Individual Retirement Accounts IRAs

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Traditional IRA

With a traditional IRA, eligible contributions are made tax-free and are only taxed when withdrawn during retirement, ideally when you're in a lower tax bracket. There is no age restriction for Traditional IRAs, so anyone at any age can contribute if they are still working. Traditional IRAs are also subject to Required Minimum Distributions (RMDs) starting at age 72. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

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Roth IRA

With a Roth IRA, contributions are taxed. However, qualified distributions are tax-free, regardless of your tax bracket or income level. Roth IRAs are also subject to income limits, restricting how much you can contribute depending on your earnings and filing status. Additionally, Roth IRAs are not subject to RMDs, allowing funds to grow throughout your lifetime, effectively fund education, and even transfer to beneficiaries.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

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Representatives are neither a tax advisor nor attorney. For information regarding your specific tax institution, please get in touch with a tax professional. For legal questions, including a discussion about estate planning, please consult your attorney.

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Education First Financial Group are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Education First Financial Group, and may also be employees of Education First Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Education First Federal Credit Union. Securities and insurance offered through LPL or its affiliates are:

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