Individual Retirement Accounts (IRAs) are excellent savings programs to help you prepare for your retirement. Your future self will thank you! At USECU we offer three types of IRAs to meet your retirement needs: Traditional, Roth, and the Coverdell Education Savings Account (ESA). Each type offers a variety of features that will help you grow dollars for tomorrow.

Traditional IRA

A traditional IRA brings significant up-front tax advantages, and with less money taken out for taxes, the power of compound earnings is strengthened.

  • Account allows members to defer taxes on their earnings until they are withdrawn.
  • Contributions are tax-deductible if you qualify.

If you meet the eligibility requirements and you are under 50, you can contribute up to the maximum for the current year. The contribution limit may increase for individuals age 50 and older.

Roth IRA

A Roth IRA can provide you with tax-free withdrawals when you retire. As time goes by, you will be amazed at the power of compounding interest and its effect on your account.

  • Contributions are allowed at any age. Keep in mind that there are income limits for contributing to a Roth IRA, so not everyone can take advantage.
  • Tax-free withdrawals for certain distribution reasons after a five year holding period.
  • Flexible withdrawal options are available if you need to withdraw money early.

Unlike Traditional IRAs, contributions to a Roth IRA are never tax-deductible. However, the money in your Roth IRA, including earnings, grows tax-free and can be withdrawn tax-free. You must conform to certain tax requirements to get this tax-free advantage.

Coverdell ESA

A Coverdell Education Savings Account (ESA) can help give your child the gift of education.

  • Unlike state 529 plans, Coverdell ESAs can be used to pay for qualified elementary and secondary education expenses, including tuition, fees, books, supplies, equipment, and in some cases, room and board and computers.
  • Earnings grow on a tax-deferred basis and distributions are tax-free if the money is used to pay for qualified education expenses.

The Coverdell ESA’s sole purpose is to help you pay for your child’s education expenses.

Contribution Limits

IRA TypeMaximum Contribution
(if under age 50)
Maximum Contribution
(if over age 50)
Traditional IRA $6,000 $7,000
Roth IRA $6,000 $7,000
Coverdell ESA The annual contribution limit is $2,000 per beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. Up to age 18.

For additional information, contact a Member Service Representative at 713-595-3400 or send an email to: