|
|
Section contents:
Funds distributed from a tax-deferred retirement plan can easily rollover into a Northrop Grumman FCU Term IRA, Accumulation IRA, or Money Market IRA. |
 Summary |
|
Your savings insured to
at least $250,000 by the
National Credit Union Administration, a U.S. Government Agency. |
Your retirement funds, rolled into a Northrop Grumman FCU IRA, offer a variety of benefits:
- Accumulate tax-deferred retirement funds
- Avoid immediate taxation and possible penalties
- IRA funds are insured separately by the
NCUA up to $250,000
|
| Minimum Requirements |
|
The following minimum requirements apply to an IRA rollover:
- $5 minimum deposit to establish an Accumulation IRA
- $2,000 minimum deposit to establish a Term IRA
- $2,500 minimum deposit to establish a Money Market IRA
|
| Frequently Asked Questions |
|
Be sure to speak with a qualified tax advisor to verify the consequences of transactions involving your IRA.
Q: What are the benefits of an IRA rollover?
A: An IRA rollover is designed to help you manage your retirement funds by allowing the movement of assets from one tax-deferred retirement plan into another. For example, if you receive a distribution from your employer's retirement plan and roll it over into an IRA, you benefit in two very significant ways:
- You can avoid immediate taxation and possible penalties
- Earnings on your retirement dollars grow tax deferred until withdrawn
Q: What distributions can I rollover into an IRA?
A: Funds received from an IRA and certain distributions from a qualified retirement plan or a tax-sheltered annuity can be rolled over into an IRA.
Q: Must I rollover the entire distribution?
A: No. You can rollover all or part of the taxable portion received. Funds eligible, but not rolled over, are taxed as ordinary income and a 10% premature distribution penalty may be assessed if you are under 59-1/2.
Q: What is the difference between a rollover and a transfer?
A: A rollover takes place when the IRA funds are paid directly to you and redeposited into an IRA within 60 calendar days of receipt. The 60-day period begins after you receive the payment.
A rollover distribution from an IRA may not occur more than once during a 12-month period. This 12-month rule applies to each separate IRA you own and is determined from the date the IRA funds are received. The 12-month limitation does not apply if the funds are transferred directly from one institution into another or if they are rolled over into an IRA from a Qualified Retirement Plan or a Tax Sheltered Annuity.
A transfer occurs when the funds are moved directly from one financial institution into another, without your having direct control or custody of the funds. There are no time or frequency limits on the number of transfers permitted.
Q: Can I redeposit a rollover distribution into the same IRA?
A: Yes. The rollover can occur out of and into the same IRA.
Q: Can I deposit my rollover distribution into more than one IRA?
A: Yes. More than one IRA can be used to successfully accomplish a rollover of an eligible distribution.
Q: Can I revoke my rollover contribution to an IRA?
A: No. The rollover deposit is irrevocable.
Q: Do I pay taxes on the earnings of my IRA rollover?
A: All earnings on your IRA rollover contributions remain tax deferred until you make withdrawals from the account, unless they are converted to a Roth IRA.
Q: Can a rollover occur after age 70-1/2?
A: Yes. There is no age restriction on a rollover or transfer deposit. However, mandatory distributions from a Traditional IRA must begin for that taxable year. Distributions from a Traditional IRA may be reinvested in a Roth IRA, no matter what your age.
Q: What happens to my rollover account in the event of my death?
A: Your named beneficiary(ies) receive the entire proceeds of the account. The manner in which the account is paid can be left to the election of the beneficiary.
Q: Does a rollover or transfer deposit affect my regular or spousal IRA?
A: No. rollover or transfer deposits do not affect your eligibility to fund a regular or spousal IRA.
Q: How do I open an IRA?
A: Simply talk to one of our Member Service Representatives. We will explain the nature of these accounts in more detail and help you complete the simple forms necessary to establish your IRA.
Q: Can I rollover directly from my 401(k) into a Roth IRA?
A: No. But the funds can be rolled into a Traditional IRA and then converted to a Roth IRA. It's just a matter of completing a few additional forms. |