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Frequently Asked Questions

I understand that if I am 50 years old or older I am able to make a catch-up contribution, but how exactly does that work? Is that in addition to the maximum annual contribution?

It is in addition to the annual contribution limit. For example, an IRA owner that is 51 years old may be able to contribute the full $5,500 to a Roth IRA or traditional IRA as well as the $1,000 catch-up contribution for a total of $6,500.

When can I take funds out of my IRA?

Distributions from a traditional IRA can be made penalty-free at 59½, and minimum required distributions begin the year you turn 70½. You can also take withdrawals from a Roth IRA once you are 59½, as long as the account has been in existence for at least five years. Unlike traditional IRAs, there are no required distributions. Also, you can withdraw your contributions (but not any earnings) form a Roth IRA at any time for any reason without penalty.

When do I have to take the first distribution from my traditional IRA?

Required minimum distributions must begin in the year you reach age 70½. You have until April 1 of the next year to take the first distribution, but you will need to withdraw another amount by December 31. Each distribution thereafter must be taken by the end of the year.

When should I apply for Social Security benefits?

The time to apply is in the year before you plan to retire. One reason to plan ahead is that you may be able to adjust your start date and increase the overall amount of your benefits. For more information and to apply online, visit www.ssa.gov.

What happens to my 401(k) when I leave my job?

You have a number of options available to you when you leave an employer, including leaving the assets where they are, rolling them over to an IRA, moving them to your new employer, or taking a lump-sum distribution. Each of these options have their own pros and cons. Before you make a decision, research each option to determine which one is right for you.

Can I convert my existing traditional IRA to a Roth IRA?

Yes, you can make a conversion. And starting in 2010, the $100,000 eligibility income cap that previously applied to individuals who converted a Traditional IRA to a Roth IRA has been lifted and investors will be free to implement a conversion regardless of income level. Married individuals filing separately are also now able to convert.

Should I move all of my stock investments into bonds when I retire?

Not necessarily. With life expectancies reaching into the 80s, it's quite common for a person to live 20 or 30 years beyond retirement. As a result, it's still important to own some stocks for growth and to stay ahead of inflation, while at the same time holding bonds to help preserve your portfolio. But you do need to consider your own risk tolerance when making that decision.

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Next Steps

Call one of our Specialists at 1-800-359-3379.
  • Clarify your minimum distribution requirements.
  • Arrange a consolidated view of your portfolio for easier management.
  • Discuss any concerns regarding Social Security, estate planning, taxes, healthcare and more.

Specialists are available Monday through Friday, 7 a.m. to 7 p.m. CT.

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