IRA Account

We have all heard how important it is to save up for retirement. Let’s sit down and take a look at what an IRA account is and how retirement accounts work.

IRA Account - What is it

What is an IRA account?

An IRA (Individual Retirement Account) is an investment account for your retirement. Unlike a 401K, an employer-funded retirement plan, you may withdraw money from your IRA account whenever you want to once you reach an eligible age. As an IRA savings account, it comes with tax savings. The best IRA accounts have a different tax benefit for you to choose from.

IRA Account - 2 main IRAs

There are two main types of IRA accounts: Traditional IRA and Roth IRA.

Age requirements: To contribute, you must be under age 70 1⁄2. For withdrawals, if you are under age 59 1⁄2, you will be subject to a 10% early distribution tax penalty on any taxable IRA savings withdrawn. When you reach 70 1⁄2, traditional IRA owners are required to take minimum annual distributions.

Tax benefits: The traditional IRA has a possible tax credit of up to $1,000.00 when you contribute. Furthermore, earnings on the funds are tax-deferred; you won’t pay taxes until you withdraw funds from the account. As a tax-deductible contribution, you don’t pay taxes until you remove the money from the IRA. If you or your spouse do not actively participate in an employer-sponsored retirement plan, then you’re eligible to deduct your full contribution. Otherwise, you’ll need to refer to the MAGI limits (MAGI-modified adjusted gross income) to determine how much can be your deductible contribution. Any non-deductible contributions are tax and penalty-free.

Eligibility requirements: You or a spouse filing jointly must show earnings/compensation from employment.

Contribution limit: Each tax year sees a new adjustment to the contribution limits. 2020 annual contributions limit is $6,000.00 with an additional $1,000.00 if over the age of 50.

Traditional IRA FAQ

Age requirements: You are never required to take money out of your Roth IRA, no matter your age. However, there are penalties if you do make a withdrawal and it’s not considered a qualified distribution. If you take money out before the age of 59 1⁄2, you’ll be subject to a 10% early distribution tax penalty on any taxable amount withdrawn, unless you qualify for a penalty-free early distribution. You would qualify for a penalty tax exemption if you have owned the account for more than 5 years, you are disabled, a first-time home buyer, or are a Roth IRA beneficiary.

Tax benefits: With a Roth IRA, you may also qualify for a possible tax credit of up to $1,000.00 when you make a Roth IRA contribution. You can withdraw from a Roth IRA account at any time, penalty-free, as long as it’s a qualified distribution. Earnings are tax-deferred, which means it’s taxed when you withdraw the money. If it’s a qualified distribution, you can remove IRA savings tax-free. A Roth IRA withdrawal is not tax-deductible.

Eligibility requirements: You or a spouse filing jointly must show earnings/compensation from employment. Together your earned income must be less than IRS limits. Single, your modified adjusted gross income must be less than $124,000.00 for a 100% contribution in 2020. This amount is up from $122,000.00 in 2019.

Contribution limit: Each tax year sees a new adjustment to the contribution limits. The 2020 annual contributions limit is $6,000.00 with an additional $1,000.00 if you’re over the age of 50.

Roth IRA FAQ
IRA account - Retirement plan in action

Retirement plan in action.

You have worked so hard to build a life for yourself. An IRA account is your retirement plan for when the money flow stops. With the best IRA accounts, you’ll be able to enjoy your life while reaping the rewards of retirement. Often, you’ll have more time to enjoy things you couldn’t while holding down a career.

Retirement accounts are your income after retirement. You start building your portfolio now so that you have enough saved to replace your income loss when the time for retirement comes. As an investment account, it is often best to diversify your assets among stocks, bonds, and cash. Stocks provide high growth potential. Bonds and cash provide long-lasting protection against stock market dips and a bear market trend. The important part about building up the account in an IRA instead of a traditional savings account or deposit accounts is that IRA retirement accounts have tax benefits. We encourage you to speak with a trusted financial planner to figure out your best options.

Traditional IRA vs Roth IRA
IRA account - how much

How much do I need to save for retirement?

One rule of thumb is beginning at the age of 25 to save at least 15% of your pre-tax salary for retirement. Another popular calculation aims to replace 70% – 90% of your annual pre-retirement income each year until retirement age. By the retirement age, you’ll need to have saved enough to live on in your savings, asset allocation, and social security benefits. Save upwards of 1 to 1.5 million dollars.

To understand how valuable saving with an IRA is, click to see a chart illustrating how much you accumulate with regular, annual IRA contributions at any stage in life. You’ll be able to see the differences in growth depending on when you start and what your interest rate is. See our current IRA rates online.

IRA account - after death

What happens to my IRA savings after I die?

In case of death, you may designate beneficiaries to claim your individual IRA account assets after your death. Any tax-deferred money in a traditional IRA account at the time of death is taxable to your beneficiary upon distributing the inherited IRA funds. A Roth IRA account differs if you held the account for over five years. In this case, the inherited IRA Roth account distributions to your beneficiary are tax-free.

The Takeaway.

IRA accounts are a smart investment account for your future. The best IRA accounts hold your assets and build on them with tax advantages that regular savings accounts can’t offer. It’s best to sit down and review your options with a professional who can help you decide which version works best for you and what qualifications you meet. Start building your retirement savings account now with a Money FCU IRA account.

Keep on growing your retirement fund.

Already retired or quickly approaching retirement? Don’t stop there. Keep growing your retirement savings potential. If you, as an eligible retiree, can continue to make annual contributions, you should do so. See a tax advisor for a solid retirement plan to examine your tax outcome and continued growth potential. Contact Money FCU to speak with a member service specialist and discuss your best IRA investment option.

The Credit Union is where I got my start and has always taken good care of me despite moving 10 different times.

Bruce – Tallahassee, FL
credit union testimonial Kelli

You guys are always so friendly when I call, I love calling all of you because you’re always so upbeat and nice!

Kelli – DeWitt, NY

I started banking with you in 2000, almost 19 years ago. Best bank ever, I moved to CA and you made banking easy when doing electronic banking wasn’t really popular yet.

Jesse – Syracuse, NY

Everything, anything you guys do with me is done 200%. I KNOW that you’ve got my back.  Thank you for this, and for everything you help me with. I truly appreciate it.

Marian – Mahopac, NY

I commend your staff; they are always very pleasant and willing to assist my needs.  Customer Service is very important to me and the credit union definitely shines in this area.

Kathy – Clay, NY

This is by far the best credit union, you guys are so good, you’re always on top of everything and you make me feel like my account is safe.

Regina – Phoenix, NY

I do not say it often enough, but you have great staff!  Nothing is ever a problem, they are terrific!  Amy just helped me out big time and Debbie is always my #1 at the credit union.

Jeff – Wake Forest, NC

I just wanted you to know that it is so nice to get a real person when I call in instead of an automated machine.  I really appreciate it.

Anne – Pittsboro, NC

I just LOVE all of you there. People ask me why I use a credit union in Syracuse and I tell them you can’t beat the customer service!

Denise – Monroe, NY

Thank you for watching for fraudulent activity so diligently.  Not only do you notify me when there is suspicious activity, but you are quick to help recover the money.

Sandy – Liverpool, NY

I’ve been in Charlotte for 7 seven years and I will not change banks because of this type of customer service.

Elliot – Charlotte, NC
credit union testimonial Catherine

Thank you MFCU for all the work you do and for really treating your customers like family.

Catherine – Baltimore, MD
credit union testimonial Michelle

I have to say it again – our credit union is absolutely the best! Hands down, no one else even comes close to the exceptional customer service and knowledge that you receive at Money FCU.

Michelle – Syracuse, NY
credit union testimonial Cindy

I told the car dealer I am sure that I want use Money for financing. The difference is only $7.00 per month. You have the very best customer service of any financial institution that I have worked with. Your customer service is worth every penny of the $7 per month and then some!

Cindy – Tully, NY
credit union testimonial Diane

Each representative takes a special interest in any request made, with coordinating efforts by everyone. At a time when I was in transition, MFCU gave attention to what I needed to continue with them, now over 40 years.

Diane – Wilton, CT
credit union testimonial Michael

I have been a member since 1987 and would NEVER, NEVER, EVER leave Money FCU under ANY circumstances!!

Michael – Clifton Park, NY
credit union testimonial Lisa

I wanted to let you know how much I love having Money instead of Chase! You guys have all been amazing since I have opened my account and I am so happy that I switched!!

Lisa – Syracuse, NY
credit union testimonial Henry

I just love Debbie. She’s my hero!

Henry – Gastonia, NC
credit union testomonial Tony

As we are wrapping details around our third vehicle loan inside of a year or so, I just want to say thank you again. Your customer service is off the charts, and you are a pleasure to deal with.

Anthony – Phoenix, NY
credit union testimonial Pat

Thank you to all of you! You girls are so wonderful! I love my credit union.

Pat – Syracuse, NY
credit union testimonial Lisa too

I thought I would take this opportunity to share with you what phenomenal employees you have. We couldn’t be happier to be blessed enough to have found MONEY FCU, and all that this bank encompasses.

Lisa – Baldwinsville, NY
credit union testimonial Angela

I moved everything out of M & T Bank to you because of the service I receive. I just love you guys!

Angela – Manlius, NY
credit union testimonial Robin

MONEY Federal Credit Union is people – a great group of people – who leave no doubt that while they are helping me, I am the most important thing going on that day.

Robin – Chappaqua, NY
credit union testimonial Jason

I am not sure who is working their magic, but without it my wife and I wouldn’t be able to purchase this house we fell in love with in a neighborhood we fell in love with. I truly appreciate everything Money Federal Credit Union does for my family!

Jason – Baldwinsville, NY

YOU ROCK!!

Kerry – Ossining, NY
credit union testimonial Erik

I have been a member since around 1992 or so and, even though I no longer work at Mutual of New York I have had nothing but excellent service from EVERYONE and I will never stray.

Erik – East Syracuse, NY

When you walk in the door you are always welcomed with a smile and happy greetings. Nothing is ever hard to do. When I need a loan it’s done and ready for me and I don’t even have to do anything! Just come in and sign!

Deb – Liverpool, NY
credit union testimonial Vera

You guys are the greatest. So professional and up to date with technology!

Vera – Warners, NY
credit union testimonial Danielle

I have been banking with MFCU since I was 17 years old. I left NY and banked with other companies but I came back to MFCU. I am so happy that I did!! Your staff has always been so helpful. I just figured you would want to know that your staff is great and they deserve an extra day off :)

Danielle – East Syracuse, NY
credit union testimonial Eileen

You guys haven’t changed a bit since I opened my account in 1987! You are all still so nice to deal with and I’m glad the changing times hasn’t hardened you into being unappreciative of your members. I now live in NJ and you are the best Credit Union I have ever had the pleasure of doing business with!

Eileen – North Arlington, NJ

I remember when I joined the CU in 1980 and you were located in a closet upstairs, and you would write the number of members and the percentage rate on a chalk board on the wall.

Joanne – Syracuse, NY

I just wanted to let you know that your staff has been so helpful since the move out of the building. The staff is always quick and kind. You said that a Credit Union is much like a Bank…I would say that the Credit Union is much better than a bank. I appreciate you guys!!

Michele – Baldwinsville, NY
credit union testimonial Lisa 3

I just wanted to let you know how awesome you are! I tell anyone who’ll listen about the GREAT customer service I get from the MONEY FCU. With commercial banks becoming less and less friendly and helpful and more and more costly, you guys are the best thing around!

Lisa – East Syracuse, NY
credit union testimonials John

I just went through one of the most painless processes getting a home improvement loan. I couldn’t believe how quick and smoothly everything went. I was quite impressed at the level of service. A special thank you also goes out to Debbie for her efficiency and for being so easy to work with!

John – Camillus, NY

I love you guys, one call and it’s done. Love, love, love you all.

Kathy – Fair Lawn, NJ

I just went through the process of taking out a car loan. If it weren’t for Melissa, I wouldn’t have been able to get things done. I wasn’t sure about what to do for so many things, but Melissa did! She was always there for me, quick, soooooo much help. Lucky for me I was smart enough to join your credit union years ago.

Katie – Syracuse, NY
credit union testimonials Meg

I am so grateful to have such kind and helpful people to work with on my banking needs.

Meg – Webster, NY
credit union testimonial Tom

When our office moved I decided to keep my account with you because I don’t mind the 10 minute drive downtown to deal with you guys because you’re always so helpful and friendly.

Tom – Syracuse, NY

Begin my future now. I’m ready to start an IRA account.

Great, let’s get you started! Apply for a Money FCU IRA Account / Retirement Accounts. Want to learn more before applying? Call (315) 671-4000 or chat with our friendly agents. We are ready to answer any of your banking questions.

Open a Roth IRA
Open a Traditional IRA