Individual Retirement Account (IRA)

An IRA is a special savings plan that helps you build a bigger nest egg for retirement or other long-term goals.

Individual Retirement Account (IRA)

Choose from Traditional or Roth IRAs, or IRA Rollover Savings Accounts. IRAs may save you money because, in many cases, your earnings are tax-deferred, tax-deductible or tax-exempt. Consult your tax advisor regarding your potential tax savings.

To open an account call us at (602) 264-6421 or toll free at (866) 264-6421 or visit any of our 9 local branches.

View IRA Rates

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What is an IRA Account and How Does it Work?

An individual retirement account (IRA) is a type of savings account that has tax benefits for your retirement. Financial experts suggest you should save up 85% of your pre-retirement income in order to retire comfortably. This sounds like a lot, but if you start small, these investments will grow.

For those with employer-sponsored 401(k) plans, you may not be able to save enough. You are eligible to save in both a 401(k) plan and an IRA at the same time. Additionally, some people may not be eligible for 401(k) plans. They may be self-employed or work at a company that does not offer retirement options. An IRA is a personally owned retirement account, meaning it stays with you no matter where you are in your journey to retirement.

IRA Types Explained

There are three main types of IRA.

  • Traditional IRA — With this account, you make contributions that you are able to deduct on your tax return. This makes this money tax-deferred until you withdraw it in retirement. If you believe you will be in a lower tax bracket when you retire, a traditional IRA may be beneficial.
  • Roth IRA — With a Roth IRA, you contribute money you have already paid taxes on. This money then, hopefully, grows tax-free. When you reach retirement age, you can withdraw Roth IRA funds tax-free under most circumstances.
  • Rollover IRA — If you have contributed money to a qualified retirement account, you can roll it over into a traditional IRA. Rollovers mean you move eligible assets from an employer-sponsored plan, like a 401(k), into an IRA. Learn more about How to Rollover a 401(k) to an IRA.

Frequently Asked Questions

Where you can invest your IRA depends widely on the brokerage or financial institution that handles your IRA. Speak with a Arizona Central representative to learn where you can invest your money.

How much you can contribute to an IRA depends on your age. Those under 50 can contribute up to $6,000 annually. If you are over 50, you can contribute $7,000 annually.

The biggest reason to contribute to an IRA instead of a standard brokerage account is to avoid capital gains taxes. In a standard brokerage account, you are taxed on how much your investment gained while you held it. IRA accounts grow tax-free, meaning they are not subject to capital gains tax.

You can get a tax deduction for contributions to a Traditional IRA.

A traditional IRA uses pre-tax dollars. You will have to pay income tax on traditional IRA money when you withdraw it upon retirement. A Roth IRA uses post-tax dollars, meaning when you withdraw money from a Roth IRA you will not have to pay taxes. A good rule of thumb for which to choose—a traditional or Roth IRA—is do you think you will be in a higher or lower tax bracket upon retirement. If you will go down in tax brackets, choose a traditional IRA. If your tax bracket will go up, choose a Roth IRA.

Consider using our Roth or Traditional 401(k) Calculator.

There are no income limits to invest in a traditional IRA, though there are some limits on how much you can deduct on your taxes.

A Roth IRA does have income limits.

  • Single filers can make full contributions to a Roth IRA if they have an adjusted gross income of less than $125,000. A partial contribution is allowed if your AGI is more than $125,000 but less than $140,000.
  • Those married and filing jointly can make full contributions to a Roth IRA if your AGI is less than $198,000. Those with an AGI of more than $198,000 but less than $208,000 can make a partial contribution.

IRA Savings Account Rules

  • Annual contributions cannot exceed $7,000 if you are under 50, or $8,000 if you are age 50 or older.
  • Contributions may be tax deductible in the year they are made, depending on the type of IRA account.
  • Investments within the account grow tax-deferred.
  • Withdrawals in retirement for traditional IRAs are taxed as ordinary income.
  • Withdrawals may begin at age 59 ½ and must begin at age 73.
  • Unqualified withdrawals before age 59 ½ may trigger a 10% early withdrawal penalty and are subject to income taxes
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Why Arizona Central Credit Union?

Since 1939, we’ve proudly served Arizona with financial services and benefits that go beyond what regular banks are able to offer. From providing you with higher interest rates on your savings to lower banking fees, we aim to give you a better experience at every step.

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Savings Options

Personal
 Savings Accounts

Your needs, your savings. Explore our personalized range of solutions designed to match your financial goals.

CU
 Succeed

Our exclusive savings and education program is specially curated for teen members aged 13 to 17.

Individual
 Retirement Accounts

Discover the benefits of IRAs – enjoy potential tax-deferred, tax-deductible or tax-exempt earnings, ultimately saving you money.

Certificates
 of Deposit

Experience the best of both worlds – great rates and low-risk with our CDs. Enjoy the predictability of dividend earnings from the very beginning.

CU Grow Youth
 Savings Account

We’re here to help the younger generation learn about financial literacy.

Health 
Savings Accounts

Our HSA provides a tax-advantaged tool for paying qualified medical expenses, allowing you to take control of your healthcare expenses.