ING IRA Rollover
 Take control of your 401(k)
retirement account with an
ING IRA Rollover Account.
To get started with your ING IRA Rollover, give us a call at (800) 464-7511 to speak to a financial advisor.
By opening an ING IRA Rollover
Account*, we will:
- Start the IRA Rollover transfer process:
We will explain your 401k retirement account transfer and withdrawal options, and assist you in completing the appropriate IRA Rollover transfer paperwork to avoid taxes and / or penalties that map apply to the withdrawal.
- Provide professional investment advice to your IRA Rollover:
We will advise and recommend an investment strategy to your IRA Rollover within your risk tolerance, and guide you through the ups and downs of the market in order to help secure your retirement income. Some of the investment options you have are Stocks, Bonds, Mutual Funds, ETFs, Annuities, Money Market and CDs
- Set-up appropriate IRA Rollover beneficiaries:
We will consult you regarding the designation of your primary and contingent beneficiaries to your IRA Rollover to avoid disinheriting your family members, including your spouse. We can also keep your IRA Rollover assets within the family by implementing a stretch IRA account.
- Present conversion options (IRA to Roth IRA):
Discuss the pros and cons of converting your current IRA to a Roth IRA.
- Plan your IRA distributions
We will present you with an Early Retirement Planning options and explain how you can receive income from your IRA before age 591/2 without paying a 10% penalty. We will also calculate your IRA RMD (Required Minimum Distribution).
To get started with your ING IRA Rollover, give us a call at (800) 464-7511 to speak to a live advisor.
* Withdrawals from qualified accounts will be subject to income tax, prior to age 59 ½, may be subject to 10% IRS penalty tax. You should consider the investment objectives, risks, and charges and expenses of mutual funds offered through a mutual fund carefully before investing. The fund prospectus(es) contains this and other information, which you should be able to obtain by contacting your local financial representative. You should read the prospectus (es) carefully before investing. Request fund Prospectuses
What Is an IRA Rollover?
If you leave a job or retire, you might want to transfer the money you’ve invested in one or more employer-sponsored retirement plans to an individual retirement account (IRA). An IRA rollover is an effective way to keep your money accumulating tax deferred.
Using an IRA rollover, you transfer your retirement savings to an account at a private institution of your choice, and you choose how you will invest the funds. To preserve the tax-deferred status of retirement savings, the funds must be deposited in the IRA within 60 days of withdrawal from an employer’s plan. To avoid potential penalties and a 20% federal income tax withholding from your former employer, you should arrange for a direct, institution-to-institution transfer.
Previously, you were only able to roll over funds from an employer-sponsored plan to a traditional IRA. However, starting in 2008, direct rollovers to a Roth IRA will be allowed (of course, income limits apply to Roth IRA rollovers until 2010, when they are repealed, and ordinary income taxes are owed on all amounts rolled over to a Roth IRA).
An IRA can be tailored to your particular needs and goals and can incorporate a variety of investment vehicles, as opposed to the limited number of options available in many employer-sponsored retirement plans. In addition, tax-deferred retirement savings from multiple employers can later be consolidated.
Over time, IRA rollovers may make it easier to manage your retirement savings by consolidating your holdings in one place. This can help cut down on paperwork and give you greater control over the management of your retirement assets.
Distributions from traditional IRAs are taxed as ordinary income and may be subject to an additional 10% federal income tax penalty if taken prior to reaching age 59½. Just as with employer-sponsored retirement plans, you must begin taking required minimum distributions from a traditional IRA each year after you turn age 70½.*
Qualified distributions from a Roth IRA are free of federal income tax but may be subject to state, local, and alternative minimum taxes. To qualify for a tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase ($10,000 lifetime maximum). The mandatory distribution rules that apply to traditional IRAs do not apply to Roth IRAs.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
*The Worker, Retiree, and Employer Recovery Act of 2008 suspends required minimum distributions for the 2009 tax year.
What Is a Roth IRA?
Roth IRAs are tax-favored financial vehicles that enable investors to save money for retirement. They differ from traditional IRAs in that taxpayers cannot deduct contributions made to a Roth. However, qualified Roth IRA distributions in retirement are free of federal income tax and aren’t included in a taxpayer’s gross income. That can be advantageous, especially if the account owner is in a higher tax bracket in retirement or taxes are higher in the future.
A Roth IRA is subject to the same contribution limits as a traditional IRA ($5,000 in 2009). Special “catch-up” contributions enable those nearing retirement (age 50 and older) to save at an accelerated rate by contributing $1,000 more than the regular annual limits.
Another way in which Roth IRAs can be advantageous is that investors can contribute to a Roth after age 70½ as long as they have earned income, and they don’t have to begin taking mandatory distributions due to age, as they do with traditional IRAs.
Roth IRA withdrawals of contributions (not earnings) can be made at any time and for any reason; they are tax-free and not subject to the 10% federal income tax penalty for early withdrawals. After a minimum five-year holding period but before age 59½, tax-free and penalty-free withdrawals of earnings can be made due to a qualifying event, such as death or disability or to purchase a first home (up to a $10,000 lifetime cap).
Although college expenses are not a qualifying event, Roth IRA account owners can withdraw earnings penalty-free for qualifying higher-education expenses (for the account owner, a spouse, a child, or a grandchild). However, these withdrawals would be subject to ordinary income tax.
To qualify for a tax-free and penalty-free withdrawal of earnings in retirement (after age 59½), a Roth IRA must have been in place for at least five tax years.
Keep in mind that even though qualified Roth IRA distributions are free of federal income tax, they may be subject to state and/or local income taxes. Eligibility to contribute to a Roth IRA phases out for taxpayers with higher incomes.
If you’re looking for a retirement savings vehicle with some distinct tax advantages, the Roth IRA could be appropriate for you.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
What Is a Traditional IRA?
Traditional individual retirement accounts (IRAs) can be a good way to save for retirement. If you do not participate in an employer-sponsored retirement plan or would like to supplement that plan, then a traditional IRA could work for you.
A traditional IRA is simply a tax-deferred savings account that is set up through an investment institution and has several investing options. For instance, an IRA can include stocks, bonds, mutual funds, cash equivalents, real estate, and other investment vehicles.
One of the benefits of a traditional IRA is the potential for tax-deductible contributions. In 2010, you may be eligible to make a tax-deductible contribution of up to $5,000 ($6,000 if you are 50 or older). Contribution limits are indexed annually for inflation.
You can contribute directly to a traditional IRA or you can transfer assets directly from another type of qualified plan, such as a SEP or a SIMPLE IRA. Rollovers may also be made from a qualified employer-sponsored plan, such as a 401(k) or 403(b), after you change jobs or retire.
Not everyone contributing to a traditional IRA is eligible for a tax deduction. If you are an active participant in a qualified workplace retirement plan — such as a 401(k) or a simplified employee pension plan — your IRA deduction may be reduced or eliminated, based on your income.
For example, if your modified adjusted gross income (AGI) is $56,000 or less as a single filer ($89,000 or less for married couples), you can receive the full tax deduction. On the other hand, if your AGI is more than $66,000 as a single filer ($109,000 for married couples), you are not eligible for a tax deduction. Partial deductions are allowed for single filers whose incomes are between $56,000 and $66,000 (or between $89,000 and $109,000 for married couples filing jointly). If you are not an active participant in an employer-sponsored retirement plan, you are eligible for a full tax deduction.
Nondeductible contributions may necessitate some very complicated paperwork when you begin withdrawals from your account. If your contributions are not tax deductible, you may be better served by another retirement plan, such as a Roth IRA.
The funds in a traditional IRA accumulate tax deferred, which means you do not have to pay taxes until you start receiving distributions in retirement, a time when you might be in a lower tax bracket. Withdrawals are taxed as ordinary income. If taken prior to age 59½, withdrawals may also be subject to a 10% federal income tax penalty. Exceptions to this early-withdrawal penalty include distributions resulting from disability, unemployment, and qualified first home expenses ($10,000 lifetime limit), as well as distributions used to pay higher-education expenses.
You must begin taking annual required minimum distributions (RMDs) from a traditional IRA after you turn 70½ (starting no later than April 1 of the year after the year you reach 70½), or you will be subject to a 50% income tax penalty on the amount that should have been withdrawn. Of course, you can always withdraw more than the required minimum amount, or even withdraw the entire balance as a lump sum.
An IRA can be a valuable addition to your retirement and tax management efforts. By working with a financial advisor, you can determine whether a traditional IRA would be appropriate for you.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
This material was written and prepared by Emerald.
© 2010 Emerald
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