IRA (Individual Retirement Account)
Your Legacy Federal Credit Union has two IRA products available: a Traditional IRA and a Roth IRA.
How is a Traditional IRA different than a Roth IRA?
- With Traditional IRAs you can make contributions until you turn 70 ½. Roth IRAs you can contribute at any age as long as your taxable income is below the IRS guidelines.
- The contributions made to a Traditional IRA can be deducted from your taxable wages on your income tax return, if you qualify. Contributions made to a Roth IRA cannot be deducted.
- Participants in a Traditional IRA must take distributions by April 1 following the year they turn age 70 ½ and by December 31 each year after. For Roth IRA participants there are no distributions requirements as long as you are the original owner.
- Traditional IRA withdrawals and distributions of the principal are taxable vs. Roth IRA withdrawals and distributions which are not taxable. However, if you are under 59 ½ will have to pay a 10% penalty tax for early withdrawals for both Traditional and Roth IRAs. Unless the early withdrawal is because of death or disability, or it is used for one of the following items:
- Qualifying higher education expense
- Buying your first home, up to $10,000
- Unreimbursed medical expenses, greater than 10% of your Adjusted Gross Income
How can I invest my IRA?
- You can invest in our traditional Savings Account
- Or you can invest in one of our Certificates of Deposit
Both options are available for both Traditional and Roth IRAs.