Individual Retirement Accounts (IRA)

IRA accounts allow you to save for the future and True Sky Federal Credit Union can help you maximize your retirement. In addition to $250,000 in federal deposit insurance through NCUA, your IRA account funds are separately insured by the federal government for up to an additional $250,000 through NCUA.

When it comes to IRAs, there are 4 main types of IRA accounts available. At True Sky Federal Credit Union, we offer 2 types of retirement IRA accounts (Traditional IRA and Roth IRA), an educational IRA account (Coverdell ESA) as well as another type of IRA account that is usually specific to credit unions (IRA Share Savings Account). Continue reading to see the types of IRA accounts we have available for you to invest in.

A Traditional IRA is a special tax-deferred savings plan authorized by the federal government to encourage you to accumulate money for retirement. A Traditional IRA account is a personal savings plan that accounts for earnings to be tax-deferred until distributed. A traditional IRA is the most common type of IRA account used by people.

A Roth IRA allows you to make annual, non-deductible contributions to an IRA account. Unlike a traditional IRA, in which earnings are tax-deferred, Roth IRA earnings can be tax-free. A Roth IRA account is nondeductible, but the interest earned is tax-free if distributed for a qualifying reason. A Roth IRA account must be designated as a Roth IRA at the time it is established. 401k accounts are generally rolled-over to a Roth IRA.

A Coverdell ESA (Educational Savings Account) is a type of IRA account that is designed to help save for a child’s education expenses versus saving for retirement.  The invested funds in a Coverdell ESA can be used for a child’s education expenses such as tuition, fees, books, supplies, equipment, and in some cases, room and board. Any family member or non family member can contribute to a child’s ESA as long as the income falls below the applicable income limits.

Although similar to a 529 Educational Savings Account, there are differences that give a Coverdell ESA an advantage to invest in. A big difference is the responsible individual is the only one who can make withdrawals until age 30 and any balance after that age shall be distributed within 30 days to the beneficiary or transferred to a different family member. The responsible individual shall be a parent or legal guardian of the Coverdell ESA owner.

An IRA Share Savings Account is a type of IRA account that allows you to build up your IRA at low risk. IRA Share Savings Accounts are typically only offered by credit unions and are a great way to diversify your retirement funds. You get the tax advantages of a traditional IRA with the security of a CD.

Make contributions as often as you like, up to the legal limit. Build your IRA account quickly and automatically with payroll deductions.

• Dividends accrue daily and are credited monthly
• Statements mailed quarterly
• Start with as little as $25

Credit union membership will be required.

Roth IRA and Traditional IRA Accounts

From True Sky Federal Credit Union