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IRA 101

When you get to thinking about it, can you really rely on your employee pension and retirement plan to provide a comfortable lifestyle in your later years? An individual retirement account, better known as an IRA, can be a great vehicle to stash your cash for retirement.

An IRA works like a personal savings plan. It allows you to save money for your retirement while offering you tax advantages. You may be able to take a tax deduction for some or all of your yearly contributions. HFCU offers the following IRA options:


These have been around since 1975. Traditional IRAs offer tax deferred earnings and the possibility for tax-deductible contributions. These tax advantages make the Traditional IRA a powerful tool in creating a balanced, long-term savings plan.


Just a bit of trivia here, the Roth IRA was named for former Senate Finance Committee Chairman William Roth, Jr. This IRA offers more incentives to boost your retirement savings and more ways to put your nest egg to work! With a Roth IRA, you pay taxes now on your contributions, you can withdraw your initial deposits at anytime; however, for your dividends to be tax-free, you may not want to withdraw them until you are 59 ½ years old and have had the account for 5 years.


This IRA’s main purpose is to help you pay for your child’s education expenses, from tuition to fees, books, supplies and even room, board and computers. Unlike traditional IRAs, your contributions to an Education IRA are never tax-deductible. However it does offer you the potential for tax-free withdrawals including earnings.
You can receive up to $500,000 insurance for traditional and Roth IRAs. The NCUA has increased its insurance for Traditional and Roth IRA’s from $100,000 to $250,000. Plus with an additional $250,000 insurance is available from ESI. So again, rest easy, we’ve got your investments fully covered!