Individual Retirement Accounts (IRA's)

If you're trying to decide between a Traditional IRA and a Roth IRA, the main question is: Do you want to saves on taxes now or when you retire?

If you want to save on taxes now, a Traditional IRA is a smart choice. Especially if you think you'll be in a lower tax bracket when you retire. If you would rather save on taxes when you retire, and flexibility in withdrawing funds is important, choose a Roth IRA.

Traditional

A traditional IRA brings you significant up-front tax advantages, and with less money taken out for taxes, the power of compound earnings is strengthened.

With a traditional IRA:

• Earnings accumulate tax-deferred
• Contributions are tax-deductible if you qualify
• The amount you can contribute is increasing

The contribution amount for 2008 is $5,000 and for 2009 is $5,000.

For owners age 50 and older, your limits for 2008 are $6,000 and for 2009 are $6,000.

Roth

Roth IRA's are a good investment if you are not wanting a tax break right now and offer more flexibility.

With a Roth IRA:

• Contributions are allowed at any age
• Qualified distributions are tax-free
• You can withdraw regular contributions at any time, tax free and penalty- free
• The amount you can contribute is increasing

The contribution amount for 2008 is $5,000 and for 2009 is $5,000.

For owners age 50 and older, your limits for 2008 are $6,000 and for 2009 are $6,000.

Coverdell Education Savings Accounts

With rapidly escalating costs of higher education, this dream can become a financial nightmare.

The main benefits of a Coverdell ESA include:

• Unlike state 529 plans, Coverdell ESA's can be used to pay for qualified elementary and secondary education expenses.
• Earnings grow tax-free if distributions are used for qualified education expenses.

Contributions cannot exceed $2000 per year per child.

Our IRA professionals here at NAS JRB Credit Union are happy to answer your questions. Call us today at 504-678-3563!

For more financial planning and investment opportunities be sure to visit our financial services center located on the home page as Financial Planning.