Individual Retirement Accounts (IRAs) at TPFCU
The People’s Federal Credit Union offers IRAs to help members save for retirement or for education expenses, with some of the best IRA rates in Texas.
We currently offer three types of individual retirement accounts:
- Traditional IRAs
- Roth IRAs
- Coverdell Education Savings Account (ESA) IRAs to cover future education expenses such as tuition, books, or uniforms
By investing in an IRA program, you can ensure that your savings grow in a tax-advantaged manner, preparing you for financial independence in your later years. TPFCU in Amarillo, TX understands that every member’s retirement needs are unique, which is why we provide flexible IRA options to build a solid foundation for your future.
Traditional IRAs
A traditional IRA is a tax-advantaged retirement account that allows individuals to prepare for retirement with pre-tax contributions. In addition to tax deductible contributions, you’ll see the following traditional IRA benefits:
- Enjoy tax-free growth as you earn interest and dividends.
- Once you make a contribution, your funds won’t be subject to income taxes until any earnings or deductible contributions are distributed.
The IRS sets annual contribution limits for traditional IRA accounts, and these limits may change. To be eligible, you must have earned income, and your contributions may be fully or partially deductible depending on your income level and any employer retirement coverage for you or a spouse. Starting at age 73, you must withdraw money at minimum amounts from your IRA, known as required minimum distributions (RMDs), to avoid penalties.
Education IRAs
An education IRA, also known as a Coverdell Education Savings Account (ESA), is a tax-advantaged account designed to help families save for future educational costs. Save for your child’s future and primary, secondary, or higher education and use the money tax-free for qualifying expenses.
An education IRA is an option that:
- Can be used by parents, grandparents, aunts, uncles, and other family members and friends.
- Allows you to contribute up to $2,000 per year, per child under 18.
- Lets you contribute apart from a personal savings plan or employer-sponsored plan.
With an education IRA, your contributions grow tax-free as long as the funds are used for eligible education expenses like tuition, books, and uniforms. These expenses include not only college but also primary and secondary school costs, making this account a flexible way to save for a child’s education. Starting early helps families build significant savings and secure a strong financial future for their child’s education while taking advantage of tax benefits.
Roth IRAs
A Roth IRA is a retirement savings account that allows you to contribute post-tax income, offering tax-free growth and tax-free withdrawals in retirement if certain conditions are met. Your retirement savings are protected because earnings on your investment aren’t subject to federal income taxes. Plus, your contributions can be withdrawn anytime with no taxes or penalties, making it easier to access what you save for retirement.
Roth IRA benefits include:
- Contributions can be made as long as you’re earning income.
- There’s never any required minimum distribution (RMD).
- You can pass on tax-free distributions to beneficiaries.
Planning for retirement is possible, yet you can access your savings now.
Apply for a Roth IRA
Roth IRAs have specific eligibility requirements, such as income limits, which determine whether you can contribute the full amount or a reduced amount. The IRS also sets an annual contribution limit, depending on your age. Our Amarillo, Texas credit union can keep you up to date with the latest limits for the calendar year.
One of the key advantages of a Roth IRA is the flexibility in withdrawal rules—qualified withdrawals in retirement are tax-free and can be withdrawn at any time without penalty. This makes Roth IRAs a powerful tool for diversifying your retirement income, ensuring a mix of tax-free and potentially taxable income streams in your retirement years.
IRA Certificates of Deposit (CDs)
We also offer an IRA certificate of deposit with a 12-month term, automatic renewal, and a $10,000 minimum deposit that pays competitive quarterly dividends. Like a standard certificate account, this is a high-yield account that earns more interest than a basic savings account. See our IRA certificate of deposit rates below.
There are many regulations that apply to IRAs. For more information, contact member services.
| Term | Dividend | APY * |
| 12 Months | 3.80% | 3.85% |
Who Is Eligible and How Do I Apply?
To open an IRA at TPFCU, you must have earned income (meeting a low minimum balance) and be at least 18 years old. The application process is straightforward—visit a local branch in Amarillo, Texas or call 806-359-8571. You’ll need identification, your Social Security number, and proof of income.
If you’re not sure which kind of account to apply for, here’s a guide to who is best suited to each type:
- Traditional IRA: Best for those looking for tax deductions now and lower taxes in retirement.
- Roth IRA: Ideal for those wanting tax-free growth and flexible withdrawals in retirement.
- Coverdell ESA: Great for parents who want to save toward a child’s education.
Grow Your Retirement Savings with an IRA from Our Amarillo, TX Credit Union
Individual retirement accounts have unique tax advantages and provide you with much-needed retirement income later. With TPFCU’s competitive rates, tax benefits, and personalized service, our IRAs offer a great way to grow your savings and achieve your retirement goals. Feel free to browse for more information and compare IRA rates. For additional benefits, start your application with our Texas credit union, or call 806-359-8571 for assistance.
IRA FAQs
An individual retirement account (IRA) is a savings account with tax advantages that individuals can open to save and invest in the long term to plan retirement.
The benefits of an IRA include possible tax deductions, tax-deferred or tax-free growth on earnings, and tax credits if the individual is eligible.
The more common types of IRAs include traditional IRA, nondeductible IRA, and Roth IRA. The less common types include spousal IRA, Simplified Employee Pension (SEP) IRA, education IRA, and SIMPLE IRA.
TPFCU offers only traditional, Roth, and education (ESA) IRAs.
You can make a deposit at any branch location at any time. You can also set up your payroll to transfer money to your IRA each paycheck or set up a monthly transfer contribution. There are annual contribution limits that are subject to change with each change to the tax laws. To see the most current contribution limits for traditional and Roth IRAs, you can visit the IRS website: Retirement Topics – IRA Contribution Limits | Internal Revenue Service (irs.gov)
Your first RMD must be taken by April 1st of the year after you turn 72 years old. RMDs must be taken by December 31st of each year thereafter. You may take your distribution monthly, quarterly, or annually.
You must be at least 18 to set up and contribute to your IRA. While minors generally cannot open an IRA in their own name until they are 18, there is an option for the parent or guardian to open an education (ESA) IRA in the minor’s name, which they would be able to use for educational purposes.
Generally, early withdrawal from an IRA prior to age 59 ½ is subject to being included in gross income plus a 10% additional tax penalty.
If you meet eligibility requirements, such as having earned income, you can contribute to both a Roth and a traditional IRA simultaneously. However, the total contributions you make each year to all of your traditional and Roth IRAs must not be more than the allotted annual contribution limit.
With a traditional IRA, you pay taxes when you withdraw funds in retirement. With a Roth IRA, contributions are taxed upfront, but withdrawals are tax-free.
TPFCU requires a deposit of $100.00 to open an IRA.
The IRS determines each year the contribution limits (deposit) for IRAs for that year. You can find the most up-to-date information in regard to limits on the IRS website at: Retirement Topics – IRA Contribution Limits | Internal Revenue Service (irs.gov)
Yes, the rate depends on the financial institution’s interest rates for the IRA. Continue browsing to compare IRA rates and choose from credit union retirement plans that work for you.
You can consolidate retirement accounts by transferring money from multiple accounts into one established IRA. You can direct transfer to the new IRA from the old one. However, if you do a rollover transaction (which means you have access to the funds or the check is made payable to you) then you are only allowed one of these types of transactions in a 12-month period.
Please ask your TPFCU member service representatives for guidance on the best option for rolling over or transferring your IRAs.
