Individual Retirement Accounts

An Individual Retirement Account (IRA) from McCoy Federal is an excellent path to retirement savings. Your contributions may be tax-deductible* and will grow either tax-deferred or tax-free.

A Coverdell Education Savings Account (ESA) is a great way to meet the rising costs of a student's education.

Traditional IRA

To contribute to a Traditional IRA you must have earned income and not have reached age 70-1/2 by the end of the year. McCoy Federal requires participants to be 18 years of age or older to get an IRA. Investments grow on a tax-deferred basis and earnings are taxed upon withdrawal.

Roth IRA

You can contribute to a Roth IRA as long as you have earned income, even after age 70-1/2.

McCoy Federal requires participants to be 18 years of age or older to get a Roth IRA.

Contributions are not tax deductible; however contributions and earnings (if it is a qualified distribution) can be withdrawn tax-free. You are not required to begin distributions after age 70-1/2.

Coverdell ESA

Beginning in 2002, the annual contribution amount has been increased from $500 per beneficiary to $2,000 per beneficiary. While there is no tax deduction for amounts contributed to an ESA, earnings grow tax-free.

Your ESA can be used to pay qualified elementary school and secondary school expenses as well as higher education.

* Please see your tax advisor before making any decisions regarding your IRA/ESA. Federal regulations are subject to change.

How do you decide which type of IRA is right for you? It depends on what type of contribution you're eligible for and your specific financial situation. Retirement Central will help you determine which IRA you're eligible for and then help you evaluate which type is best for you. Our IRA articles will teach you what you need to know about IRA tax advantages, contribution limits, and withdrawal rules. Visit Retirement Central now.

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