Traditional & Roth IRAs

Needs vary when it comes to selecting an IRA, depending on where you are in life and how you want your funds to be taxed after retirement. It’s never too late (or too early) to start planning for your future, so consider opening an IRA today!

An Individual Retirement Account, or IRA, is one of the smartest, most tax-efficient ways to save for retirement.
Both Traditional and Roth IRAs offer substantial tax savings, but each has its own uses, advantages, and guidelines (see table below).
Your accounts insured by the National Credit Union Share Insurance Fund to at least $250,000. Visit mycreditunion.gov to learn more about your Share Insurance Coverage and to access resources including a Share Insurance estimator tool, publications, videos, and more.

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Contributions

The maximum amount you can put aside annually for an IRA varies by the year in which your contributions are made, and is dependent upon your income and marital status. If you are turning 50 in the tax filing year, you can also benefit from additional catch-up contributions. IRA contributions must be made by your tax filing date.

Direct Transfers and Rollovers

Moving funds to an HVCU IRA from another qualifying plan is simple and may be processed as a transfer or rollover. You may want to consider consulting with a tax advisor to help decide which is best for you:

Direct Transfer- Funds are sent direct from another IRA to HVCU.

Direct Rollover- Funds are distributed from a qualified retirement plan and deposited into a comparable IRA plan.

Indirect Rollover- Funds are distributed directly to you and must be deposited into an IRA account within 60 days to avoid being taxed.

Beneficiaries

When establishing a new IRA plan you will designate your beneficiary and any additional shares under that plan will have the same beneficiary. If you wish to change your beneficiary on an existing plan, please complete the (IRA Designation of Beneficiary) form.

Compare Traditional & Roth IRAs

	Traditional IRA	Roth IRA
Maximum annual contributions allowed per individual	2022: $6,000 2023: $6,500	2022: $6,000 2023: $6,500
Maximum annual contributions allowed per married couple	2022: $12,000 2023: $13,000	2022: $12,000 2023: $13,000
Maximum catch-up contributions allowed per individual turning 50 in the taxable year	$1,000	$1,000
Who can contribute?	Individuals/spouses with earned income. Refer to IRS guidelines.	Individuals/spouses with earned income. Refer to IRS guidelines.
Are contributions tax deductible?	Contributions may be tax deductible. Refer to IRS guidelines.	No, deposits are not tax deductible.
How long can I contribute?	No age limit, provided you our your spouse have earned income.	No age limit, provided you our your spouse have earned income.
When are distributions allowed?	A penalty free distribution can be made upon reaching age 59 ½. Refer to IRS guidelines for other qualified distributions not limited to reaching age 59 ½.	A penalty free distribution can be made if the account has been opened for five successive tax years. A penalty free distribution can be made upon reaching age 59 ½. Refer to IRS guidelines for other qualified distributions.
Are allowable distributions taxed?	Yes	Account is tax free if funds have been held for five successive years, or you reach age 59 ½. Refer to IRS guidelines for other qualified distributions.