Rollover IRA
Your retirement plan assets may be one of the single
largest sums of money you’ll ever accumulate,
which makes managing these investments one of the most
important decisions of your working life. When you change
jobs, a First South Bank Rollover1
Individual Retirement Account (IRA) may be the best
solution for your retirement plan distribution. It helps
protect your assets from taxes and penalties may ensure
that savings continue tax-advantaged growth, and frequently
offers the widest range of investment choices, so you
have the flexibility to create an IRA that suits you.
This site is provided for your information and does
not constitute tax advice. Please consult with your
accountant or tax advisor for specific guidance. Withdrawals
from an IRA made prior to age 59½ may be subject
to a 10% IRS penalty in addition to ordinary income
taxes.
Additional Rollover IRA Benefits:
- Convenient access to your money when you decide
to take distributions at retirement.
- Choose from variety of investments to make
the most of your contributions, including stocks,
bonds, mutual funds, and other investments through
UVEST,
as well as bank products such as FDIC-insured
CDs and money market accounts.
- Receive professional guidance from a UVEST
Investment Consultant.
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Taking Distributions from an
IRA before Age 59½
It may become necessary to take an
early IRA distribution, before the IRA owner reaches
age 59½. Distributions before this age may be
subject to a 10% penalty unless the funds are withdrawn
for reasons allowed under the Internal Revenue Code.
Substantially equal payments from the IRA over the account-holder's
life expectancy, without modification for at least five
years or until age 59½, whichever comes later,
this is an important exception.
Under IRS Code 72(t) there are three conditions that
must be met in order to elect this payment option. Consult
your tax advisor before taking any action:
- The withdrawals must consist of substantially
equal periodic payments.2
- These payments must be based on the life
expectancy of the accountholder, or on the joint
life expectancy of the accountholder and his
or her beneficiary.
- The accountholder must continue to receive
these payments for at least five years or until
he or she reaches age 59½, whichever
is longer.
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Want to determine how much money you will need to retire.
Use one of our calculators.
For more information on Personal Finance
Options, click
here to send us your questions, or contact us at
1-800-946-4178.
1 Rollover IRA
refers to a Traditional IRA in which qualified retirement
plan funds are contributed.
2 There
are three accepted methods of calculating the substantially
equal periodic payments: The amortization method, the
annuity factor method, and the Required Minimum Distribution
method. These methods enable an investor to withdraw
from the IRA, while avoiding the 10% tax penalty; however
these withdrawals are subject to ordinary income tax.
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