IRAs and ESA to Secure Your Future

Plan for your future with an Individual Retirement Account (IRA) or for your child’s future with an Education Savings Account (ESA).

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Traditional IRA1 Roth IRA1 Coverdell ESA2
Purpose Retirement savings Retirement savings Education savings
Contributions Fully deductible unless you participate in an employer-sponsored plan

Deductible based on your income if you participate in an employer-sponsored plan

 Not tax deductible Not tax deductible
Contribution limits $6,000/year in 2019 if you’re under 50
Contribute additional $1,000 if you’re over 50		 $6,000/year in 2019 if you’re under 50
Contribute additional $1,000 if you’re over 50		 Based on taxpayer’s modified adjusted gross income
$2,000/year per child up to the age of 18
Withdrawals Withdrawals treated as taxable income

No penalties if you withdraw at or after age 59.5

Must make required minimum withdrawals at age 70.5

 Tax-free withdrawals

May start withdrawing at age 59.5 without penalty if funds have been in account for 5 years

No required minimum withdrawals

 Tax-free if used for qualified education expenses

10% tax on portion exceeding education expenses

May withdraw at any time

Balances must be distributed before or within 30 days after the beneficiary turns 30
Requirements You must earn income

You will not reach age 70.5 by the end of the year

 You must earn income

 

 Anyone can contribute

Beneficiary must be age 0-18
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1IRA = Individual Retirement Account. Early withdrawals from accounts could result in fees. Fees can reduce earnings.
2ESA = Education Savings Account. Non-education withdrawals from accounts could result in fees. Fees can reduce earnings.

More Detailed Information
Rates

Retirement Planning Options

Educators Credit Union IRAs

If you are interested in investing your retirement funds with Educators through a Traditional IRA or Roth IRA, we offer two options: the IRA Money Market Savings Account and the IRA Share Certificate. Your IRA funds are insured by the National Credit Union Administration (NCUA) to an aggregate amount of $250,000 (separate from your non-IRA share insurance coverage).

The IRA Money Market account offers the same rates as our High Yield Money Market Account, but the minimum starting balance is just $25. You also have the option to set up automatic payroll deduction.

The IRA Share Certificate offers the same rates as our other share certificates and provides the additional security of a guaranteed rate during the Share Certificate term.

Other Retirement Savings

Would you like to explore other investment alternatives for your retirement savings? Contact one of our CUNA1 Investment Advisors who can help you find the investments that best meets your needs.

High Yield Money Market Account

Dividend Rate APY1 Minimum Balance Required to earn APY2

1APY = Annual Percentage Yield. Rates will not change until the next tier is reached (ex. balance of $2,500 to $9,999 will have a rate of 0.08% APY). Rates are subject to change after account opening.
2For IRA Money Market the minimum to open account is $25. Minimum to open regular Money Market account is $1000, $10 fee per month for daily balances below $1000. Penalties apply for “under the minimum daily balance”, which may reduce earnings.
0.06% 0.06% <$2,500
0.08% 0.08% $2,500
0.11% 0.11% $10,000
0.14% 0.14% $25,000
0.19% 0.19% $50,000

Disclosures

1Educators Investment Services Advisors are registered representatives of CUNA Brokerage Services, Inc. Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.  CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America.

Non-deposit investment products and services are not Federally insured by NCUA.

Note* To members with automatic IRA withdrawals – You may change your withholding election any time prior to receiving your payment. IRA withdrawals are subject to federal income tax withholding, unless you elect no withholding. Withholding from IRA payments, when combined with other withholding, may relieve you from payment of estimated income taxes. However, your withholding election does not affect the amount of income tax you pay. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are insufficient. Please contact us if you need to verify or change your withholding.