SOUTHERN FEDERAL CREDIT UNION

Office: 713-232-7774     Fax: 713-232-7122

         
   
 
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IRA Accounts

Below are listed the different types of IRAs that your credit union offers. For more information check out the online brochures in the IRA Resource Center.

Traditional IRAs
A traditional IRA allows your earnings to grow tax deferred, so you won’t owe income taxes until you make withdrawals. And if you’re eligible, your contributions are tax deductible. Deductible contributions and earnings are then taxed at your regular income tax rate when the money is withdrawn.

To qualify to make tax-deductible contributions to a traditional IRA you must be less than 70½ years old and have received compensation (in general, income earned from working). From there, you’re automatically eligible if neither you, nor your spouse if you’re married, are covered by an employer-sponsored retirement plan – no matter how high your income.

With federal share insurance through NCUA, these types of accounts are insured separately up to $250,000.

Roth IRAs
If you’re eligible to contribute, your earnings in a Roth IRA grow tax free and are also tax free when you make qualified withdrawals. In addition, Roth IRAs have more flexible withdrawal rules than traditional IRAs.

Don’t Cash Out, Roll it Over!
Rollover your retirement plan dollars into an IRA.

If you leave your job or retire, and you have earned benefits in a Traditional Qualified Retirement Plan, you can keep the tax-deferred status of the funds by rolling them over directly into a Traditional IRA. You may also choose to roll the funds into a Roth IRA; however, you are required to pay taxes on all or most of the amount rolled over. In exchange for paying taxes now, you gain the opportunity to receive tax-free distributions in retirement. Because choosing the best option is complicated, we recommend consulting a tax professional before taking action.

With federal share insurance through NCUA, these types of accounts are insured separately up to $250,000.

Coverdell Education Savings Accounts (ESAs)
Seeing a child get a good education is every parent’s dream. But you may be wondering how you’ll pay for rising elementary, high school and college education costs. An Education Savings Account (ESA) may be your answer.

As long as you meet the income requirements, anyone including grandparents, aunts, uncles, and family friends can open and contribute to your child’s account.

Health Savings Accounts (HSAs)
HSAs are individually-owned accounts which allow you to make tax-deductible contributions, accumulate earnings on a tax-deferred basis, and withdraw money tax free to pay for qualified medical expenses.

HSAs are designed for individuals who have chosen a high-deductible health plan (HDHP). The funds in your HSA can be used to pay for qualified medical expenses until the deductible has been met and insurance kicks in. HSAs can also be used to cover qualified medical expenses that are not paid by insurance, even after the deductible has been met.