Traditional & Roth Individual Retirement Accounts (IRAs)
How do you choose which IRA option is right for you? It depends in large part on your individual circumstances. A traditional IRA offers tax-deferred growth for your money and may provide a current tax break. With a Roth IRA, contributions are not tax deductible; however, your earnings may be tax-free in a Roth IRA.
Here's what you need to think about when choosing an IRA:
- Your current tax bracket and the one you expect to be in during retirement. This will affect the relative value of a current tax deduction versus taxes that may be due in retirement.
- Other retirement assets available. If you have enough income from other sources to fund your retirement and want an account to build assets for future generations, a Roth IRA might be your choice. Unlike a Traditional IRA, it has no requirement that you begin taking minimum distributions at a certain age.
- The length of time until you retire. Over time, the future savings of tax-free withdrawals may become more valuable than the current savings available from a deduction.
Traditional IRA
- Dividend earnings are tax deferred until withdrawn
- Contributions are tax deductible on current returns1
- No income limits
- Anyone under age 70½ can open
- Penalty-free withdrawals can begin at age 59½2
- Mandatory withdrawals begin at age 70½
Roth IRA
- Dividends grow tax free
- Earnings are 100% tax free upon withdrawal (account must be open at least 5 years)
- Income restrictions to open account
- Contributions not earnings can be withdrawn penalty free at any time
- Penalty-free withdrawals on dividend earnings at age 59½2
- No required minimum distributions after age 70½
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IRA: Savings or Certificate
At Silver State Schools Credit Union, both the Traditional IRA and Roth IRA can be opened either as a savings account or as a certificate. A savings account offers members the ability to earn dividends with the flexibility to access3 their funds at any time. A certificate offers members the opportunity to earn a higher dividend rate for added tax-deferred earnings for a term that is right for their needs.
| IRA SAVINGS |
IRA CERTIFICATE |
JUMBO IRA CERTIFICATE |
| Earns dividends4 at a variable rate |
Earns dividends5 at a fixed rate |
Earns dividends5 at a fixed rate |
| No monthly maintenance fee |
No monthly maintenance fee |
No monthly maintenance fee |
| No minimum balance requirements |
Terms from 12-60 months |
12 or 24 month term |
| No minimum deposit to open |
$500 minimum deposit to open |
$100,000 minimum deposit to open |
| $25 fee to open/close |
$25 fee to open/close |
$25 fee to open/close |
Deposit Rates
Traditional, Roth, & Education IRA Savings| Minimum Balance to Earn Dividends | Rate | APY* |
|---|
| $0.00 - $2,499.00 | 0.25% | 0.25% | | $2,500.00 - $24,999.00 | 0.25% | 0.25% | | $25,000.00+ | 0.25% | 0.25% |
Traditional, Roth, & Education IRA Certificates| ($500.00 Minimum Deposit to Open) |
|---|
| Term | Rate | APY* |
|---|
| 12-23 months | 0.30% | 0.30% | | 24-35 months | 0.45% | 0.45% | | 36-47 months | 0.55% | 0.55% | | 48-59 months | 0.85% | 0.85% | | 60 months | 1.00% | 1.00% |
Jumbo IRA Certificates| ($100,000.00 Minimum Deposit to Open) |
|---|
| Term | Rate | APY* |
|---|
| 12 months | 0.35% | 0.35% | | 24 months | 0.45% | 0.45% |
1 Consult a tax advisor.
2 Certain exceptions apply where early withdrawals do not incur penalties, such as for healthcare and purchasing a first home among others.
3 No more than 6 preauthorized, automatic, or telephone transfers may be made from each account to another account or to a third party in any month.
4 Compounded and credited monthly using the daily balance method.
5 Compounded and credited monthly. If you elect to have dividends paid to you by check, or transferred to another account, compounding will not occur.
See complete account disclosures.
*Annual Percentage Yield
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