Retirement Planning for All of Life's Stages

Retirement FAQ

What's the Difference Between a Traditional IRA and a Roth IRA?

For information on the differences between IRA types, see Traditional and a Roth IRAs.

What Are the Tax Penalties for Early Withdrawal From an IRA?

The law imposes a 10% tax penalty on early withdrawals. Additionally, you incur a tax penalty for withdrawing your money before you turn 59 1/2, unless your withdrawal meets one of the standard exceptions.

What is the Annual Deadline for Contributing to My Traditional or Roth IRA?

You can make annual contributions to a Traditional or Roth IRA from January 1 until the tax-filing deadline for the contribution year, which is usually April 15.

What is a Rollover?

Most pre-retirement payments you receive from a retirement plan or IRA can be "rolled over" by depositing the payment in another retirement plan or IRA within 60 days. You can also have your financial institution or plan directly transfer the payment to another plan or IRA. When you roll over 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 roll over 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.

How Do I Complete A Rollover?

• Direct rollover – If you're getting a distribution from a retirement plan, you can ask your plan administrator to make the payment directly to another retirement plan or to an IRA. Contact your plan administrator for instructions. The administrator may issue your distribution in the form of a check made payable to your new account. No taxes will be withheld from your transfer amount.
• Trustee-to-trustee transfer – If you're getting a distribution from an IRA, you can ask the financial institution holding your IRA to make the payment directly from your IRA to another IRA or to a retirement plan. No taxes will be withheld from your transfer amount.
• 60-day rollover – If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it in an IRA or a retirement plan within 60 days. Taxes will be withheld from a distribution from a retirement plan (see below), so you'll have to use other funds to roll over the full amount of the distribution. There are restrictions that apply as to how often a 60 day rollover is allowed.