IRAs

Allegan Credit Union offers both Traditional and Roth IRAs.

We’re always ready and happy to help… first by making sure you know that there are tax and investment experts better suited to guide you through choosing your best path. We recommend meeting with an expert in one of those fields to decide what kind of IRA is right for you.

Annual IRA contribution limits apply, and early withdrawals are subject to tax penalties.

Traditional IRA

A Traditional IRA offers tax-deferred earnings and the possibility for tax-deductible contributions. All earnings in the Traditional IRA are not taxed until they are withdrawn.*

Roth IRA

The Roth IRA allows you to contribute after-tax dollars with earnings growing tax free (depending on your income). You pay no taxes when you withdraw the money, provided you have had the account for at least five years and you’re 59 or older. In addition, you may withdraw without penalty, up to $10,000 for a first-time home purchase. Another Roth IRA benefit is that you don’t have to begin withdrawing money at age 70 1/2, unlike a traditional IRA.*

What is the difference between an Individual Retirement Account and the retirement account provided by an employer?

An IRA account at the credit union is an insured tax shelter. You can make deposits into it and have them insured up to $500,000. The rate of return on IRAs at the credit union are set by the credit union and you have a choice to use the IRA Share Savings, and/or an IRA Certificate of Deposit. Your employer would be the best source of information on what they offer.

How much can I contribute annually to my Individual Retirement Account?

This amount is determined by the IRS and can be found here: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

Can I withdraw funds or take a loan from my Individual Retirement Account?

You can take a withdrawal at any time, but there may be tax implications for doing so if it is before retirement age. We do not provide loans from IRAs at the credit union.

What are the potential tax benefits of an Individual Retirement Account?

Both Traditional and Roth IRAs provide tax breaks. But it’s a matter of timing when you get to claim them. Traditional IRA contributions are tax-deductible on both state and federal tax returns for the year you make the contribution; withdrawals in retirement are taxed at ordinary income tax rates. Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free. Please consult your tax professional or financial planner for further guidance.