Understanding the Difference Between IRAs

Individual retirement accounts, commonly known as IRAs, are worth considering if you’re thinking about how to save for your retirement. In fact, IRAs are one of the most powerful retirement savings tools, and investors can choose from several different varieties.

Both traditional and Roth IRAs allow you to make annual contributions of up to $6,000 in 2020 — or $7,000 if you will be age 50 or older at any time during the calendar year.

The first step to opening an IRA is to identify the type of IRA that is appropriate for you. From traditional and Roth to inherited IRAs, there are a number of options that are available. Once you’ve made the decision to start contributing to an IRA, the next step may be to choose between opening an IRA with the Credit Union or through RBFCU Investments Group, a financial advisory practice of Ameriprise Financial Services, LLC. Your dedication to regular contributions, coupled with a reasonable rate of return, may help increase the longevity of your income during retirement.

As a member of RBFCU you can contribute to an IRA and place your money in an NCUA-insured savings account or a certificate of deposit. Compared to investments in the stock market, these are lower-risk accounts that typically can provide more stable and modest yearly returns. Dependent upon your retirement goals, your financial health and life stage, Credit Union IRAs may be a good fit.

The alternative would be to contribute to an IRA, which consists of a variety of financial options, including stocks, mutual funds, bonds, annuities and other investment products. By considering an appropriate amount to invest in a diversified portfolio, these products give your IRA the potential to grow. Yes, stock prices can have bigger price swings than cash alternatives such as savings or certificates; however, stocks historically have provided higher long-term returns than cash alternatives.1

So, which IRA is best for you? Sometimes the choice is easy. Often times, it’s important to consult a qualified financial advisor to help you decide on the right type of IRA.

To schedule a no-cost, no-obligation initial consultation with an RBFCU Financial Advisor, please call 1-888-294-0202 today.

1Past results are not necessarily indicative of future gains.

Investment products are not federally or NCUA-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Ameriprise Financial is not affiliated with the financial institution.

RBFCU Investments Group is a financial advisory practice of Ameriprise Financial Services, LLC.

The initial consultation provides an overview of financial planning concepts. You will not receive written analysis and/or recommendations.

Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.