The following article appeared on the Delta Community Credit Union blog Dec. 21. Delta Community Credit Union is Georgia’s largest credit union with 24 branches across metro Atlanta and three outside Georgia.
It’s a new year which means one thing—time to start gathering all the documents needed to file your 2017 taxes. It’s also a good time to make any last minute contributions to tax-favored accounts, such as an IRA.
Let’s start with the basics—what is an IRA?
An Individual Retirement Account, more commonly known as an IRA, is a type of investment or savings account that comes with tax benefits to help you save for retirement. Earnings on IRAs grow tax-deferred and, depending on the type of IRA you have, there may be other benefits in retirement, such as lower taxes (or no taxes) on withdrawals.
It’s important to understand the difference between a Traditional IRA and a Roth IRA before investing your money. Here are a few things to consider:
A Traditional IRA:
- Offers a tax deduction for the tax year in which the contribution was made
- Earnings are taxed when distributed
- You’re required to start taking distributions at age 70 ½
A Roth IRA:
- Gives investors the chance to invest money after taxes and then take the contributions and earnings out tax-free in retirement
- Doesn’t require any withdrawals during the owner’s lifetime
- Allows you to continue making contributions as long as you have earned income, even after age 70 ½
You have until the tax filing deadline, April 17, 2018, to make an IRA contribution and possibly lessen your 2017 tax obligation. All Delta Community IRA Savings Accounts are federally insured by the National Credit Union Administration for up to $250,000. There is an easy application process and no setup, maintenance or administrative fees. If you think contributing to an IRA would be beneficial to you, call 404-677-4600 to speak with one of our IRA Specialists.