IRA FAQs
Answers to your Frequently Asked Questions
Individual Retirement Accounts
Beneficiaries
Contributions
Distributions
Fees
IRS Reporting
Transfers & Rollovers
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What is an IRA?
An Individual Retirement Account (IRA) is an investment tool created by the U.S. government to supplement retirement income. Learn more about IRAs.
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What types of IRAs are available?
Traditional IRA, Rollover IRA, Roth IRA, Simplified Employee Pension (SEP) IRA and Savings Incentive Match Plan for Employees (SIMPLE) IRA are all available. Learn more about IRAs or compare IRAs.
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Is there an age requirement to open an IRA?
The following table lists the age of majority in each state or U.S. territory in order for an individual to be a legal account owner.
| Alabama |
19 |
| Alaska |
18 |
| Arizona |
18 |
| Arkansas |
18 |
| California |
18 |
| Colorado |
18 |
| Connecticut |
18 |
| Delaware |
18 |
| District of Columbia |
18 |
| Florida |
18 |
| Georgia |
18 |
| Hawaii |
18 |
| Idaho |
18 |
| Illinois |
18 |
| Indiana |
18 |
| Iowa |
18 |
| Kansas |
18/16 if married |
| Kentucky |
18 |
| Louisiana |
18 |
| Maine |
18 |
| Maryland |
18 |
| Massachusetts |
18 |
| Michigan |
18 |
| Minnesota |
18 |
| Mississippi |
18 |
| Missouri |
18 |
| Montana |
18 |
| Nebraska |
19 |
| Nevada |
18 |
| New Hampshire |
18 |
| New Jersey |
18 |
| New Mexico |
18 |
| New York |
18 |
| North Carolina |
18 |
| North Dakota |
18 |
| Ohio |
18 |
| Oklahoma |
18 |
| Oregon |
18 |
| Pennsylvania |
18 |
| Puerto Rico |
21 |
| Rhode Island |
18 |
| South Carolina |
18 |
| South Dakota |
18 |
| Tennessee |
18 |
| Texas |
18 |
| Utah |
18 |
| Vermont |
18 |
| Virgin Islands |
18 |
| Virginia |
18 |
| Washington |
18 |
| West Virginia |
18 |
| Wisconsin |
18 |
| Wyoming |
18 |
| Non-Resident Aliens |
19 |
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Beneficiaries
Can I change the beneficiary on my IRA?
Yes, to change the beneficiary(ies), complete an IRA Change of Beneficiary form.
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Contributions
How much can I contribute?
Contribution limits vary. Please read about IRA Contributions.
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Distributions
How much can I withdraw?
Distribution rules vary. Please see IRA Distributions.
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Can I take an early distribution?
Calculate the risks and benefits with our Early Payout Planner. Consult your tax professional for more information on early withdrawal penalties.
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Fees
What are the fees?
There are no set up or maintenance fees for an IRA. Commissions and service fees still apply. Please see Rates & Fees for information on account fees.
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IRS reporting
How are my IRA transactions reported?
All funds coming into an IRA are reported to the IRS and also mailed to our clients on Form 5498. Form 5498 covers the period between January 1 and April 15 of the following year, for example January 1, 2010 to April 15, 2011. These forms are mailed by May 31 for the preceding tax year.
If you remove funds from your account during the calendar year, you will receive a 1099-R form showing the amounts reported to the IRS. These forms are mailed by January 31 for the preceding calendar year.
Direct Transfers are not reported to the IRS and will not show on either of these forms.
If you have any additional questions on how your IRA transactions are reported, please consult your tax advisor or visit the IRS Web site at www.irs.ustreas.gov.
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How will my conversion be reported?
The value of your conversion to a Roth IRA will be reported on Form 1099-R from your Traditional IRA. It will also be reported as a conversion amount on Form 5498 from your Roth IRA. For more information on these forms, consult your tax advisor or visit the IRS Web site at www.irs.ustreas.gov.
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Transfers & Rollovers
Can I move money from my Traditional IRA to my Roth IRA?
Yes. This is a Roth IRA Conversion.
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Can I change my Roth IRA to a Traditional IRA?
Changing all or a portion of an IRA contribution from one type of IRA to another is called a "recharacterization." You may recharacterize a contribution, a conversion or both. In each instance, a completed IRA Recharacterization Form is required. In addition, both types of IRAs involved must be established at TD AMERITRADE to facilitate the movement.
What is considered a Qualified Retirement Plan?
The following are designated as qualified retirement plans and may be transferred to certain types of IRAs: Money Purchase, Pension, Profit Sharing, Keogh, Defined Benefit and Defined Contribution.
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Can I open a Pension Plan/Keogh?
While TD AMERITRADE does not handle the administrative aspects of employer-sponsored retirement plans, we are able to hold the assets in a tax-exempt trust account. In this case, the funds/assets would be held in the account here, and the trustee(s) of the account (usually the benefits administrator(s) of the sponsoring company) would be responsible for reporting the account activity to the IRS. For more information on trust accounts, please contact a New Client Consultant at 800-454-9272.
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