The Taxpayer Relief Act of 1997 created a variety of new IRA options. Not only did it change rules for the traditional IRA, but it also introduced the Roth and Education IRA (now known as the Coverdell ESA). These options were improved by the Economic Growth and Tax Relief Reconciliation Act of 2001. Traditional IRAs are more attractive than ever because expanded income limits mean more people will be able to make tax-deductible contributions. In addition, penalty-free withdrawals are allowed for qualified higher education expenses and for a first-time home purchase.

Contributions to the Roth IRA or Coverdell ESA aren’t tax deductible, but the accounts offer the opportunity for tax-free earnings.

Your tax adviser can offer more guidance on which type of IRA may be best for your needs. Of course, we are always here to answer your questions and assist you with opening an IRA. Please stop by or call us today for more information on the benefits of a credit union IRA.