Individual Retirement Accounts
No matter where you are in life, there are steps you can take today to ensure a more comfortable future for you and your loved ones.
Let PSECU help. We offer a range of retirement savings options - including IRA plans - that can get your money working for you and provide you with a path to financial freedom.
Types of IRAs
PSECU offers the following types of retirement savings accounts:
- Traditional IRA, which allow you to defer a portion of your taxable income toward your retirement savings
- Roth IRA, which offer tax-exempt withdrawals at any time during retirement
- Coverdell Education Savings Account, which are a type of IRA that sets up a tax-deferred educational trust for your children or another beneficiary
Check out our current rates on the chart below, or contact a PSECU IRA Specialist directly for assistance.
Roth vs. Traditional IRAs*
Traditional and Roth IRAs are similar in many ways. Both have the same contribution limits and similar terms, such as:
- A maximum annual contribution amount of $5,500, or 100% of employment compensation, whichever is less, for anyone under 50
- A $1,000 "catch up" provision that allows anyone over 50 to contribute as much as $6,500 annually
- Contributions can be made up to the day taxes are due (April 15 in most years)
Beyond these basics, however, there are several key differences between Roth and traditional individual retirement accounts. These include:
- Income eligibility. Anyone can open a traditional IRA. However, to open a Roth IRA, there are income eligibility requirements. Individuals must have a Modified Adjusted Gross Income (MAGI) of less than $118,000 to make a full contribution, and no more than $133,000 to make a partial contribution. Families must have a MAGI of less than $186,000, or between $186,000 and $196,000, to make a full or partial contribution, respectively.
- Tax benefits. A key distinction between traditional and Roth IRAs is the tax incentives they offer. With a traditional IRA, your annual contribution can be deducted from your state and federal returns. However, when your savings are withdrawn at retirement, they are taxed as income. A Roth IRA in most cases allows any money you earn or withdraw from them to be tax-free.
- Withdrawal rules. The other major difference between traditional and Roth individual retirement accounts is that, while a traditional IRA requires you to start taking minimum withdrawals at age 70 ½, a Roth IRA does not. This means that, if you wish, your savings can continue to sit in your account and generate tax-free income for as long as you live.
A number of different factors will determine which type of IRA is best for you. Retirement savings can be intimidating, but with us in your corner, you will be well positioned to make smart choices. Get in touch to start the process today.
Rates valid as of 8/23/2017 11:12 PM
*APY denotes Annual Percentage Yield
Rates and information are subject to change at any time. Recurring deposits may be made into the certificate through automatic transfers (ATS) only. You may set up recurring deposits through ATS within 30 days after the certificate is purchased. Deposits can be stopped or reduced at any time. This rate will be paid until the certificate matures. Your certificate will automatically renew at the rate in effect at the time of maturity unless we are contacted on or before the maturity date. Upon renewal, the term will be the same as the original term. You have ten calendar days after maturity to redeem your certificate without penalty if you do not want to renew. Dividends will not accrue on the certificate after the maturity date unless it is renewed. A penalty will be imposed for early withdrawal. A minimum daily balance of $500 must be maintained in order to earn the disclosed APY.
**The content provided is for informational purposes only. Nothing stated is to be construed as financial or legal advice. PSECU recommends that you seek the advice of a qualified financial, tax, legal or other professional if you have questions.