Individual Retirement Accounts (IRAs)

There are two Individual Retirement Account (IRA) options available—traditional and Roth. Both come with a unique set of advantages and disadvantages on the tax front, which we encourage you to explore in further detail with a trusted tax advisor.

All IRAs are insured for up to $250,000 by the National Credit Union Administration.

Traditional and Roth IRA account holders are permitted to make a maximum annual deposit of $5,500 (this maximum annual deposit increases to $6,500 for those age 50 and older).

Learn more about IRA contribution requirements and restrictions below.

Traditional IRAs

  • Account holders will incur a 10% penalty tax on all funds in their Traditional IRA if they make withdrawals before the age of 59 ½
  • Account holders cannot make contributions past age 70 ½
  • Withdrawals, referred to as “required minimum distributions,” must begin at age 70 ½

Roth IRAs

  • As with Traditional IRAs, Roth IRA account holders will incur a 10% penalty tax if they withdraw funds before the age of 59 ½
  • There is no age limit for deposits
  • There are no age withdrawals required—money may be left in the account until its owner’s death

Coverdell Educational Savings Account

Coverdell Educational Savings Accounts (ESAs) are designed to help prepare for the college-related expenses you and your loved ones will face in the future.

Here are a few requirements and restrictions to bear in mind when opening an ESA:

  • Account holders may make a maximum annual deposit of $2,000 per child
  • Contributions are not tax deductible—however, if fund distributions follow Coverdell ESA guidelines, they may not be taxed on disbursement
  • Account holders will incur a 10% penalty tax on funds withdrawn early for reasons other than qualified educational expenses
  • Child must use ESA funds before age 18
  • Account holders cannot make contributions after their child has reached 18 years of age
  • Withdrawals must begin at age 30, or on the account holder’s death

Health Savings Account (HSA)

Health Savings Accounts (HSAs) are the perfect vehicle for guarding against any unforeseen medical expenses that may not be covered by your insurance provider.

It’s important to keep the following information in mind if you’re trying to open an HSA:

  • You must have a high deductible insurance plan in order to qualify
  • These funds are intended to house pre-tax money to support medical-expenses only
  • Unspent balances will remain in the accounts until they are spent—there is no “use it or lose it” rule in place—balances that have not been utilized will not be deducted from

Employers and other interested parties are allowed to make contributions to your HSA, with your consent.