|
You can have more than one IRA, even two accounts of the same type. But if possible, keep the number of accounts to a minimum to keep a lid on fees and to keep your finances manageable.
You can transfer or roll over one IRA into another IRA, but you have to abide by strict rules to avoid taxes and penalties.
When you open an IRA you’ll be asked to designate primary and secondary beneficiaries who will receive your account funds if you die before you’ve withdrawn all your money. This is an important decision and IRA distribution rules are complex.
So if you have significant assets or special concerns, consider consulting a tax advisor or estate planning professional to help ensure that your IRA is distributed according to your wishes and in the most tax-advantaged way allowed.
IRAs don’t allow loans, so you cannot borrow from your account. Likewise, you can’t pledge your IRA assets as security for a loan. You can, however, make early, penalty-free withdrawals from an IRA in specified circumstances.
Technically, an IRA is a tax-advantaged personal savings account set up as a trust or custodial account that you put your investments into. You can establish an IRA at a credit union or other financial institution, or with a brokerage firm, mutual fund company, or insurance company.
You can invest your IRA money in most types of savings and investments, including CDs/share certificates, share savings, mutual funds, and individual stocks and bonds. You cannot invest in life insurance and collectibles, which include artwork, stamps, antiques, and some types of coins.
While not prohibited, municipal bonds aren’t appropriate IRA investments. That’s because a municipal bond’s built-in tax advantages can’t be realized in an already tax-favored IRA.
When deciding how to invest your IRA money, remember to consider all your retirement accounts as a whole before making any decisions.
For example, if you have an IRA, employer-sponsored retirement plan, and a taxable account, consider them all as part of one retirement portfolio when setting your asset allocation to make sure your investments are adequately diversified. And if you’re part of a couple or you’re married, also consider your spouse or partner’s retirement accounts.
Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.
|
|
|
©1997-2009 CUNA Mutual Group.
|
|
