- Series EE and Series I Savings Bonds and the Education Tax Exclusion
- Tax-Advantaged Education Plans
- Cash Value Life Insurance
- Roth IRAs
Retirement plans including traditional 401(k)s and deductible IRAs, grow tax-deferred. In addition, there are certain investments which earn income that is not currently taxable, such as Series EE and Series I Savings Bonds, certain tax favored education plans, annuities, and cash value life insurance. And, if the Series EE and Series I savings bonds and education plans are used for college, you may never pay tax on the income.
Roth 401(k)s, Roth 403(b)s, and Roth IRAs are considered tax-free investment accounts. Provided you adhere to the holding period requirements established by the IRS, qualified withdrawals from this type of IRA are never taxed.
SUGGESTION: The monies in your retirement plans are growing on a tax-deferred basis (tax-free in a Roth 401(k), Roth 403(b), and Roth IRA); that is, the earnings are not being taxed while they are in the retirement plan. Since you're already getting a tax-deferred benefit, don't invest any of your funds in tax-exempt investments within a retirement account. It may be prudent to consider investing in higher yield taxable investments.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a Registered Broker-dealer (Member FINRA/SIPC) and SEC-registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. General Electric Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
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