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Is a Roth IRA right for you?

At San Mateo Credit Union, we believe our members are stronger when they feel secure about their retirements. That's why we offer Roth IRAs as an option to help you meet your retirement goals.

When it comes to choosing between a Traditional IRA and a Roth IRA, the choice is a very personal one, and something that you should talk about with a qualified professional.

The very basics of Roth IRAs

Essentially, a Roth IRA is a retirement account that you fund with after-tax dollars (that's the opposite of a 401(k) or Traditional IRA, where you use pre-tax money).

Some unique features of the Roth IRA are:

  • Investments grow tax-free*
  • Contributions are not tax-deductible
  • You can withdraw your contributions any time without paying taxes
  • You can withdraw your earnings on contributions without taxes after your account has been open for five years and you reach age 59 1/2.*
  • Distributions are not required to be taken at age 70 1/2. (i.e. no Required Minimum Distribution)

Traditional vs. Roth IRA

You may prefer a Traditional IRA if you: You may prefer a Roth IRA if you:
Qualify to make tax-deductible contributions Value a source of tax-free retirement income
Earn too much to contribute to a Roth IRA Don't want to take required distributions at age 70.5
Want to build savings and convert to a Roth later Expect to be in a higher tax bracket at retirement

Get the advice you deserve from SMCU

As with any investment tool, the decision to use a Roth IRA should be discussed with a financial professional first. So please give us a call at (650) 363-1725 or stop by a branch to talk through your options.

* SMCU does not provide tax advice. Please consult with your tax or legal advisor to determine how this information may impact your own situation. The information on this site should not be relied upon as investment advice or solicitation. Statements of fact are considered reliable but no representation or warranty is made as to their completeness or accuracy.

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