The Roth IRA lets you earn retirement money tax-free on your investments.
With a Roth IRA you fund your retirement savings account with after-tax dollars. Later, during your retirement years, you’ll still pay no taxes on distributions — including your investment earnings.
How a Roth IRA works
With an LGFCU Roth IRA, you only need a $25 minimum deposit to open your account and to maintain the required minimum balance. Ongoing contributions are not required. If you choose to make ongoing contributions, the Credit Union makes it easy to do so, using recurring Funds Transfer.
Dividends, which some financial institutions call interest, are compounded daily and paid monthly. There is no charge to open or service the account unless the account balance falls below $25. Then a service fee of $1 will be charged. A monthly statement is available for your convenience.
Rates and annual percentage yields (APY) are subject to change daily. Funds may not be borrowed or used as security for a loan. Contributions can be withdrawn tax- and penalty-free at any time. However, earnings can only be withdrawn tax- and penalty-free after five years from the date the account was opened. In addition, the account owner must be at least age 59 1/2. A 6% non-deductible Federal excise penalty may be imposed for excess contributions.
IRA account transactions, including transfers and withdrawals, are limited to six per month, as defined in federal regulations.