Frequently Asked Questions: IRAs
What types of Retirement Accounts does Vision provide?
Vision offers the following Retirement Accounts:
- IRA (Traditional & Roth)
- Rollover IRA
- SEP IRA
- Beneficiary IRA
What is an IRA account?
An Individual Retirement Account ("IRA") is an account that is designed to help individuals save money for retirement You can make a contribution of 100% of earned income up to $5,000 per year for tax year 2008 and 2009 ($6,000 for individuals over the age of 50). Depending on your income level the contributions may be tax deductible. The earnings in the IRA account accumulate on a tax deferred basis. Taxes are paid when distributions are made from the account. Please consult with your tax advisor regarding if your contributions are tax deductible.
How do I transfer my existing IRA to Vision?
If you are transferring an existing IRA from another firm you will need to complete the IRA Transfer Request Form/Direct Rollover Letter found in Vision's Individual Retirement Account Application.
Can I roll over a previous employer's retirement plan such as 401(k) to an IRA at Vision?
Yes, in the same fashion as transferring an existing IRA. You will need to complete the IRA Transfer Request Form/Direct Rollover Letter found in Vision's Individual Retirement Account Application. The current custodian of your 401(k) may require additional paperwork and you should check with them prior to putting in your transfer request.
What's the difference between a Traditional and Roth IRA?
Contributions to a Roth IRA are not tax deductible like those to a Traditional IRA and thus come from after-tax income. However, the principal and all earnings can be withdrawn tax free after remaining in the account for five years. Additionally, unlike Traditional IRAs, participants are not required to take distributions from a Roth IRA starting at age 70 ½.
Can I convert my Traditional IRA into a Roth IRA? Are there any penalties?
You can convert a Traditional IRA into a Roth IRA without any penalties. However, deferred taxes on the Traditional IRA must be paid upon conversion. Please consult with your tax advisor regarding converting your IRA.
Can I withdraw money from my IRA?
You may take withdrawals from your IRA, but withdrawals made before the age of 59 1/2 will incur a 10% penalty and the total amount of the withdrawal may be added to your taxable income. There are several exceptions that may allow you to make a withdrawal from an IRA without penalty. Since Vision does not provide tax advice, you should speak directly with your tax advisor regarding your unique situation.
What should I do in order to withdraw the money from my IRA account?
You may do so by submitting an "IRA Distribution Request Form" to Vision's Client Services team. Please make sure that you specify the type of the distribution and complete all sections of the form, as directed in the instructions.
Does Vision act as broker and custodian for my IRA? If not, who does Vision use at the custodian?
Vision uses Equity Trust Company, d.b.a. Sterling Trust as a custodian for all IRA accounts. Vision Financial Markets and Equity Trust Company are separate and independent companies. Vision Financial Markets will act as the brokerage firm executing all securities transactions in your account. Equity Trust Company, d.b.a. Sterling Trust will act as the custodian for your Individual Retirement Account, including responsibility for any required reporting to the Internal Revenue Service.
Whom should I make the checks payable for my IRA accounts?
Please make all IRA checks payable to "Equity Trust Company, d.b.a. Sterling Trust". In the memo line, please include the year and the type of the contribution as well as Vision's account number (if known). Do not send the checks directly to Equity Trust Company; all checks must be sent to Vision's Stamford office (located at Four High Ridge Park, Stamford, CT 06905).
Can I change the beneficiaries on my existing IRA account?
Yes. You can do so by submitting the "Sterling Trust IRA Change Beneficiary Form" to Vision's Client Services team. Please make sure that you specify whether the beneficiary is primary or contingent, his/her relationship, social security number, date of birth and the share percentage.
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