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An individual retirement account (IRA) is among the most profitable savings vehicles available today. If you’re ready to start saving for retirement so that one day you can relax in a hammock, spoil grandkids, take up a new hobby, volunteer or travel the world, we encourage you to consider an IRA.

Here are the three options we offer at Coosa Valley Credit Union.

  • Traditional IRA. This type of account lets you make regular tax-deductible contributions, so saving for your future doesn't strain your wallet today. Your full contribution earns dividends on your behalf. With a traditional IRA, you don’t pay taxes now on the money you are saving. And your money earns compounding interest. When it's time to begin drawing funds from a traditional IRA, you'll pay regular income tax on your withdrawals. Since you will be paying taxes based on the tax bracket you are in at the time of your retirement, you should consider the fact that you may be paying a higher rate than you are paying today. With a traditional IRA, you must begin withdrawing the money by age 70 ½. 
  • The Roth IRA Roth IRAs are favored by many tax advisors because you pay taxes on your contributions now, rather than when you begin taking deductions from it during retirement. That means you get your tax obligation out of the way. When you retire and begin withdrawing the funds, you don't pay taxes again. The implied assumption is that you're in a lower income tax bracket today than you will be when you clock out of work for the last time. However, not everyone is eligible to invest in a Roth IRA. Discuss the requirements with a tax attorney.
  • Coverdell Education Savings Account. If you’re planning a family, you’re wise to consider saving for their college education early. Parents should check out the Coverdell Education Savings Account, a vehicle that lets you contribute up to $2,000 per minor per year. Yes, you'll pay taxes as the contributions go in, but the funds (and their earnings) grow tax-free while your family and the account matures. Then, when your child heads off to college, your Coverdell ESA distributions can cover many qualifying expenses.

As you learn about the deposit account options available, refer to Coosa Valley Credit Union’s APY rate page for each savings vehicle.

If you have questions about how to invest for your future, don’t let the details lead to analysis paralysis. Your neighborhood credit union family is standing by with answers to questions that are unique to your lifestyle and goals. Call us today.