Planning for retirement can feel a little like trying to think about future you while right‑now you is just trying to get through the week. It’s easy to push it off, and honestly, most people do. In fact, a surprising number of Americans haven’t saved anything for retirement yet.
But there’s a bright side: Getting started doesn’t have to be overwhelming. Once you understand your options, saving for the future becomes a lot more doable — and maybe even a little empowering. At ICCU, we’re here to make the process simple, clear, and stress‑free.
Let’s walk through the most common retirement accounts and what they actually mean for you.
Retirement Accounts at a Glance
- A 401(k) is an employer‑sponsored retirement plan that lets you save money before taxes.Contributions come straight from your paycheck, making it one of the easiest ways to build long‑term savings if your workplace offers it.
- A Traditional IRA lets your money grow tax‑deferred and may offer a tax break now. Anyone with earned income can open one, and it’s a flexible option if you want to save outside of an employer plan.
- A Roth IRA uses after‑tax contributions, which means most withdrawals in retirement are completely tax‑free. It’s a “pay now, enjoy later” approach, though income limits do apply.
- A SEP IRA is designed for self‑employed workers and small business owners who want a simple, low‑maintenance way to save for retirement — for themselves and their employees.
What Retirement Account Options Do I Have?
When it comes to saving for retirement, you’ve got more than one path to choose from. We’ll walk through four of the most common options: a 401(k), a Traditional IRA, a Roth IRA, and a SEP IRA. Each one works a little differently, but the goal is the same: helping future you feel supported.
401(k)
A 401(k) is usually the first thing people think of when they hear “retirement plan.” You’ve probably heard the term a hundred times, but what does it actually mean?
A 401(k) is an employer-sponsored retirement plan that lets you save and invest money before it’s taxed. In other words, your contributions come straight out of your paycheck, and you won’t pay taxes on that money until you withdraw it later in life. For many people, this makes a 401(k) the simplest way to start saving. It’s automatic, it’s consistent, and it’s already built into their workplace benefits.
That said, a 401(k) isn’t a one‑size‑fits‑all solution. A few things to keep in mind:
- You can only open one through an employer. If your workplace doesn’t offer a retirement plan, you can’t set up a 401(k) on your own.
- There are annual contribution limits. For 2026, you can contribute up to $24,500, plus an additional $8,000 if you’re 50 or older. Some employers may set lower limits based on their plan rules.
If a 401(k) doesn’t cover all your retirement goals, or you simply want more flexibility, there are other options worth exploring.
Traditional IRA
A Traditional IRA is a solid option if you want your money to grow tax‑deferred, especially if you like the idea of possibly deducting your contributions at tax time. It’s the most common type of IRA, and it’s been around since 1975, which is why people often think of it as the “regular” IRA.
Here’s how it works:
You contribute money before it’s taxed, similar to a 401(k). Then, once you start taking money out in retirement, that’s when the taxes kick in. One of the biggest perks? Anyone can open and contribute to a Traditional IRA, no matter your income level.
You can contribute to a Traditional IRA up to the annual limit set by the IRS, or up to 100% of your earned income, whichever is lower. And once you turn 50, you’re allowed to make additional “catch‑up” contributions to help boost your savings as retirement gets closer.
Roth IRA
A Roth IRA is a great option if you want the freedom of tax‑free withdrawals in retirement. Unlike a Traditional IRA, your contributions to a Roth IRA are made after taxes. That means you pay taxes on the money now, and in return, your future qualified withdrawals — including any investment earnings — come out completely tax‑free. It’s a “pay now, relax later” kind of setup.
One thing to know: Roth IRAs do have income limits, so not everyone qualifies to contribute directly.
You can contribute up to the annual limit set by the IRS, or up to 100% of your earned income — whichever is lower. And just like with a Traditional IRA, once you turn 50, you’re allowed to make additional “catch‑up” contributions to help boost your savings. If you have both a Traditional and a Roth IRA, your combined contributions can’t exceed your total annual limit.
Still not sure about the difference between Traditional and Roth IRAs? Put simply: With a Traditional IRA you get the tax break now, and with a Roth IRA you get it later.
SEP IRA
A SEP IRA can be a great fit if you’re self‑employed or run a small business and want a simple way to save for retirement. “SEP” stands for Simplified Employee Pension — and that’s exactly the goal. It’s a type of Traditional IRA designed to make retirement contributions easier for small employers who may not have the time or resources for a more complex plan.
With an SEP IRA, business owners can contribute to their employees’ retirement accounts as well as their own. And if you’re self‑employed, you can set up an SEP IRA and make contributions to your own account. One of the biggest advantages is how straightforward it is to establish and maintain compared to other employer‑sponsored plans.
How Can ICCU Help with my Retirement?
Retirement planning comes with a lot of questions, and you don’t have to sort through them alone. Our team is always here to walk you through the basics, explain how different accounts work, and help you understand what options might fit your goals. (Of course, when it comes to choosing between a Traditional or Roth IRA, we still encourage you to check in with your tax advisor. They can help you decide what makes the most sense for your situation.)
At ICCU, we’re all about helping members build a strong financial future, and an IRA can be a simple, steady way to get there. We offer several types of IRAs — including Traditional, Roth, and SEP — along with a variety of savings options like IRA Share Savings, IRA Money Market Savings, and IRA CDs. It’s all designed to give you flexibility as you plan for the years ahead.
When you’re ready to get started, you can open an account at any ICCU branch, connect with us through VideoChat, or give us a call. We’re here to make the process easy.
