IRAs are an excellent way to save for the future. Northwoods Community Credit Union has the three types of IRAs, all of which offer the ease and convenience of a simple savings account that earns a competitive dividend rate. The IRA savings accounts dividends are compounded and paid monthly. Choose from the following options:
- Traditional IRAs – Traditional IRAs offer tax-deferred earning, and the possibility for tax-deductible contributions. All earnings in the Traditional IRAs are not taxed until they are withdrawn. The main attraction of Traditional IRAs is the ability to defer taxes on the earnings, and to withdraw in a year when you may be in a lower tax bracket.
- Roth IRAs – Regular contributions to the Roth IRAs can be withdrawn tax-free and penalty-free at any time. After your Roth has been open for five tax years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59 1/2, disability, death, or a first-time home purchase (lifetime limit is $10,000.00 per person).
- Coverdell Education Savings Accounts (ESA) – Formerly known as the Education IRA, the Coverdell Education Savings accounts sole purpose is to help you pay for your child’s education expenses such as: tuition, fees, books, supplies, computer equipment and technology required for elementary, secondary, and post-secondary education. Contributions are not-tax-deductible, but there is potential for tax-free withdrawals including earnings. The funds in the Coverdell ESA can also be transferred from one child’s account to an account for another child in the family.