Terms to know: IRA: Individual Retirement Account HSA: Health Savings Account Traditional IRA: Allows you to save for your own retirement with tax-deferred earnings and a possible tax deduction. The main advantage includes being eligible to deduct contributions on your federal income tax return or qualifying for a tax credit of up to $1000. Each year, an annual contribution limit is determined by the IRS. As of 2025, the current limit is $7000, or $8000 if you are 50 or older. Roth IRA: Helps you save for retirement with the potential for future tax-free income. Advantages include tax free distributions, not being required to take money out and a possible tax credit of up to $1000. Each year, an annual contribution limit is determined by the IRS. As of 2025, the current limit is $7000, or $8000 if you are 50 or older. Coverdell ESA: An easy way to start saving for a child’s education. Contributions and earnings are tax free when being used for qualified education expenses. As of 2025, $2000 may be contributed to this type of IRA on an annual basis. *Our 3 types of IRA accounts are also able to take advantage of our great CD rates. HSA: A savings account for medical expenses if you have a high-deductible health plan. Tax deduction for contributions. The contributions remain in your account until you use them. The interest earnings are tax free. Distributions are tax free if you pay for a qualified medical expense. Annual contribution limits vary year-to-year. In 2025, self-coverage is $4300 or $5300 if age 55 or older. Family coverage is $8550 or $9550 if age 55 or older. *All of these accounts allow beneficiaries for added peace of mind. If you are interested in setting up an IRA or HSA, stop into a branch or give us a call! Katherine Loehr Loan and Account Servicing Specialist This blog is not on behalf od Peninsula Federal Credit Union.
