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Finance 101

Ready for Retirement?

Posted on December 29, 2014 by Kim Fein

The task of saving for retirement while managing life today is an overwhelmingly complex task. Not only do you have to sift through all the account options with varying levels of risk, you also have to become familiar with all the rules governing their establishment and operation. It’s understandable why the experts are required to have a license to give advice.

The good news is the jargon can be simplified, and you can follow some general guidelines to get informed and start preparing yourself for a joy filled retirement.

If you have an employer sponsored plan, be an active participant. Know and understand the benefits available to you through your employer. Take advantage of match incentives to maximize total contributions made to a retirement plan. Read regular statements to ensure the investments selected match your comfort with risk. Also, consider supplementing your employer plan with an individual retirement account (IRA).

Don’t Have an IRA?

There are two options available, Traditional and Roth. While these accounts are similar in many ways, like they are both designed to help save for retirement, there are a couple key differences that can help you identify which will work best for you.

The most notable difference between Traditional IRAs and Roth IRAs are the tax incentives. Generally, Traditional IRAs accept pre-tax contributions, while Roth IRAs accept after-tax contributions. A common guideline used to determine which account might be right for you is to use the IRA that will give you the best tax advantage. If, for example, you believe you are paying a higher rate of taxes today than you will in the future, making a contribution to a Traditional IRA will give you the advantage of a tax deduction today while also paying a lower tax rate when you distribute the funds during retirement. On the other hand, if you believe you are paying a lower rate in taxes today than in the future, making a contribution to a Roth IRA will give you the advantage of paying taxes today and taking tax-free distributions later.

Already Have an IRA?

Even though 2014 is over and done with, you can still contribute to your 2014 IRA until April 15, 2015. Just note that if you make IRA contributions between January 1 and April 15th, you may need to specify which tax year you are contributing to.

IRA Contribution Limits

  • Contribution limits are the same for the 2014 and 2015 tax years.
  • Savers under 50 will be allowed to invest up to $5,500 in their Traditional or Roth IRA.
  • Those who are 50 and older can make an additional catch-up contribution of $1,000, raising the total to $6,500.

Remember to make your full IRA contribution if possible. This is important because there are no make-up opportunities for IRA contributions that you missed in previous years.

Simply put, there is no need to be intimidated by retirement planning. Find organizations that will help you wade through the material and come to the best decision with you, and don’t be afraid to ask questions. At R.I.A. Federal Credit Union, we welcome that conversation, and we look forward to having it with you.

R.I.A. FCU has a range of IRA Certificates of Deposit to meet your needs that can be opened at any time. You’ll find traditional time deposits ranging from 12 to 60 months at competitive rates.

And the credit union offers a unique variable term IRA certificate for maximum flexibility. With this account, you can deposit as little as $5. Small, systematic deposits made each week or pay period into this account, for example, can add up over time and make saving for retirement nearly effortless.

To learn more about our Traditional IRAs and Roth IRAs visit our website at