IRAs can build the foundation for your retirement plan

Just because it isn't hip or trendy doesn't mean it isn't important.

You have a go-to hoodie or shirt for just relaxing and lounging around, right? Sure, everyone does! And while you probably wouldn't describe it as "exciting," it sure is great to have around. That's kind of the same thing with IRAs. Though not flashy, IRAs are a fundamental building block for your investment portfolio and your retirement story. Royal Credit Union offers a wide variety of IRAs that you can open for as little as $5!

Traditional IRAs

Eligibility. Anyone under age 70 1/2 with earned income is eligible.

Annual Contribution. Your contributions can't exceed $5,500 or 100% of earned income, whichever is less. If you're over 50 years old, you're allowed a "catch-up;" but it can't exceed $6,500.

Tax Benefits. Certain contributions are tax deductible. Interest is tax-deferred.*

Withdrawals. IRS penalty-free Options:

  • For qualified educational expenses
  • For first-time home purchase
  • At or after age 59 1/2
  • If you become disabled
  • For qualified medical expenses
  • For payment of health insurance premiums while unemployed
  • Upon your death
Roth IRAs

Age Eligibility. No maximum age with these. Anyone who has earned income and does not exceed the maximum income limit is eligible.

Income Eligibility. If your MAGI (Modified Adjusted Gross Income) falls within a phase out range below, you will need to calculate how much, if any, you can contribute to a Roth IRA. The phase out ranges for contributions are:

  • Single: $112,000 - $127,000
  • Married (filing joint tax return): $178,000 - $188,000
  • Married (filing separate tax return): $0 - $10,000

Contribution Limits. Total of all IRA contributions (Traditional and Roth combined) cannot exceed $5,500 or 100% of earned income, whichever is less for any tax year. If you are over 50 years old, you are allowed a "catch-up;" but contributions cannot exceed $6,500.

Tax Benefits. Your account grows tax-deferred, and qualified distributions are tax free.*

Withdrawals. Withdrawals of contributory principal are always tax-free and IRS penalty-free at any age. Interest distributions are tax-free for qualified withdrawals. Required Minimum Distributions (RMD) are NOT required on Roth IRAs at or after age 70 1/2.

IRA Rates

Fixed IRAs (Invest $1,000 or More)
1 Year Term DR:1.05% | APY:1.06%**
18 Month Term DR:1.15% | APY:1.16%
30 Month Term DR:1.50% | APY:1.51%
4 Year Term DR:1.75% | APY:1.76%
6 Year Term DR:1.75% | APY:1.76%
 

Easy Save IRAs (No Royal Credit Union Penalty on Withdrawals)
Invest $5 - $2,499.99 DR:0.53% | APY:0.53%
Invest $2,500 or More DR:0.58% | APY:0.58%
 

Variable Rate IRA (Invest $5 or More)
2 Year Term (Rate Changes Monthly) DR:0.75% | APY:0.75%

The Fine Print

*Remember, consult a tax professional for the details.

**DR= Dividend Rate APY= Annual Percentage Yield Rates current as of 2016-04-21. Last changed on 2015-12-18. Rates are subject to change at any time without notice. Substantial penalty for early withdrawal.

View our disclosures and service fees.