Individual Retirement Accounts (IRAs) | Woodstone Credit Union | Federal Way Washington

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Individual Retirement Accounts (IRAs)

Being people-powered means we work tirelessly to meet our members’ needs both as they plan for their golden years and as they enjoy them. Our IRAs are born out of a simple mission: to create enriched lives through the collective power of people working together.

So why should you invest in an IRA? An Individual Retirement Account (IRA) is a valuable way to either supplement your employer-sponsored retirement plan or to safeguard your financial future in lieu of one. We offer two kinds of IRA:

Traditional IRA

With a Traditional IRA, your earnings grow tax-deferred, so you won’t owe tax on earnings until you start to make withdrawals. Depending on IRS guidelines, your contributions may even be tax-deductible. Deductible contributions and earnings are taxed at your current income-tax rate when money is withdrawn. Many retirees find themselves in a lower tax bracket than they were when they were younger—hence the tax advantages of a investing in a traditional IRA.

For tax year 2016, you can contribute up to $5,500 or up to $6,500 if you are 50 or older.

Roth IRA

With a Roth IRA, you pay taxes on contributions but not on distributions. A Roth IRA therefore offers tax-free growth along with more flexible withdrawal options.

Assuming you meet the Modified Adjusted Gross Income (MAGI) limits, no matter how old you are, you can contribute to a Roth IRA as long as you are still working and earning income. Plus, unlike with a Traditional IRA, there are no requirements to take required minimum distributions at age 70½. You may also withdraw your principal prior to retirement without IRS penalty as long as your earnings remain on deposit until you are 59½ years old (certain restrictions apply).

For tax year 2016, you can contribute up to $5,500 or up to $6,500 if you are 50 or older.

Coverdell Educational Savings Account (ESA)

Tending to the interests of our community involves thinking forward to its future. A Coverdell ESA is a people-powered way to support your child’s eventual educational needs.

As educational costs continue to rise across the board, it’s become more important than ever to plan for our children’s educational future. A Coverdell ESA allows you to save for future education expenses with after-tax dollars. It’s like an IRA for educational needs. Anyone—grandparents, aunts, uncles, even friends—can open and contribute to a Coverdell ESA as long as they meet the Modified Adjusted Gross Income requirements.

You can save up to $2,000 per child, per year, and the earnings grow tax-free if distributions are used to pay for qualified education expenses.

You can also use an ESA to pay for qualified education expenses for eligible elementary, secondary, and postsecondary institutions .

Our IRAs and ESAs feature:

Open your IRA today.

  • Online: through Online Banking
  • Over the phone: at 253.925.6800 or 800.334.9828
  • In person: at our branch