier! As your retirement funds grow, you can lock in a higher rate of return with an IRA CD. IRA CDs are available for lump sum deposits of $1,000.00 or more.

To open an IRA deposit account, the minimum requirement is $1.00 to get you started in your retirement planning. Additionally, IRA accounts are separate from regular savings accounts, and they are insured up to $350,000. By combining your savings and IRA at the credit union, you may now have a combined level of savings insurance of $700,000.

TBACU Offers Three Individual Retirement Accounts To Suit Your Retirement Planning Needs!

Traditional IRA

Traditional IRAs have been around since 1975. Like other IRAs, it offers tax-deferred earnings. In contrast with other IRAs, the traditional IRA has the possibility of tax-deductible contributions. There are age requirements, but no income limits, for making traditional IRA contributions. The income limits for traditional IRAs determine whether or not these contributions are eligible to be deducted from the owner's taxable income for the year.*

• Offers tax-deferred earnings and possibly tax-deductible contributions if you meet the requirements. If you and/or your spouse actively participate in an employer-sponsored retirement plan, you can deduct contributions only if your income is below certain limits. If you're not participating in a retirement plan, your traditional IRA contribution is deductible regardless of income. Ask your credit union IRA representative for details.



• You can contribute if you have earned income and you will not reach age 70 1/2 by the end of the year. If you file a joint tax return, you can treat your spouse's income as your own.



• You can contribute to a traditional IRA, an employer-sponsored retirement plan, and a Roth IRA in the same year.



• When you withdraw from a traditional IRA, your withdrawal will be treated as taxable income.



• If you make a withdrawal before age 59 1/2, you generally must pay a 10% tax on early distributions. There are exceptions, such as rollovers, so ask your credit union IRA representative for more details.



• You must begin taking required minimum distributions at age 70 1/2.

Roth IRA

First available in 1998, the Roth IRA does not allow for tax deductions. It does, however, offer the possibility of tax-free distribution of earnings. While there are no age requirements for making Roth IRA contributions, persons must fall below certain income limits in order to be eligible to contribute.*

• Contributions are not tax-deductible, however, you can withdraw contributions and earnings from a Roth IRA tax-free.



• To contribute to a Roth IRA, joint filers' modified adjusted gross income must be less than $160,000 and less than $110,000 for single filers.



• You can withdraw funds tax-free before retirement under certain conditions: if your funds have been in your account for at least five years, you're older than 59 1/2, you buy a first-time home, or if you become disabled or die.



• You're not required to start taking minimum distributions when you reach 70 1/2 as with a traditional IRA. You can let your money continue to grow tax-free for as long as you like.

Education IRA

Introduced in 1998, the Education IRA is a special type of savings plan established for the sole purpose of helping pay the higher-education costs of the designated child on the account. Contributions are not tax-deductible, but the earnings will be tax-free upon withdrawal if used to pay for qualified educational expenses before the child's 30th birthday.*

Changes to Individual Retirement Accounts

Now, thanks to the biggest tax cut in 20 years, retirement plans are more powerful. You're eligible to contribute more to individual retirement accounts (IRAs) than ever before.

With an IRA, you can invest your money in a variety of savings and investments such as CDs (share certificates), mutual funds, and individual stocks and bonds.

You can have more than one IRA, even two accounts of the same type. But the more you have, the more you have to manage, so experts recommend keeping the number of accounts to a minimum. Rollovers also are possible from one IRA into another.

For more information about TBACU or to find out how you can join, please call 713-336-5500 or 800-577-3164, visit any branch office or e-mail us.

To apply for membership please contact us.