Individual Retirement and Savings Tools You Need to Know

What resources do you plan on using in retirement to meet your needs along the way? A study in 2020 shows that 40% of Americans will rely exclusively on Social Security in retirement. More research in 2024 showed that only 15% of Americans do not plan to rely on Social Security. That same research discovered that 73% of Social Security beneficiaries do not expect to receive their full benefit in the future due to the underfunding of Social Security. Meanwhile, only about half of Americans participate in employer-sponsored retirement plans. With varied potential sources of retirement income, it is wise to consider all the options available to bolster your savings for the future.

Pension Fund has three individual products that do not have to be offered by the employer, which could be a valuable part of your retirement savings plan.

Traditional and Roth Individual Retirement Accounts (IRA)

IRAs play an essential role in U.S. households’ retirement savings: In mid-2024, 44 percent of U.S. households owned IRAs. IRAs are retirement savings products that can supplement employer-sponsored retirement plans or offer an opportunity to save if you do not have access to savings through your employer. IRAs are accounts that are not tied to an employer. IRAs can be used to roll over previous employer retirement accounts and organize your retirement savings in one place. In the case of a traditional IRA, you can also reap the tax advantages of tax deferment or tax-free growth and withdrawals. You can contribute up to $7,000 annually, or $8,000 if you are over 50, as a combined limit for all IRAs, Traditional or Roth. You must also have earned income to make contributions to an IRA. Advantages of an IRA include:

• Ability to enroll as an individual, not dependent on an employer

• If you change jobs, your money stays with you

• Make contributions on your own schedule or roll over funds from another account

• Can be used as an estate planning tool – choose your beneficiary

• Choose from Traditional or Roth IRA

• Spouses can open their own IRA

To learn more about whether a Traditional or Roth IRA is right for you, visit the compare products page.

Beneficial Accumulation Account (BAA)

In addition to retirement savings, it is important to save for the near future as well. According to Bankrate, more than 1 in 3 Americans needed to tap their emergency savings in the past year. Having a way to save for both expected and unexpected expenses is important. The BAA is a high-yield savings account that allows you to save for all of your financial goals. Goals in the short- and medium-term may include travel costs, education, health care expenses, and unexpected emergencies. This product is great for individuals who want to save for unforeseen expenses, earn competitive interest rates, and have easy access to their funds. Key advantages to the BAA include:

• Penalty-free withdrawals at any time*

• No age or income limits for contributions

• Rates of return between 1% and 6%, with the opportunity for additional earnings from Good Experience Credits (additional earnings are awarded by the Board of Directors when reserves are sufficient)

Consider meeting with one of the Your Money Line financial guides, who can help you with a budgeting and savings strategy that will meet your financial needs and aspirations as you plan for the future.