Individual Retirement Accounts
Retirement savings with tax benefits
Lanco FCU offers special savings plans authorized by the Federal Government to help you accumulate funds for your retirement. These savings plans are Individual Retirement Accounts, or IRAs.
A Traditional IRA offers tax-deferred earnings, and the possibility for tax-deductible contributions.
If you are under the age 70-1/2, with earned income, or file a joint tax return with someone who has earned income, you are able to contribute to a Traditional IRA.
A Roth IRA is funded solely by after-tax contributions and allows for tax free withdrawals.
Persons of any age who have compensation or who file a joint tax return with someone who has compensation and meets income requirements, are eligible to contribute.
Another kind of IRA: Saving for higher education
Coverdell Education Savings Account
The Coverdell Education Savings Account is funded by after-tax contributions and allows for tax-free withdrawals.
Anyone who meets certain income requirements, whether related to the child (beneficiary) or not, can establish a Coverdell ESA in the name of the child.
Contributions are not tax-deductible. Earnings grow tax-free and no taxes are paid when the money is withdrawn if it is used to pay for qualified education costs. Qualified expenses include tuition, fees, books, and equipment required for enrollment or attendance at any post-secondary educational institution.
Money left in one child’s Coverdell ESA may be rolled over, tax-free to another child’s Coverdell ESA as long as the new beneficiary is a member of the original beneficiary’s family and is under the age of 30.