From 401k, investment accounts, and even IRA’s, or cashing in big on the lottery, you have many options when choosing which way you would like to save for retirement. But which plan is best for you? Well, that is up for you to decide. Your chances of winning the lottery are 1 in 300 million, but we offer IRAs in the meantime if you would like to keep your money with R1CU.

Traditional Individual Retirement Account (IRA)

Roth Individual Retirement Account (IRA)

Differences

Eligible no matter what income level

Has income restrictions

Deductions from account are subject to restriction

Nondeductible

Eventually taxes have to be paid on account

May be tax free with some restrictions

Allow contributions to be withdrawn at any time

Early withdrawals of earnings may be subject to a 10% penalty and income taxes.

Similarities

May contribute to both no matter what age, but must have earned income.

Can be used for retirement

Have the same contribution amount

Accounts have the same Tax Deadline

Tax deferred

Can be Spousal IRAs

Have earned income

 

SEP IRA

Are you self-employed, a sole proprietor, part of a partnership, own a small business, work for government agencies or corporations? Then, take a look at our SEP IRA. SEP plans are a way for employers to offer a low-cost retirement savings plan to their eligible employees. Under a SEP plan, the employer contributes the Traditional IRAs of his or her employees.

Coverdell ESA

If you’re in a position where you would like to set up a child for a better financial future, we also offer Coverdell ESA. The Coverdell ESA’s sole purpose is to help pay for qualified education expenses of a particular child under the age of 18. Earnings are tax-free if used for qualified education expenses. The account is reported to the IRS under the child’s name and social security number.

Questions?

Make sure to do your research on all of your options, and if you’re still stumped, reach out to a Financial Advisor. They can look at your finances and give you the best advice possible on what to do with your money. If you have any questions about our IRAs give us a call at 214-319-3100 or visit us at any of our locations.

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