Build retirement savings with a traditional IRA.
A Traditional IRA helps your savings grow tax-deferred, giving your money more time to compound. You may also qualify for tax-deductible contributions, lowering your taxable income today. Add funds over time and build a strong retirement foundation.
What you should know about traditional IRAs.
A traditional IRA is a proven way to build retirement savings. For firefighters with years of service ahead, tax-deferred growth can significantly increase what you have when it matters most.
Why a traditional IRA works for firefighters.
A traditional IRA lets your contributions and earnings grow tax-deferred until you begin taking withdrawals. That means decades of compounding growth without annual taxes on earnings eating into your progress. For firefighters building toward retirement over a long career, the effect can be significant.
The tax deduction advantage.
Depending on your income and whether you or your spouse participate in an employer retirement plan, you may be able to deduct some or all of your contributions from your taxable income in the year you make them. That means a lower tax bill today and more money working for you inside your retirement account.
When and how you can contribute.
You may add funds to your traditional IRA at any time and continue contributing until you reach age 70 and a half. If you have a retirement account elsewhere, rollovers are also an option.
How a traditional IRA works.
Contributions are made with pre-tax or after-tax dollars depending on your eligibility for a deduction. Earnings grow tax-deferred, so you do not pay taxes on dividends or growth until you take distributions. Withdrawals may begin at age 59 and a half without an early withdrawal penalty, and certain conditions may allow for penalty-free withdrawals before that age. Required minimum distributions begin at age 73 under current IRS rules.
Traditional IRA at a glance.
A quick snapshot of key rules, tax benefits, and limits that define how a Traditional IRA works.
| Highlights | Details |
|---|---|
| Contribution Deductibility | May be fully or partially deductible depending on income and employer plan participation |
| Tax Treatment of Earnings | Tax-deferred until distributed |
| Contribution Age Limit | Up to age 70 and a half |
| Early Withdrawal Penalty | Applies before age 59 and a half in most cases |
| Required Minimum Distribution | Yes, beginning at age 73 |
| Dividend Compounding | Monthly |
Everything you need to know about traditional IRA.
Are Traditional IRA contributions tax-deductible?
They may be, depending on your income and whether you or your spouse participate in an employer retirement plan such as a pension or 457(b). Your deductibility may be full, partial or none at all. Please consult your tax advisor or reach out to a Firefighters First Tax Services Consultant to determine what applies to your situation.
When can I start taking withdrawals without a penalty?
Withdrawals may begin at age 59 and a half without an early withdrawal penalty. Certain conditions allow for penalty-free withdrawals before that age.
Can I roll over a 401(k) or deferred compensation plan into a Traditional IRA?
Yes. Firefighters First Credit Union can help facilitate a rollover from a qualified retirement plan into a Traditional IRA. The Freedom IRA Certificate is a temporary holding account designed specifically for members in this situation.
Can I convert my Traditional IRA to a Roth IRA?
Yes. A conversion may have tax implications since converted amounts are generally taxable in the year of conversion. Please consult your tax advisor or reach out to a Firefighters First Tax Services Consultant before proceeding.
Fees may reduce earnings. Dividends will be compounded monthly and will be credited monthly. APY is accurate as of the last dividend declaration date. Penalty for early withdrawal may apply. Please consult your tax advisor for recommendations on which type of IRA will be most beneficial to your specific financial situation and IRS restrictions. For fees, refer to the current Schedule of Service Charges and Fees.
All Firefighters First Credit Union deposit accounts except for share certificates have a variable rate. All rates subject to change.
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