Invest in your financial future.
There are two types of IRA—Roth and Traditional. LOC offers both. The best option for you depends on your income, your goals and other types of retirement accounts you currently have access to.
A Traditional IRA:
- No income restrictions for participation
- Offers tax-deferred growth and possible tax deduction for your contribution
- Allows for penalty-free withdrawals beginning at age 59 ½. These withdrawals will be taxed as regular income.
- Have required minimum distributions beginning at age 73
A Roth IRA:
- Income restrictions apply for participation beginning at $150,000 (single) or $236,000 (joint)
- Offers possible tax-free growth investment.
- No tax deduction is available as contributions are made with after-tax dollars.
- Provides penalty-free withdraw your contributions at any time as long as the account has been opened for five years.
- Allows for penalty-free withdraw earnings beginning at age 59 ½.
- Has no required minimum distribution at this time
Compare the Traditional and Roth IRA
No matter the IRA you choose, you'll have peace of mind knowing that your accounts are Federally insured by the NCUA up to $250,000 and insured up to an additional $750,000 by Excess Share Insurance, private insurance company for total coverage of up to $1,000,000.The below chart is a high-level comparison of a Roth and Traditional IRA. We recommend you speak with a knowledgeable professional to help determine which IRA is best for you and how you should fund it. For specific tax details, consult your tax advisor.
| Roth IRA | Traditional IRA |
|---|---|
| Who can contribute? | |
|
Individuals, and/or spouses if they file jointly at any age, whose adjusted gross income for 2025 is below $150,000 (single) or $236,000 (joint) and report earned income. |
Individuals, and/or spouses if they file jointly and report earned income. |
| How much can you contribute?* | |
|
Up to $7,000 or 100% of earned income, whichever is less. If you are 50 or older, you can make an additional contribution of $1,000 for a total of $8,000. Allowed contributions begin to phase out at $150,000 (single) or $236,000 (joint) for 2025. |
Up to $7,000 or 100% of earned income, whichever is less. If you are 50 or older, you can make an additional contribution of $1,000 for a total of $8,000. |
| Tax advantages | |
|
Possible tax-free growth investment. No tax deduction is available as contributions are made with after-tax dollars. |
Tax-deferred growth and possible tax deduction for your contribution. Consult your tax advisor. |
| When can I access my funds? | |
|
You may withdraw your contributions at any time without penalty as long as the account has been opened for five years. You can begin to withdraw earnings at age 59 ½. Any withdrawals made on earnings prior to age 59 ½ are subject to income taxes as well as a 10% penalty. |
You can begin withdrawals at age 59 ½. These withdrawals will be taxed as regular income. Any withdrawals prior to age 59 ½ are subject to income taxes as well as a 10% penalty. |
| When must I start taking distributions? | |
|
At this time, there are no distribution requirements on a Roth IRA. |
Distributions must begin by age 72. This is known as required minimum distribution. |
| * Total combined contribution to a Traditional and Roth IRA cannot exceed $7,000 (or $8,000 if age 50 or older). | |
| Minimum Deposit Amount | Dividend Rate | APY | Dividends Paid |
|---|---|---|---|
| $100-$2,499 | 0.250% | 0.250% | Quarterly |
| $2,500-$9,999 | 0.500% | 0.501% | Quarterly |
| $10,000-$49,999 | 0.600% | 0.601% | Quarterly |
| Over $50,000 | 0.750% | 0.752% | Quarterly |
APY = Annual Percentage Yield $100.00 minimum balance to earn the stated APY. No minimum variable IRA balance required to open. Variable IRA dividends are calculated using the daily balance, paid and compounded quarterly. Variable IRA dividend rate is subject to change at any time. All member accounts are insured up to $1,000,000 (one million dollars) - Federally insured by NCUA up to $250,000 and insured up to an additional $750,000 by Excess Share Insurance, a private insurance company. | |||
| Account Type | Dividend Rate | APY | Dividends Paid | Penalties | Note |
|---|---|---|---|---|---|
| 3 Month Cert / IRA | 2.96% | 3.00% | At Maturity | 90 days* | |
| 6 Month Cert / IRA | 3.47% | 3.50% | At Maturity | 90 days* | |
| 7 Month Certificate | 4.21% | 4.25% | At Maturity | 90 days* | *Rolls into 6-month CD at maturity. |
| 12 Month Cert / IRA | 3.70% | 3.75% | Monthly | 180 days* | |
| 18 Month Cert / IRA | 3.45% | 3.50% | Monthly | 180 days* | |
| 24 Month Cert / IRA | 2.96% | 3.00% | Monthly | 180 days* | |
| 36 Month Cert / IRA | 2.72% | 2.75% | Monthly | 180 days* | |
| 48 Month Cert / IRA | 2.72% | 2.75% | Monthly | 180 days* | |
| 60 Month Cert / IRA | 2.72% | 2.75% | Monthly | 180 days* | |
APY = Annual Percentage Yield A minimum of $1,000 is required to purchase all Share Certificates. * Penalty for early withdrawal of funds may apply on Certificate products. All member accounts are insured up to $1,000,000 (one million dollars) - Federally insured by NCUA up to $250,000 and insured up to an additional $750,000 by Excess Share Insurance, a private insurance company. | |||||
Are my current retirement savings sufficient?
One method of retirement planning is to project what you are currently saving and have already accumulated to see if you will have enough to meet your retirement objectives. Use this retirement planning calculator to determine when/if the money will run out during retirement and it will recommend additional savings if required.
Are you ready to join LOC?
It’s easy to become a member of LOC Credit Union!
Membership is open to anyone who lives, works, worships, or attends school in the state of Michigan.
A current or eligible member's immediate family (spouse, sibling, child, grandchild, parent, grandparent) or an individual living in the same household of a current or eligible member can also join LOC.
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