Individual Retirement Accounts (IRA)
Raise your hand if you want to retire comfortably. Raise your hand if you like big tax breaks. OK, that's two hands raised, so clearly we're all on the same page.
The sooner you get started contributing to your IRA, the more secure your future will be. CP Federal makes it easy with a low minimum to open and no annual fee. Enjoy competitive dividends and federal insurance. So put down your hands to click "Apply Now" today.
- Summary
- Tax-advantaged retirement savings
- Competitive dividend rates
- Traditional and Roth IRAs
- Automatic transfers and/or payroll deposits available
- No setup fees
- Low $10 annual fee
- $5,000 contribution limit per year
- Additional $1,000 "catch-up" contribution allowed for ages 50+
- Funds can be used to purchase CDs within IRA
- $50 minimum deposit to open
- Funds federally insured just like savings accounts
- Traditional vs. Roth
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There are advantages to both traditional and Roth IRAs. One of the biggest differences is when you see the most tax advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.
Traditional IRA
- No income limits to open
- Contributions are tax deductible on state and federal income tax*
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Withdrawals can begin at age 59½
- Early withdrawals subject to penalty**
- Mandatory withdrawals at age 70½
Roth IRA
- Adjusted gross income must be less than $122,000 to contribute ($179,000 for joint filers)
- Contributions are NOT tax deductible
- Earnings are 100% tax free at withdrawal
- Principal contributions can be withdrawn without penalty*
- Withdrawals on interest can begin at age 59½
- Early withdrawals on interest subject to penalty**
- No mandatory distribution age
*Subject to some minimal conditions. Consult a tax advisor.
**Certain exceptions apply, such as healthcare, purchasing first home, etc.
- Educational Savings Account (ESA)
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Save for any post secondary education by investing up to $2000 a year per child younger than 18. Contributions may be made by any family member. The contribution is NOT tax deductible. Instead, earnings grow tax-free and you pay no taxes or penalties on money withdrawn to pay for qualified higher-education expenses, before the beneficiary reaches age 30. Certain restrictions apply.
