Individual Retirement Accounts (IRAs)

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Don't wait for the future to start saving for it. An IRA from FAA FCU helps you set aside while earning dividends above standard savings, in advance of your retirement. If the prospect of a fulfilling retirement isn't enough, the associated tax advantages* of our traditional and Roth options should sweeten the deal.

You can also set aside for your children in a tax-advantaged Education Savings fund to make the prospect of paying for college a lot more digestible.

Summary

Competitive dividends above standard savings rates
Traditional and Roth IRA options
No setup fees
No monthly or annual maintenance fees
Annual contribution limits apply
Additional $1,000 "catch-up" contribution allowed for ages 50+
Funds can be used to purchase share certificates within IRA
$5 minimum deposit to open

*Consult a tax advisor.

Traditional vs. Roth

There are advantages to both traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.

Traditional IRA

No income limits to open
No minimum contribution requirement
Contributions are tax deductible on state and federal income tax*
Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
Withdrawals can begin at age 59 ½
Early withdrawals subject to penalty**
Mandatory withdrawals at age 70 ½

Roth IRA

Income limits to be eligible to open Roth IRA***
Contributions are NOT tax deductible
Earnings are 100% tax free at withdrawal*
Principal contributions can be withdrawn without penalty*
Withdrawals on dividends can begin at age 59 ½
Early withdrawals on dividends subject to penalty**
No mandatory distribution age
No age limit on making contributions as long as you have earned income

*Subject to some minimal conditions. Consult a tax advisor.

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

***Consult a tax advisor.

Coverdell Education Savings Account (ESA)

Create an easier transition into college for yourself and your student by setting aside savings early. A Coverdell Education Savings Account (ESA) provides a tax-free safe place to grow competitive dividends and also financial confidence for a new stage in life.

Set aside funds for your child's education
No setup or annual fee
Dividends grow tax-free
Withdrawals are tax-free and penalty-free when used for qualified education expenses*
Designated beneficiary must be under 18 when contributions are made
To contribute to an ESA, certain income limits apply**
Contributions are not tax deductible
$2,000 maximum annual contribution per child
The money must be withdrawn by the time he or she turns 30***
The ESA may be transferred without penalty to another member of the family
$5 minimum deposit to open