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IRAs

IRAs

Invest with Texas Trust

IRAs (Individual Retirement Accounts) with Texas Trust Credit Union offer you a choice of opening your IRA through either a savings account or a CD. Choose from the options we provide.

Traditional IRAs Roth IRAs Coverdell Education Savings Account IRA Rollovers

Setting aside money into an IRA can be a great way to supplement your other retirement savings. A Traditional IRA at Texas Trust Credit Union offers tax-deferred savings opportunities. You pay no taxes on the earnings, and in some case on the contributions, until distributions are taken from the account.

Consider a Traditional IRA if:

  • You want to take a tax deduction on the IRA contribution thus lowering your current tax bill.
  • You anticipate your tax rate will be lower at the time of distribution (after you retire) than your current tax rate.

Annual Contribution Limits1

Contribution limits are set by the IRS each year.

How to Open your Traditional IRA:

Visit any of our branches. Or, call us at (972) 263-5171 for more information.

Other considerations with the Traditional IRA:

  • Any earnings and deductible contributions are subject to tax upon distribution.
  • Taxable distributions before age 59½ may be subject to a 10% penalty tax. See your tax advisor for details before making any contributions.
  • To discuss your options, contact your tax advisor. Required minimum distributions (RMDs) must start at age 72.3

A Roth IRA may be one of the best ways for individuals to save for retirement, for one simple reason: the earnings on your investment are free from federal income taxes as long as certain conditions are met.

Roth IRA Benefits:

  • Contributions can be withdrawn anytime without taxes or penalties.
  • Distributions, interest, and dividends are tax free if you are at least 59½ and the account has been established for longer than five years.3 Other reasons may also apply for tax-free distributions.
  • You can contribute as long as you have earned income.
  • No required minimum distribution (RMD) during your lifetime.
  • Tax-free distributions can be passed to your beneficiaries.

Consider a Roth if:

  • You want tax-free earnings.4
  • You are already saving for retirement with an employer-sponsored plan.
  • You want to invest for retirement but may need to access your savings.

Contribution Limits1

Contribution limits are set by the IRS each year

To discuss your options, contact Jim Blazek with Texas Trust Investment Services.

How to Open your Roth IRA:

Visit any of our branches. Or, call us at (972) 263-5171 for more information.

With the cost of college tuition rising steadily, a Coverdell Education Savings Account may be a great, tax-advantaged way to save for a child's future. A Coverdell ESA allows tax- and penalty-free earnings when the money is used to pay for qualified primary, secondary, and higher education expenses.6 And you don't have to be the child's parent to contribute to the account—grandparents, aunts, uncles, and friends may contribute as well.

Coverdell ESA Benefits:

  • Contribute up to $2,000 per year for each child under 18
  • Full contributions to the account are allowed apart from contributions to a Traditional IRA, Roth IRA, or employer-sponsored retirement savings plan

Your life changes.

How you invested for retirement 2, 5, or even 10 years ago may need to be adjusted. That's where a Traditional Rollover IRA can help.

Generally, Traditional Rollover IRAs occur when you change jobs or retire and want to take a distribution from your former employer's retirement plan, without incurring taxes and potential IRS early withdrawal penalties. There are different ways you can take this distribution.

Direct Rollover

With a direct rollover, the fund's assets are made payable to the qualified plan or IRA custodian/trustee – never to the individual. This option allows you to keep 100% of your retirement savings by avoiding IRS early-withdrawal penalties and current taxes.

Indirect Rollover

With an indirect rollover, the distribution check is made out directly to you. You then have 60 days to deposit the money into a Traditional Rollover IRA to avoid taxes and IRS penalties. Your distribution check is 80% of your savings because your former employer is required to withhold 20% for federal taxes and state taxes where applicable. When you open a Traditional Rollover IRA, you’ll need to add the 20% back if you want to keep 100% of your eligible rollover assets. However, depending on your tax situation, you may be entitled to claim a refund of 20% when you file your taxes. To be fully informed, please consult a tax advisor before opting for an indirect rollover.

Cash Distribution

In a cash distribution, the distribution check is made out directly to you and you choose not to rollover your distribution. This is generally the least advantageous option because you lose 20% of your money to federal taxes (plus any applicable state taxes). Additionally, if you’re under 59-1/2, you’ll be subject to a 10% IRS early-withdrawal penalty and the entire amount is reported as taxable income. To be fully informed, please consult a tax advisor before opting for a cash distribution.

Three ways you can close out your current qualified retirement plan:

IRA Rollovers

1 Source: Internal Revenue Service

2If you are 50 or older, you can take advantage of a "catch-up" provision and set aside additional funds each year.

3If you don't distribute the required amount for any given year, you may face a 50% penalty tax on the amount of your Required Minimum Distribution that was not taken. Does not apply to Roth IRA.

4Qualified distributions before age 59 1/2 are also federally tax free if the account has been established for at least five years and are taken because of death, disability, or for a first-time home purchase (up to a lifetime cap of $10,000). Applicable to Roth IRAs only

6 Qualified Coverdell Education Savings Account distributions are not subject to state and local taxation in most states. Earnings accumulate tax- and penalty-free as long as the assets are used to pay qualified education expenses and are withdrawn before the child turns 30.

7 CDs are NCUA insured up to at least $250,000 per institution and offer a fixed rate of return, while the return and principal value of other investments will fluctuate with changing market conditions. A minimum deposit may apply. Generally, CDs may not be withdrawn prior to maturity.

See our Truth in Savings disclosures: Share Accounts (Savings and Checking). You may also be interested in Savings/CDs options.



Serving Dallas, Denton, Ellis, Henderson, Johnson, Tarrant, and Tom Green Counties with branches in Arlington, Athens, Bedford, Cedar Hill, Flower Mound, Grand Prairie, Hurst, Irving, Mansfield, Midlothian, and San Angelo

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