Individual Retirement Accounts (IRAs)

• Competitive dividends above standard savings rates
• Traditional and Roth IRA options
• No setup fees
• No monthly or annual maintenance fees
• Annual contribution limits apply (see current contribution limits; $6,000 as of 2022)
• Additional $1,000 "catch-up" contribution allowed for ages 50+
• Funds can be used to purchase share certificates within IRA
• Minimum opening deposit varies by account; compare our IRA options below

There are advantages to both traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.

Traditional IRA

• No income limits to open
• No minimum contribution requirement
• Contributions are tax deductible on state and federal income tax¹
• Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
• Withdrawals can begin at age 59 ½
• Early withdrawals subject to penalty²
• Mandatory withdrawals at age 72 

Roth IRA

• Income limits to be eligible to open Roth IRA³
• Contributions are NOT tax deductible
• Earnings are 100% tax free at withdrawal¹
• Principal contributions can be withdrawn without penalty¹
• Withdrawals on interest can begin at age 59 ½
• Early withdrawals on interest subject to penalty²
• No mandatory distribution age
• No age limit on making contributions as long as you have earned income 

Can I open both a Traditional and Roth IRA?

Yes. Opening both types of retirement accounts allows you start a balanced retirement portfolio. Consult your tax advisor to decide where your contributions should be made.

For more information and answers to your questions about establishing an IRA at Valley Communities Credit Union, talk to one of our member service representatives.

¹Subject to some minimal conditions. Consult a tax advisor.

²Certain exceptions apply, such as healthcare, purchasing first home, etc.

³Consult a tax advisor.

Create an easier transition into college for yourself and your student by setting up a savings account early. A Coverdell ESA provides a tax-free safe place to grow competitive dividends and also financial confidence for a new stage in life. 

• Set aside funds for your child's education
• No setup or annual fee
• Dividends grow tax-free
• Can be set up as a VCCU passbook account or VCCU share certificate account
• Withdrawals are tax-free and penalty-free when used for qualified education expenses¹
• Designated beneficiary must be under 18 when contributions are made
• To contribute to an ESA, certain income limits apply²
• Contributions are not tax deductible
• $2,000 maximum annual contribution per child
• The money must be withdrawn by the time he or she turns 30³
• The ESA may be transferred without penalty to another member of the family
• No minimum deposit to open

¹Qualified expenses include tuition and fees, books, supplies, board, etc.

²Consult your tax advisor to determine your contribution limit.

³Those earnings are subject to income tax and a 10% penalty.