Individual Retirement Accounts (IRAs) | Kapa'a, HI - Lihue, HI - Waimea, HI | KCFCU

Individual Retirement Accounts (IRA)

Individual Retirement Accounts (IRA)

An Individual Retirement Account (IRA) is a wonderful way to begin saving for your future, while reducing the taxes you pay on the money you save. The sooner you start, the more powerful the savings and tax advantages.

The biggest decision to make is whether you want to save on taxes now or after you retire. We can help you open a new IRA account (Traditional or Roth), Coverdell Education Savings Account (CESA), or transfer an existing IRA to us.

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Summary
  • Tax-advantaged retirement savings*
  • Competitive rates above standard savings
  • Traditional, Roth IRAs, or Coverdell accounts available
  • No setup or administrative fees
  • No monthly or annual maintenance fees
  • $5,500 contribution limit per year
  • Additional $1,000 "catch-up" contribution allowed for ages 50+
  • Funds can be used to purchase CDs within IRA
  • Minimum deposit of $25 or $500 based on account type
  • Insured by the NCUA for an additional $250,000

*Consult a tax advisor.

View KCFCU's Truth in Savings Disclosure for all fees, terms and conditions.


Traditional
vs. Roth

A traditional IRA may provide you significant immediate tax savings, and thanks to the deferral of all taxes on earnings, the power of compound earnings is strengthened. With a Roth IRA, contributions are not tax deductible. However, this option has other advantages. Where a traditional IRA provides tax-deferred growth with the deferral ending at withdrawal, your earnings may be tax-free in a Roth IRA.

Traditional IRA

  • No income limits to open
  • No minimum contribution in any year
  • Contributions are tax deductible on state and federal income tax*
  • Earnings are tax deferred until withdrawal
  • Withdrawals can begin at age 59½
  • Early withdrawals subject to penalty**
  • Mandatory withdrawals at age 70½

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  • Principal contributions can be withdrawn without penalty*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 interest can begin at age 59½
  • Early withdrawals on interest 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.

CESA

Coverdell Educational Savings Account


You also have the option of saving for your child's educational future with a Coverdell Education Savings Account (CESA), formerly Educational IRA. As with the Roth IRA, contributions are not tax deductible, but there are many advantages with this account. And you can contribute up to $2,000 per year until the child reaches 30 years of age.

  • Save to fund your children's education
  • No setup or annual fee
  • Dividends grow tax-free
  • Withdrawals are tax-free when used for qualified education expenses*
  • Designated beneficiary must be under 18 when contributions are made
  • $2,000 maximum annual contribution per child*
  • Contributions are not tax deductible
  • Certain income limits apply for contributions*

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