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 $7,000 in 2024 — or $8,000 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. You can choose from traditional or Roth IRAs to contribute to. You may have also inherited one or both of those IRA types, you cannot contribute to the inherited traditional or Roth IRA. 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 Investments Group financial advisor, please call 1-888-294-0202 today.

¹Past results are not necessarily indicative of future gains.

Investment products are not insured by the FDIC, NCUA or any federal agency, 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 Services has a partnership with this financial institution to provide financial planning services and solutions to clients. The financial institution is not an investment client of Ameriprise but has a revenue sharing relationship with us that creates a conflict of interest. Details on how we work together can be found on ameriprise.com/sec-disclosure.

This information is being provided only as a general source of information and is not a solicitation to buy or sell any securities, accounts or strategies mentioned. The information is not intended to be used as the sole basis for investment decisions, nor should it be construed as a recommendation or advice designed to meet the particular needs of an individual investor. Please seek the advice of a financial advisor regarding your particular financial situation.

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.