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IRAs

April 28, 2025

INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)

About IRAs

Our Individual Retirement Accounts (IRAs) provide valuable tax advantages for retirement planning, including both Traditional IRAs and Roth IRAs, to suit your preferences.

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Plan Smarter for Retirement and Education

Traditional IRAs offer immediate tax benefits by allowing pre-tax contributions, while Roth IRAs provide tax-free withdrawals in retirement. We also offer Coverdell Education Savings Accounts for those saving for educational expenses. Our knowledgeable staff is ready to assist you in choosing the right IRA option, ensuring you make informed decisions for your financial goals, whether it’s retirement or education.

Traditional IRA

Save now. Pay taxes later.

A Traditional IRA helps you grow your retirement savings with tax-deferred contributions and earnings. You won’t pay taxes on the money you put in—or what it earns—until you withdraw it in retirement.

Key Contribution Facts:

  • Under age 50? Contribute up to $6,500/year
  • Age 50 or older? Contribute up to $7,500/year
  • Make current-year contributions anytime
  • Make prior-year contributions until April 15
  • Choose from a money market or certificate account

Why Choose a Traditional IRA?

  1. Tax advantages today: Your contributions may be tax-deductible, depending on your income and employer-sponsored retirement plan status.
  2. Keep contributing: As long as you earn income, you can keep saving.
  3. Tax-deferred growth: You won’t pay taxes on gains until you withdraw.

When You Withdraw:

  • Required minimum distributions begin at age 72
  • Withdrawals are taxed as ordinary income
  • Early withdrawals may face penalties

Roth IRA

Pay now. Keep it later.

A Roth IRA gives you a different kind of tax break. You pay taxes on your contributions up front—but your money grows tax-free and qualified withdrawals in retirement are completely tax-free too.

Key Contribution Facts:

  • Under age 50? Contribute up to $6,500/year
  • Age 50 or older? Contribute up to $7,500/year
  • Make current-year contributions anytime
  • Make prior-year contributions until April 15
  • Available to all earners with reportable income
  • Choose from a money market or certificate account

Why Choose a Roth IRA?

  1. Tax-free retirement income: No taxes when you withdraw qualified funds
  2. Flexibility: Withdraw your contributions at any time, penalty-free
  3. No age limit to contribute: Just keep earning income

When You Withdraw:

To enjoy tax-free withdrawals, both must apply:

  1. You’re 59½ or older
  2. Your account is at least 5 years old

Non-qualified withdrawals may be taxed or penalized.

Not a Member Yet?

We’d love to welcome you! Once you’re a member, you’ll be able to open accounts and take full advantage of everything we offer.

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Frequently Asked Questions About IRAs

What’s the difference between a Traditional and Roth IRA?

A Traditional IRA allows you to make tax-deductible contributions now, but you’ll pay taxes when you withdraw funds in retirement.

A Roth IRA uses after-tax contributions, and qualified withdrawals in retirement are completely tax-free.

Can I have both a Traditional and Roth IRA?

Yes! You can contribute to both types of IRAs in the same year, as long as your total contributions stay within the annual IRS limits.

How much can I contribute to an IRA each year?

Contribution limits are set by the IRS and may change from year to year. In general, you can contribute up to a certain annual maximum, with higher limits available if you’re age 50 or older.

You can make contributions for the current tax year at any time, and for the prior year until Tax Day (usually April 15). For the latest limits, check the IRS website or speak with one of our representatives.

Can I use an IRA to save for education expenses?
Yes! We also offer Coverdell Education Savings Accounts (ESAs), designed to help families save for qualified tuition, books, and supplies.
Is there a minimum amount required to open an IRA?
Yes, a minimum opening deposit is required. Requirements may vary by account type—our team can help you determine what you’ll need based on your financial goals.

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Since 1935, New Alliance Federal Credit Union has been serving the communities of Western Pennsylvania as a not-for-profit, member-owned financial institution.

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*** New Alliance Federal Credit Union is federally insured by the National Credit Union Administration (NCUA) and is an Equal Housing Lender. Membership eligibility is required. This website is intended to provide general information about our products and services and is not intended as legal, tax, or financial advice. For personalized assistance, please contact a qualified advisor. By accessing third-party links provided on this site, you are leaving the credit union’s website. We are not responsible for the content or availability of linked sites and do not endorse or guarantee the information they provide.

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