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• Contributions can be withdrawn anytime without taxes or penalties.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: