Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. Past performance does not guarantee future results. Asset allocation, rebalancing and diversification do not guarantee against risk in broadly declining markets. There is always the potential of losing money when you invest in securities. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp. Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S” or “Merrill”) makes available certain investment products sponsored, managed, distributed, or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp.”). Additional information is available in our Traditional IRA or Roth IRA Fact Sheet and Client Relationship Summary. For more information about these services and their differences, speak with your Merrill Lynch financial advisor. It is important to understand the differences, particularly when determining which service or services to select. There are important differences between brokerage and investment advisory services, including the type of advice and assistance provided, the fees charged, and the rights and obligations of the parties. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. This material does not take into account a client’s particular investment objectives, financial situations or needs and is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Although RMDs are not required for the original account owner, RMDs would apply to the inherited IRA account. If you receive a non-qualified distribution from your Roth IRA, the earnings portion of such distribution generally will be subject to ordinary income tax, plus a 10% early withdrawal additional tax if received before age 59½ unless an exception applies. A 10% early withdrawal additional tax may also be owed on converted Roth IRA principal withdrawn before the end of the five-year period. In situations where the original account owner is deceased, distributions to the beneficiary are also considered a qualified distribution. A qualified distribution from your Roth IRA may be made after a five-year period has been satisfied (this period begins January 1 of the tax year of the first contribution or the year of conversion to any Roth IRA) and you (i) are age 59½ or older, (ii) are disabled, or (iii) qualify for a special purpose distribution such as the purchase of a first home (lifetime limit of $10,000). These are complex choices and should be considered with care.ġ Your contributions may be tax-deductible, depending on your tax-return filing status, your modified adjusted gross income and whether you or your spouse are eligible to participate in employer-sponsored retirement plans.Ģ To be eligible to contribute to a Roth IRA, your Modified Adjusted Gross Income must be below specified limits.ģ Generally, for a distribution from a Roth IRA to be federal (and possibly state) income tax-free, it must be qualified. Each choice may offer different investments and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. Depending on your financial circumstances, needs, and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over a 401(k) from a prior employer to a 401(k) at your new employer, take a distribution, or leave the account where it is. You have choices about what to do with your 401(k) or other type of plan-sponsored accounts.
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