Individual Retirement Account
When you retire from the working world, you'll have another chapter of your life to write.
Make that story a happy one with the help of a tax-advantaged savings account.
Your Golden Years start right here
Choose Traditional or Roth IRA
Education savings accounts also available
Enjoy wide range of tax benefits
No monthly or annual fees
Make sure you discuss IRA options with your tax advisor so you get the full details on tax advantages.
With smart planning, you can make every moment count
Travel and adventure. Friends and family. Simple relaxation. Your retirement lifestyle is likely to include all of the above. Save up enough money to check off every item on your wish list by opening a Neighbors FCU IRA, making yearly contributions and growing your nest egg with the help of steady dividend earnings.
Traditional IRA
- Individuals are eligible to contribute to an IRA if they earn compensation or file a joint tax-return with a spouse who earns compensation
- Contribute up to $7,000 annually (Up to $8,000 if you're over age 50)
- Potential income tax deductions for each year you make a contribution
- Annual interest income is tax-deferred
- Account holders cannot withdraw funds before age 59 ½ without a 10 percent early withdrawal penalty
- Withdrawals are always subject to income tax regardless of age
- You may continue contributing to your Traditional IRA at any age
- You are required to take annual distributions from your Traditional IRA beginning at age 73
- An IRA owner's required minimum distribution (RMD) is based on the account's year-end balance and the owner's age
Roth IRAs
- Contributions to a Roth IRA are not tax deductible
- Annual interest earned on a Roth IRA is tax-deferred
- Account holders cannot withdraw funds before age 59½ without a 10% early withdrawal penalty
- After age 59 ½, account holders can take tax-free and penalty-free distributions
- You may continue to contribute to your Roth IRA at any age
- Individuals with a Roth IRA are not required to take minimum distributions at any age
Coverdell Education Savings Account (CESA)
Retirement is one of life's important milestones. So is sending children to college. Coverdell accounts - also known as Education IRAs - can help cover the cost of private K-12 schooling or higher education.
- Contribute up to $2,000 per year until student reaches age 18
- Contributions are not tax deductible, but annual dividend earnings are tax-exempt and qualified withdrawals are tax-free
- Funds may be use for tuition, room and board, fees, and academic equipment, such as laptop computers
- Any family member - parents, grandparents, aunts, uncles, etc. - may contributed to a child's CESA
- Funds can be transferred from one child’s account to another within the same family
Individual Retirement Account FAQs
An IRA Certificate is a fixed-term investment that can offer higher interest rates than a regular savings account, making it a great tool to kickstart your retirement savings.
The key feature of an IRA Certificate is its fixed interest rate and term. You have the guarantee of a certain return over the duration of the certificate, typically ranging from 3 months to 5 years. This makes it a great choice if you prefer stability and predictability in your investments.
IRA Certificate vs. Traditional CD
When planning for retirement, you might come across both Individual Retirement Account (IRA) Certificates and traditional Share Certificates. While they might seem similar, there are key differences that could impact your long-term financial goals.
One of the main differences is the tax advantages offered by an IRA. Contributions made to an IRA may be tax-deductible, and the earnings grow tax-deferred until you withdraw during retirement. Traditional Share Certificates, however, do not offer any specific tax advantages. You should speak to a tax professional to determine if an IRA Certificate might be right for you.
Choosing the right term and interest rate for your IRA Certificate is crucial. We offer various term options, ranging from 6 months to 5 years. Longer terms often offer higher interest rates, but consider your financial goals and risk tolerance when making this decision.
Managing your IRA Certificate involves monitoring its performance and deciding what to do with the funds when the certificate matures. Regularly reviewing your IRA Certificate can help you assess whether it’s meeting your investment goals.
Yes! An existing IRA doesn’t prevent you from opening an IRA Certificate. In fact, an IRA Certificate can be a great addition to your retirement savings strategy, offering a fixed interest rate and a guaranteed return over a specific period.
If you withdraw funds from your IRA Certificate before the maturity date, you may face penalties or forfeit some of the interest earned. The exact penalties depend on the specific terms of your IRA Certificate. Therefore, consider your investment goals and financial needs before making any early withdrawals.
When planning for your retirement, an IRA Certificate can be a great investment option. However, it’s crucial to evaluate your financial goals, compare it with other investment options, and understand your risk tolerance and time horizon before making a decision. Doing so can ensure that an IRA Certificate aligns with your needs and helps you achieve your long-term financial objectives.
Neighbors Federal Credit Union is a full-service financial institution with branches serving the Southeast Louisiana parishes of Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge and West Feliciana.
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- Free accounts
- Mascot accounts
- Earn dividends
- Visa debit card for easy purchases
- Online and Mobile Banking tools