Take advantage of tax-advantaged accounts

One of the best ways to accumulate funds for retirement, or any other investment objective, is to use tax-advantaged (*i.e., tax deferred or tax free) savings vehicles. Though tax considerations shouldn’t be your only investing concern, by putting your money in tax-advantaged savings vehicles and investments when appropriate, you’ll keep more money in your own pocket and put less in Uncle Sam’s.

Traditional IRAs

Anyone under 70½ who earns income or is married to someone with earned income can contribute to an IRA. Depending upon your income and whether you’re covered by an employer-sponsored plan, you may or may not be able to deduct your contributions to a traditional IRA, but your contributions always grow tax deferred. However, you’ll owe income taxes when you make a withdrawal. You can contribute up to $6,000 in 2019 to a traditional IRA, and individuals age 50 and older can contribute an additional $1,000.

Roth IRAs

Roth IRAs are only open to individuals with incomes below certain limits. Your contributions are made with after-tax dollars but will grow tax deferred, and qualified distributions will be tax free when you withdraw them. The amount you can contribute is the same as for traditional IRAs.

Employer-sponsored plans (401(k)s, 403(b)s, 457 plans)

Contributions to these types of plans grow tax deferred, but you’ll owe income taxes when you make a withdrawal. You can contribute up to $19,000 in 2019 to one of these plans and individuals age 50 and older can contribute an additional $6,000. Some employers allow employees to make after tax Roth contributions, in which case qualifying distributions will be tax free.

TFCU Financial Advisors
6501 Tinker Diagonal
Midwest City, OK 73110
(405) 737-0006
TFCUFinancialAdvisors.org

Securities are offered through RAYMOND JAMES FINANCIAL SERVICES, INC., Member FINRA/SIPC, and are not insured by NCUA or insured by any other government agency. Funds are NOT GUARANTEED nor are they deposits or obligations of the credit union or any affiliated entity of the credit union, and are subject to risk, including the possible loss of principal. Tinker Federal Credit Union, Tinker Financial Services, LLC and TFCU Financial Advisors** are not registered broker/dealers and are independent of Raymond James Financial Services, Inc. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc., a non-affiliated third party provider to Tinker Financial Services, LLC and Tinker Federal Credit Union. All investments and information are intended for U.S. residents only. **TFCU Financial Advisors is a registered trademark and ‘dba’ of Tinker Financial Services, LLC. Raymond James Financial Services, Inc. does not provide advice on tax. These matters should be discussed with the appropriate professional. *Tax deferred is not the same as tax free. “Tax deferred” means that the payment of taxes is delayed, while “tax free” means that no income taxes are due at all. Source: Raymond James Forefield 2017-041215
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