BrightStar CU offers several IRA choices to meet your
needs-both IRA Savings and IRA Certificates with a variety of
terms (including Mini Jumbo and Jumbo IRA Certificates). To help
decide which option is best for you, speak to a BrightStar CU representative.
In addition, we offer Traditional, Roth and Coverdell IRA Savings
and Certificates. Here's a brief description of the three basic
types of IRAs:
Traditional IRA
Traditional IRAs may provide important tax advantages to individuals
seeking to invest for retirement. Depending on your specific situation,
contributions may be wholly or partially tax deductible. In addition,
all earnings in a Traditional IRA grow tax-deferred. This means
that you will not have to pay taxes on deductible contributions
and earnings until money is withdrawn from the account (called
a "distribution"). This usually occurs after retirement, when
your income and taxes may be lower. Tax-deferral allows your investments
to grow significantly faster than a similar investment in a taxable
account.
Roth IRA
Roth IRAs are similar to Traditional IRAs, but they operate somewhat
in reverse. The main difference is that contributions to Roth
IRAs are not tax deductible—making contributions will not
reduce your taxable income. Contributions are made with after-tax
dollars. As a result, distributions, including earnings, are not
included in your taxable income. This means that distributions
will be completely tax-free, subject to certain restrictions.
Coverdell IRA (formerly called Education
IRA)
A Coverdell IRA is exclusively for the purpose of paying the qualified
higher education expenses for a child (the designated beneficiary
of the account). Parents, grandparents, other family members,
friends, and a child him/herself may contribute to the child's
Coverdell IRA, provided that the total contributions during the
taxable year do not exceed the allowable limits. Contributions
cannot be accepted after the child reaches his/her 18th birthday.
Amounts deposited in the account grow tax-free until distributed,
and the child will not owe tax on any withdrawal from the account
if the child's qualified higher education expenses at an eligible
educational institution for the year equal or exceed the amount
of the withdrawal. If the child does not need the money for post-secondary
education, the account balance can be rolled over to the Coverdell
IRA of certain family members who can use it for their higher
education. Amounts withdrawn from an Coverdell IRA that exceed
the child's qualified higher education expenses in a taxable year
are generally subject to taxes. Contributions are not tax deductible.
To determine IRA tax implications, limitations and legal restrictions,
you may wish to consult a qualified tax advisor and check applicable
tax laws. The investment representative located at BrightStar CU can help
you examine your personal situation to determine the best approach
for your retirement savings. For more information, visit the Investments
and Insurance section of our web site.
To open an IRA, speak to a BrightStar CU representative today.
Read our Account Disclosures and
Fee Schedule »
BrightStar CU offers more choices and other Investments and Insurance
options. Learn More»
