Individual Retirement Accounts (IRAs) are a smart way to save for the future. A traditional IRA can be opened and funded without any employer participation. Contributions and/or earnings are tax-deferred until retirement. Unlike many employer plans, money in the account is always accessible; however, until age 59½ there is a 10 percent early distribution penalty unless you qualify for an exemption due to one of the following: disability, qualifying education expenses, unemployment, qualifying first-home purchases, death, or receipt of your IRA assets in equal payments over your life expectancy.
Roth IRAs differ from Traditional IRAs in that the money you contribute to a Roth IRA has already been taxed. So the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines. This retirement plan allows the money you contribute to grow tax-deferred.
If you do not withdraw any of the earnings until you have had the plan for at least five years, or satisfy one of the qualifying events, those tax-deferred earnings become tax-free. Unlike the traditional IRA, there is no 70½ age limit on making contributions.
University Health FCU offers a share saving IRA that pays the same quarterly interest rate as share savings accounts.
Your IRA investment is separately insured to $250,000 by NCUA.