IRAs: Roth IRAs & Traditional IRAs

Individual Retirement Agreement (IRA) savings accounts may be opened at any time with a deposit of $10 or more. Funds can also be invested in IRA certificates starting at $500, and earn the same favorable rates and terms as our regular share certificate accounts.

Roth IRA vs. Traditional IRA   Which IRA is right for you?
    Roth IRA 
 Yearly contribution for 2020 is $6,000, or $7,000. if you are 50+ 
 Contributions are not-tax-deductible.
 Contributions generally can be distributed tax-free at any time.
 Earnings grow tax-deferred.
 Earnings can be distributed tax-free if the Roth IRA owner first made a Roth IRA contribution at least  five years ago, and is age 59 ½ or older, disabled, deceased, or qualifies as a first-time home-buyer.
 Distributions are not required until after the Roth IRA owner dies.

    Traditional IRA
 Yearly contribution for 2020 is $6,000, or $7,000. if you are 50+
 Contributions may be tax-deductible.
 Earnings grow tax-deferred.
 Distributions generally are taxable.
 Distributions before you reach age 59 ½ are subject to penalty tax, unless you have an early distribution penalty tax exception.
 Required minimum distributions must begin at age 72.

"The Coronavirus Aid, Relief and Economic Security Act (CARES Act) waives required minimum distributions during 2020 for IRAs & retirement plans." - the IRS 7/17/20  See further details @

Coverdell Education Savings Accounts (ESA)

A Coverdell ESA can help you save for a child's education expenses including tuition & fees, books, tutoring, supplies, technology, equipment, internet access, related services, uniforms, transportation, supplementary items, room & board (limits apply). They may be used for elementary, secondary and higher education expenses (public & private schools).

With an ESA you make nondeductible contributions that provide the potential for tax-free withdrawals - including earnings - down the road*. 

Who Can Contribute to an ESA? Anyone can contribute to a child's ESA; family & non-family alike, as long as the contributor's modified adjusted gross income (MAGI) falls below or within the applicable income limits*. 

* This is not intended as tax advice. Please consult your tax professional to determine your eligibility.

CT State IRA Withholding Change effective January 1, 2018

Attention WCTFCU Members who are receiving distributions from their Traditional IRAs


RE: Your Traditional IRA, and the 2018 State of Connecticut IRA Withholding Change

The following change to the CT State standards for IRA required minimum distribution only affects those who make withdrawals from Traditional IRA’s:

  • persons receiving Required Minimum Distribution’s
  • persons that make withdrawals from their Traditional IRA’s

Under current law (until 12/31/17 11:59pm), Connecticut is a voluntary/mandatory state, in that Connecticut tax is withheld from the distribution only when the IRA owner elects a set dollar amount of withholding.

Effective January 1, 2018
 Individual Retirement Account (IRA) distributions are subject to mandatory Connecticut withholding for IRA owners that reside in Connecticut and maintain an IRA at a Connecticut branch.

Under the new requirements (effective 1/1/18), lump-sum distributions will be subject to Connecticut withholding at a rate of 6.99 percent. (Lump-sum distributions are defined as complete distributions of an entire IRA balance.)

All other distributions will be subject to wage-based withholding in accordance with the elections made by the IRA owner on Form CT-W4P, Withholding Certificate for Pension and Annuity Payments.

If Form CT-W4P is not completed, the mandatory 6.99 percent will be withheld.

Mailed To You
 If you are a 70 ½ year old WCTFCU Member, who has a WCTFCU IRA, we mailed you (week of 12/25/17) a detailed letter, along with a CT-W4P Form for you to complete and return in the enclosed envelope.

 If you have any questions please contact us directly at 800.992.2226. We will be glad to assist.