Traditional and Roth IRAs are personal savings plans that allow you to keep more money for yourself and pay less to Uncle Sam.
A New Dimensions FCU Individual Retirement Account can do all this for you and more!
When choosing between a Traditional IRA and a Roth IRA, the question to ask yourself is: Do you want to save money on taxes now or when you retire?
Traditional IRAs make sense if you want a tax deduction now or if you think you’ll be in a lower tax bracket when you retire.
Roth IRAs are a good fit if you don’t need the tax break now. If flexibility is what you need, consider a Roth IRA. A Roth IRA is a more flexible investment because you can withdraw regular contributions at anytime, tax-free and penalty-free, and you do not have to take mandatory distributions at age 70 ½.
If you leave your job or retire, and you have earned benefits in a qualified retirement plan, you can keep the tax-deferred status of the funds by rolling them over directly into a Traditional IRA.
Through a direct rollover, you postpone paying taxes and you avoid mandatory 20% federal income tax withholding.