Opening a Roth IRA at your credit union is a great way to save for your retirement. A Roth IRA has two unique factors:
First, the money you contribute to a Roth IRA has already been taxed. So, the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines.
Second, this retirement plan allows the money you contribute to grow tax-deferred. If you do not withdraw any of the earnings until you have had the plan for at least five years, those tax-deferred earnings become tax-free.
The Roth IRA tax advantage can save you tax dollars in the long run. It gives you the ability to invest your after-tax dollars today, let the investment grow tax-deferred, and withdraw your principal and earnings tax-free after five years! However, you may be subject to a 10 percent penalty on the earnings if taken before age 59½.
