Individual Retirement Account (IRA)

An Individual Retirement Account could be the key to a worry-free financial future

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An Individual Retirement Account, or IRA, is an account that allows you to set aside money for retirement while getting a tax benefit. The two main types of IRAs are traditional IRAs and Roth IRAs. Each type has a different set of tax advantages, rules, and limits that may make them the right choice for your situation.

Roth IRA Details

You pay taxes on the money you put in the account, but withdrawals are not taxed.
You can withdraw your contributions (but not earnings) at any time without taxes or IRS penalties.
After you reach age 59-1/2, you can withdraw contributions and earnings without taxes.
There are no age limits to open or contribute to a Roth IRA.
There are no required distributions at any time.
Eligibility and contribution amounts could be limited by your income.

Traditional IRA Details

The money you put in the account may be tax deductible, but withdrawals in retirement are taxed.
Contributions can be used to lower your taxable income.
You must begin taking a minimum amount out of the account, called a required minimum distribution, at age 73.
Distributions before age 59-1/2 trigger a 10 percent early withdrawal penalty in addition to being included as taxable income, with a few exceptions for specific circumstances.

IRA Contribution Limits

The contribution limit is the maximum combined amount you may put into traditional and Roth IRAs.

2026 IRA Contribution Limits	Roth Plan	Traditional Plan
Age 49 or younger	$7,500.00	$7,500.00
Age 50 or older*	$8,600.00	$8,600.00

*Once you reach age 50, you are able to contribute up to $1,100.00 more than the regular maximum contribution limit. This is referred to as a catch-up contribution.

You can’t contribute more than you earn.
Contributions for the 2025 tax year can be made until April 15^th, 2026.

IRA Income Limits

Income is measured by your modified adjusted gross income (AGI).
For Roth IRAs, high earners are able to contribute less, and if your income is over the limit you may not be able to contribute at all.

Fixed Rate IRA

Term

Dividend Rate

APY

Open Account

Variable Rate IRA

Term

Dividend Rate

APY

Open Account

Easy Save IRA

Term

Dividend Rate

APY

Open Account

Frequently Asked Questions

What is an IRA at Royal Credit Union?
An Individual Retirement Account, or IRA, is an account that allows you to set aside money for retirement while getting a tax benefit. Royal Credit Union offers two main types: traditional IRAs and Roth IRAs. Each type has a different set of tax advantages, rules, and limits that may make it the right choice for your situation.

What is the difference between a Roth IRA and a traditional IRA?
With a Roth IRA, you pay taxes on the money you put in, but withdrawals are not taxed. You can withdraw your contributions at any time without taxes or IRS penalties, and after age 59-1/2 you can withdraw contributions and earnings tax-free. There are no required distributions at any time.

With a traditional IRA, your contributions may be tax deductible, which can lower your taxable income now, but withdrawals in retirement are taxed. You must begin taking required minimum distributions at age 73.

How much can I contribute to an IRA?
For 2026, the contribution limit is $7,500 if you are age 49 or younger, and $8,600 if you are age 50 or older. The extra $1,100 for those 50 and older is called a catch-up contribution. This limit is the combined maximum you can put into both traditional and Roth IRAs. You can't contribute more than you earn. Contributions for the 2026 tax year can be made until April 15th, 2027.

Can I open an IRA at Royal Credit Union with any amount of money?
Yes. No minimum balance is required to open an IRA at Royal Credit Union. This makes it easy to start saving for retirement regardless of your current financial situation.

Are there income limits for Roth IRA contributions?
Yes. For Roth IRAs, income is measured by your modified adjusted gross income (AGI). High earners may be able to contribute less, and if your income is over the limit, you may not be able to contribute at all. Traditional IRAs do not have income limits for contributions, but the deductibility of contributions may be affected.

How do I decide between a fixed rate, variable rate, or Easy Save IRA?
It depends on how you want to manage your retirement savings. If you want a guaranteed return and don't need to access your funds for a set period, a fixed rate IRA locks in your rate for terms from 9 to 72 months. If you'd prefer a rate that adjusts with the market, the variable rate IRA offers a 24-month term with a rate that may change monthly. And if flexibility is your priority and you want to be able to access your funds without a set term, the Easy Save IRA lets you contribute and earn dividends without locking your money in.