Frequently Asked IRA Questions

Below are common questions concerning IRA's and 401k's. For additional help, please contact Client Support at (206) 596-2110 Ext. 1


When you rollover a retirement plan distribution, you generally don’t pay tax on it until you withdraw it from the new plan.

By rolling over, you’re saving for your future and your money continues to grow tax-deferred.

If you don’t rollover your payment, it will be taxable (other than qualified Roth distributions and any amounts already taxed) and you may also be subject to additional tax unless you’re eligible for one of the exceptions to the 10% additional tax on early distributions.

If you have a Traditional IRA, you'll pay ordinary income tax on withdrawals of all earnings and on any contributions you originally deducted on your taxes. There is a 10% federal penalty on withdrawls taken prior to your reaching age 59½.

If you have a ROTH IRA, you'll never pay taxes or penalities on withdrawals of your contributions. And you won't pay taxes on withdrawals of your earnings as long as you take them after you've reached age 59½ and owned the account for at least 5 years.

If you have a Traditional IRA, yes, starting the year you reach age 70½. Otherwise, if you have a ROTH IRA, the answer is no.

Yes, as long as you're under age 70½. Also, the amount of your contribution can't exceed the amount of income you earned that year (or that your spouse earned, if you're not working anymore). In addition, you're subject to annual traditional IRA limits ($5,500 for 2013, $6,500 if you're age 50 or older).

You can rollover into a traditional IRA (tax-free) if you were previously investing in a "traditional" 401k or 403(b) where you worked. You can't rollover into a traditional IRA from a Roth 401k or Roth 403(b).

You must rollover into a Roth IRA (tax-free) if you were previously investing in a Roth 401k or Roth 403(b) where you worked. You can also rollover into a Roth IRA if you were previously investing in a "traditional" 401k or 403(b), but this will be considered a Roth conversion and you'll have to pay taxes.

Yes. You can close your account at any time. Management fees will be prorated up to the date of closure.

Your assets are held with Interactive Brokers LLC, and independent custodian that will also provide account statements and tax documents. Interactive Brokers is a FINRA registered Broker-Dealer and all accounts are covered by SIPC insurance. Read more about Custody at Interactive Brokers.

Our system is regularly analyzing your account and will make adjustments to your holdings based on requirements in your Plan, price movements, and whenever we think an investment is better, or no longer, suitable for your account.

Combining like IRA accounts is perfectly legal and may be optimal for simplicity. Traditional IRAs and Rollover IRAs can be combined, and Roth IRAs can be combined. However, if you keep Rollover IRA's separate and later sign up for a 401(k) at a new employer, your can roll over the IRA to the new 401(k). Additionally, there is protection from creditors afforded to 401(k), and possibly your 401(k) rollover, if the money is kept separate.