Frequently Asked Questions
Do you have questions about the GROUPIRA Program
or how we work with our Members and their Investment
Advisers? Below are some of the most common questions
we get. If you do not see answers to your questions, we
invite you to call our office and speak with one of our IRA
Consultants.
General
How does an IRA work?
An IRA offers you a tax-advantaged way to set aside money for retirement. It’s a personal savings plan in the form of a custodial account set up for the exclusive benefit of you or your beneficiaries. An IRA is not an investment in itself; rather, it’s a type of account that holds the investments you select.
What’s a traditional IRA?
A traditional IRA allows your investment to grow tax-deferred, meaning you pay no taxes on earnings until they’re withdrawn. Typically, you can’t withdraw from a traditional IRA without paying income tax plus a 10% federal penalty tax until you reach age 59½. You must begin withdrawing money by the year after you turn 70½.
Anyone with earned income can contribute to a traditional IRA. For some people, contributions to a traditional IRA are tax-deductible—meaning a contribution will reduce their income tax bill. For instance, someone who doesn’t participate in a qualified employer retirement plan can deduct his or her entire contribution to a traditional IRA. Plan participants can deduct contributions only if their modified adjusted gross income doesn’t exceed certain limits, depending on their filing status.
In addition, most married couples filing a joint return—even those in which one spouse has little or no compensation—can make IRA contributions.
What’s a Roth IRA?
A Roth IRA offers tax-free investing: You pay no taxes on withdrawals made after you reach age 59½ if you’ve owned a Roth IRA for the 5-year minimum holding period. Although contributions to Roth IRAs aren’t tax-deductible, you’re never required to make withdrawals, so your assets can grow tax-free throughout your life. (The beneficiary of a Roth IRA may be required to take withdrawals.) You must not exceed certain income limits to qualify for a Roth IRA.
Which IRA is best for me—Traditional or Roth?
The answer depends on your financial situation now and what you expect it to be in the future. For example, if you’re a participant in an employer-sponsored retirement plan and you have a relatively high income (up to certain limits), a Roth IRA may be the appropriate choice because a contribution to a traditional IRA wouldn’t be deductible on your tax return. If you exceed the income limits for a Roth IRA, the only choice you’ll have is to make after-tax contributions to a traditional IRA—which still allows your investments to grow tax-deferred.
When deciding on a type of IRA, it also helps to think about how your tax situation might change following retirement. If you expect to be in a lower income tax bracket when you retire, a traditional IRA may be more suitable. Why? Because contributions may be tax-deductible now (depending on your income), and you’ll probably pay taxes at a lower rate when you make withdrawals.
How Much Does It Cost?
We operate under a fee-for-service engagement model. Fees are paid monthly from Members’ IRAs and consist of four components:
1. Membership Fee – $60 Annually (waived for active contributes)
2. Program and Technology Fee –.32% Annually
3. Investment Management and Advisory - .18% Annually
4.. Activity Fee – a fixed dollar amount for certain transactions, charged on a per incident basis (ex. check writing fees, wire transfer fees, etc.).
We do not retain any revenue by way of commission payments, including any payments originating from investment companies,Such payments, if any, are rebated to Member IRAs.
Can I Cancel At Any Time?
Yes, you can cancel at any time. To cancel, simply call our office and one of our IRA Consultants will help you to transfer or disburse your account.
Contributions
How much can I contribute to an IRA?
The annual contribution limit for 2017 and 2018 is $5,500, or $6,500 if you’re age 50 or older. Your Roth IRA contributions may also be limited based on your filing status and income.
Is my IRA contribution deductible on my tax return?
If neither you nor your spouse is covered by a retirement plan at work, your deduction is allowed in full.
For contributions to a traditional IRA, the amount you can deduct may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels.
Roth IRA contributions aren’t deductible.
Can I contribute to a traditional or Roth IRA if I’m covered by a retirement plan at work?
Yes, you can contribute to a traditional and/or Roth IRA even if you participate in an employer-sponsored retirement plan (including a SEP or SIMPLE IRA plan). If you or your spouse is covered by an employer-sponsored retirement plan and your income exceeds certain levels, you may not be able to deduct your entire contribution. See the discussion of IRA deduction limits.
I want to set up an IRA for my spouse. How much can I contribute?
If you file a joint return and have taxable compensation, you and your spouse can both contribute to your own separate IRAs.
Your total contributions to both your IRA and your spouse’s IRA may not exceed your joint taxable income or the annual contribution limit on IRAs times two, whichever is less. It doesn’t matter which spouse earned the income.
Roth IRAs and IRA deductions have other income limits.
Rollover
Can I roll over my IRA into my retirement plan at work?
You can roll over your pre-tax IRA into a qualified retirement plan (for example, a 401(k) plan), assuming the retirement plan has language allowing it to accept this type of rollover. Roth IRAs can only be rolled over to another Roth IRA. You can not roll over a non-deductible IRA into a qualified retirement plan.
Can I roll over my workplace retirement plan account into an IRA?
Almost any type of plan distribution can be rolled over into an IRA except:
- Required minimum distributions,
- Loans treated as deemed distributions
- Hardship distributions,
- Distributions of excess contributions and related earnings,
- A distribution that is one of a series of substantially equal payments,
- Withdrawals electing out of automatic contribution arrangements,
- Distributions to pay for accident, health or life insurance,
- Dividends on employer securities, or
- S corporation allocations treated as deemed distributions.
What do I need to do to roll over my retirement plan assets to GROUPIRA?
A rollover takes three steps:
- Open the appropriate IRA.
- Move your money to GROUPIRA—to do this, you will need to initiate a rollover from your former employer’s plan.
- Choose your Advisor and investments in the Rollover IRA.
Will I owe taxes on my rollover?
Generally, there are no tax implications if you complete a direct rollover and the assets go directly from your employer-sponsored plan into a Rollover or Traditional IRA via a trustee-to-trustee transfer.
However, if you choose to convert some or all of your savings in your employer-sponsored retirement plan directly to a Roth IRA, the conversion would be subject to ordinary income tax. Contact your tax advisor for more information.
If you withdraw the assets from your former employer‑sponsored retirement plan, the check is made payable to you, and taxes are withheld, you may still be able to complete a 60-day rollover. Within 60 days of receiving the distribution check, you must deposit the money into a Rollover IRA to avoid current income taxes. If you received a 1099R for a participant loan, you have until the due date of your federal tax return, plus extensions, to deposit the money into the IRA to avoid taxation.
If taxes were withheld from the distribution, you would have to replace that amount if you want to roll over your entire distribution to your GROUPIRA If you hold the assets for more than 60 days, your distribution will be subject to current income taxes and a 10% early withdrawal penalty if you are under age 59½. There is an exception for participant loans. See the prior paragraph for more information.
Can I move an existing IRA from another institution to GROUPIRA?
Yes! If you have an IRA with another provider, a direct trustee-to-trustee transfer to a GROUPIRA can help you simplify your finances, take advantage of our low costs, and gain access to guidance and a wide range of investment options.
Can I roll over assets into my Traditional IRA?
Yes, you can but it's important to be aware that if you do roll pre-tax 401(k) funds into a traditional IRA, you may not be able to roll those funds back into an employer-sponsored retirement plan. Contact your tax advisor for more information.
Can I roll my money into a Roth IRA?
Most people are eligible to convert their 401(k) to a Roth IRA; however, it is important to be aware of the potential tax implications. If you have money in a designated Roth 401(k), you can roll it directly into a Roth IRA without incurring any tax penalties. However, if the 401(k)
Distributions
Can I take money from my Traditional IRA, while I am still working?
You can take distributions from your IRA at any time. There is no need to show a hardship to take a distribution as in a retirement plan. However, your distribution will be includible in your taxable income and it may be subject to a 10% additional tax if you’re under age 59 ½.
Can I withdraw money from my IRA?
Under certain conditions, you can withdraw money from your IRA without penalty. The rules vary depending on the type of IRA you have. Generally, for a Traditional IRA, distributions prior to age 59½ are subject to a 10% penalty in addition to federal and state taxes unless an exception applies. Starting at age 59½, you can begin taking money out of your IRA without penalty, but you will still be responsible for taxes that might be due.
Starting at age 70½, required minimum distributions (RMDs) begin—you can calculate how much you will be required to take using an RMD Calculator.
For a Roth IRA, you can take a penalty-free, federal tax-free distribution of contributions at any time. Provided you have met the five-year aging requirement, and one of the following conditions, you may also take a tax-free and penalty-free distribution of earnings:
- Over age 59½
- Death or disability
- First-time home purchase
What if I request a withdrawal prior to age 59½?
Distributions from Traditional IRAs prior to age 59½ are subject to a 10% penalty, in addition to applicable federal and state taxes. Under certain circumstances, you may be able to avoid the penalty on early withdrawals. Common exceptions include:
- First-time home purchase
- Qualified education expenses
- Death or disability
- Unreimbursed medical expenses
- Health insurance, if you’re unemployed
What if I request a withdrawal between age 59½ and 70½?
Starting at age 59½, you can begin taking money out of your retirement accounts without penalty. Keep in mind that you’ll have to pay any federal or state taxes that might be due.
What if I request a withdrawal at age 70½ and beyond?
Starting at age 70½, owners of Traditional IRAs must begin making withdrawals, also known as required minimum distributions (RMDs), from their accounts. These withdrawals are mandatory. If you fail to take the RMD when required, there is a 50% federal excise tax on the amount you failed to take. You should check with your tax advisor on any applicable State penalties. There is no RMD requirement for Roth IRAs during the lifetime of the original owner. Our IRA consultants can help you calculate and manage your RMD.
How much must I take out of my IRA at age 70 1/2?
If you are required to take a required minimum distributions (RMDs), the RMD must be taken each year beginning with the year you turn age 70 1/2. The RMD for each year is calculated by dividing the IRA account balance as of December 31 of the prior year by the applicable distribution period or life expectancy. This rule does not apply to your Roth IRAs. You can determine your distribution period or life expectancy by using the Tables in Appendix B of Publication 590-B Distributions from Individual Retirement Arrangements (IRAs)
What are the withdrawal rules for Roth IRA’s
There is no required minimum distribution (RMD) requirement for Roth IRAs during the lifetime of the original owner. This means you can leave the money in the Roth IRA to continue to accumulate tax-free earnings as long as you meet the 5 year rule for qualified distributions.
Can I transfer my IRA from another institution?
Yes, you can request a transfer of your IRA online or by completing the withdrawal request form or requesting it online.
Can I take a loan from my IRA?
No. Loans are not permitted
Have you heard enough? Are you ready to get started?
Contact
Member Services is here to help with questions and assist you with account origination.
Our normal business hours are Monday - Friday, 8:00 a.m. - 5:00 p.m. Pacific Time. We observe most major U.S. Holidays.
Our Office Location
6402 19th Street West.
Tacoma, WA 98466
6402 19th Street West.
Tacoma, WA 98466
Contact Information
Phone: +1 (866) 698-4494
Email: members@groupira.com
Fax: +1 (253) 566-9440
Phone: +1 (866) 698-4494
Email: members@groupira.com
Fax: +1 (253) 566-9440
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