• Traditional IRA
  • Roth IRA
  • SEP IRA

Traditional IRA

A Traditional IRA is a simple way to save for retirement that offers immediate tax advantages. You can contribute money on a tax-deferred basis each year.

With a Traditional IRA, you get:

  • The opportunity to lower your tax liability. Contributions may be tax deductible depending on your participation in a qualified retirement plan and on your adjusted gross income.
  • Tax-deferred growth. You don't pay taxes on your earnings until you withdraw money.
  • A wide range of options from which to choose to meet your individual needs.
  • Flexibility to invest as much as you'd like up to annual limits.

Click here for information about deposit IRAs. For other retirement options and how they fit into your overall financial plan, contact your LGFCU Financial Planners at 877.367.5428 or financialplanning@lgfcu.org.

Roth IRA

The Roth IRA was created to let you earn retirement money tax-free on your investments. It enables you to make nondeductible contributions into a retirement account whose earnings grow tax-free and can be withdrawn tax-free at retirement. In contrast, traditional IRA earnings are taxed when withdrawn.

Roth contributions are made with after-tax dollars and are not deductible. A Roth IRA offers:

  • Tax-free growth. Don't ever pay federal taxes on your earnings (certain restrictions may apply).
  • No annual distribution requirements. You don't have to withdraw money until you're ready for retirement, regardless of age.
  • Flexible contributions. You can keep contributing after retirement (beyond age 70½), as long as you have earned income.
  • A wide variety of options from which to choose to meet your individual needs

Click here for information about deposit IRAs. For other retirement options and how they fit into your overall financial plan, contact your LGFCU Financial Planners at 877.367.5428 or financialplanning@lgfcu.org.

SEP IRA

A SEP (Simplified Employee Pension) IRA is ideal for self-employed individuals and for small businesses, including nonprofit organizations and owners who want to offer a retirement package without assuming the requirements of more complex plans. Employers make tax-deductible contributions, while employees themselves do not make contributions to their SEP IRA.

With a SEP IRA, you can

  • Take advantage of company contributions
  • Enjoy accumulating tax-deferred earnings

How does a SEP IRA work?

  • Employer must complete and sign a 5305-SEP agreement by the tax return date (plus extensions).
  • Employer must give each employee a copy of the agreement and any other pertinent information.
  • All eligible employees must open an SEP at their institution of choice.
  • Employer will decide annually what percentage of the employee's income to contribute.
  • Contributions/Distributions:
    • Maximum contribution cannot exceed 25 percent of employee's income (up to $52,000 for the 2014 tax year, or $51,000 for the 2013 tax year).
    • All contributions must be made by the employer's tax return due date (plus extensions).
    • Contributions can be made on behalf of an eligible employee after age 70½.
    • Traditional IRA distribution rules apply.

Click here for information about deposit IRAs. For other retirement options and how they fit into your overall financial plan, contact your LGFCU Financial Planners at 877.367.5428 or financialplanning@lgfcu.org.

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