An IRA, or Individual Retirement Account, is a tax-advantaged retirement savings vehicle. Holders of an IRA retirement account may contribute a set amount of money to it each year — the maximum yearly contribution in recent years has been the lesser of 100% of earned income or $6000 for individuals under the age of 50. For individuals over the age of 50, the maximum contribution to an IRA is the lesser of 100% of earned income or $7000. These amounts may change so make sure to reconfirm this information with your tax advisor.
What Types of IRA Accounts Exist
Many types of IRAs exist, and the type that best suits an individual is dependent on that individual’s age and how much money is needed to retire.
Traditional IRA – contributions to a Traditional IRA are often tax-deductible, meaning that the money that is contributed is done so before tax is deducted. Earnings and transactions on assets held within a Traditional IRA are not taxed, and the money that is withdrawn from a Traditional IRA at retirement is taxed as income.
Roth IRA – contributions to a Roth IRA are done so after tax has been deducted, which is the principal difference between a Roth IRA and a Traditional IRA. Earnings and transaction on assets within a Roth IRA are not taxed. Money that is withdrawn from a Roth IRA at retirement is not taxed (since it was taxed when it was contributed).
Self-Directed IRA – the owners of these IRAs are permitted to make investments on behalf of the plan. A Self-Directed IRA allows the holder to make investments, using money in the IRA account, in a broad selection of investment vehicles, whereas most other IRA types are restricted to a few mainstream investments.
We offer all types of IRA accounts.
Can I rollover my employer sponsored plan (example: 401k, 403b, TSA, etc.) to my IRA account?
Yes – just use our Rollover IRA Checklist. We recommend that you speak with a qualified tax advisor regarding any tax implications and your new contribution limits.
How do I fund my Individual Retirement Account (IRA)?
You can fund your IRA in any of the following ways:
• Link a Bank Account (Establish ACH)
• Deposit a Check
• Deposit via Wire Transfer
• Transfer a Brokerage Account to Kensington Capital
When you deposit funds via Check or Wire, please indicate one of the following deposit reasons:
Contribution – with applicable year
Rollover – either from an employer sponsored plan or a 60-day rollover from a distribution of an identical IRA account
Fees – annual trustee fee
Can I transfer funds from my individual account at Kensington Capital to my IRA?
Yes. You can conveniently transfer money from your Individual account to your IRA account. Please note that you can only transfer cash – security transfers are not permitted.
Can I have margin and options privileges for my IRA account?
Margin is not allowed for IRA accounts, but you may request options privileges up to Level 2. Since higher options levels require margin privileges, higher options levels are not possible.
How do I change the beneficiaries on my IRA?
To update the beneficiaries on your IRA, please go to our forms library and fill out and submit the IRA beneficiary form.
When does the annual IRA fee occur and how is it assessed?
A annual maintenance fee applies to all IRA accounts. New accounts are charged the $30 annual fee at the time they are funded. Existing accounts are charged every year within 30 days of the anniversary of the account opening date. Kensington Capital will send you a reminder when the fee is due, and you will have the opportunity to either send in payment, or have us withdraw the fee directly from your account.
Are there any closing fees for an IRA?
Yes, there is a $60 fee to close an IRA.
How Much Do I Need to Save For Retirement?
This depends on your age and lifestyle demands. Retirement savings are a personal decision, and how much money you need to save for retirement is dependent on your personal preferences. Using a retirement calculator can help you determine how much money you should invest in your IRA each year to hit your financial benchmarks for retirement. Remember that saving for retirement is not limited to IRA accounts.