FAQ’s

What is an IRA?

An Individual Retirement Account that provides either a tax-deferred or tax-free way of saving for retirement. There are many different types of accounts within the world of IRAs, depending on the financial goals and situations of each individual, though traditional and Roth IRAs are the most common choices.

What is Form 5498 and, why did I receive one?

Form 5498 is used to report to the IRS; the Fair Market Value (FMV) of IRAs and, any regular or rollover contributions made to IRAs for the prior tax year. This form is generally mailed in late-May, as we are required to include any contributions made for the prior tax year (which may be made up until mid-April of the next year).

Do I need Spousal Consent and Notarization for my Beneficiary Designation?

If you live in a community property or marital property state (currently: AZ, CA, ID, LA, NV, NM, TX, WA, WI), you must obtain spousal consent in order for your beneficiary designation to be valid. Depending on the laws of your particular state, you may also need that consent to be notarized by a Notary Public.

How can I contribute to my IRA?

You may contribute funds every year you receive IRS-defined compensation until you turn 70. Funds and property from other retirement accounts can also be transferred or rolled over in the new account. You may access the Contribution Form, here.

What is considered Earned Income?

Earned income is an IRS term for income that is obtained by participating in a business or trade. Earned income typically includes salaries and bonuses, wages, commissions and tips.

For more information, visit the IRS website:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income

What are Required Minimum Distributions (RMDs) and, do I need to take them?

Required Minimum Distributions are the US Government’s way of ensuring that taxes are eventually collected on all tax advantaged retirement savings accounts, including IRAs. Generally, you must begin withdrawing a portion of your retirement savings the year in which you turn age 70½. Click the following link for more information on Understanding RMDs.

60 Day Rollover

The rules regarding IRA rollovers and transfers allow the IRA owner to perform an “indirect rollover” to another IRA. An indirect rollover can be used to temporarily “borrow” money from the IRA, once in a twelve-month period. The money must be placed in an IRA account within 60 days, or the transaction will be deemed an early withdrawal (subject to the appropriate withdrawal taxes and penalties) and may not be replaced.

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