At Telco Credit Union, we know it can be difficult to save money, but we also know that saving money can benefit you greatly in the long run. Telco serves Greenville, Tarboro, Rocky Mount, and the Eastern North Carolina area. You can trust us with all your financial needs. Whether you want to open a checking or savings account, take out a loan, finance your mortgage, or become a Telco member/owner, we’ve got you covered.
An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. The 3 main types of IRAs each have different advantages:
- Traditional IRA – You make contributions with money you may be able to deduct on your tax return, and any earnings can potentially grow tax-deferred until you withdraw them in retirement. Many retirees find themselves in a lower tax bracket than they were in pre-retirement, so the tax-deferral means the money may be taxed at a lower rate.
- Roth IRA – You make contributions with money you’ve already paid taxes on (after-tax), and your money may potentially grow tax-free, with tax-free withdrawals in retirement, provided that certain conditions are met.
- Rollover IRA – You contribute money “rolled over” from a qualified retirement plan into this traditional IRA. Rollovers involve moving eligible assets from an employer-sponsored plan, such as a 401(k) or 403(b), into an IRA.
Whether you choose a traditional or Roth IRA, the tax benefits allow your savings to potentially grow, or compound, more quickly than in a taxable account. Our Roth vs. Traditional IRA CalculatorOpens in a new window can help you determine an appropriate option.
Why invest in an IRA?
Many financial experts estimate that you may need up to 85% of your pre-retirement income in retirement. An employer-sponsored savings plan, such as a 401(k), might not be enough to accumulate the savings you need. Fortunately, you can contribute to both a 401(k) and an IRA. A Fidelity IRA can help you:
- Supplement your current savings in your employer-sponsored retirement plan.
- Gain access to a potentially wider range of investment choices than your employer-sponsored plan.
- Take advantage of potential tax-deferred or tax-free growth.
You should try to contribute the maximum amount to your IRA each year to get the most out of these savings. Be sure to monitor your investments and make adjustments as needed, especially as retirement nears and your goals change.
We hope this helps! Planning for your financial future can be complicated, frustrating, and difficult, but it can also lead you to financial freedom and increasing your savings. At Telco, we want you to feel that financial freedom. Contact us if you have any questions, or if you’re interested in any of our services! We are proud to serve the Eastern North Carolina area as a primary credit union.