Investor Account Options

Individuals can contribute up to the annual limit to Traditional IRAs each year. These contributions may be tax-deductible. Any earnings on assets in a Traditional IRA generally grow tax-deferred. Taxes are paid when the investor takes distributions from the account. Distributions are penalty-free after age 59½ and must begin by age 72.

Traditional IRAs may be attractive to individuals who expect to be in a lower tax bracket during retirement, or those who prefer to defer taxes into retirement.

Investors who meet specific income criteria can contribute up to the annual limit to Roth IRAs each year. Any earnings on assets in a Roth IRA generally grow tax-free. Qualified account distributions also are tax-free, as long as certain requirements are met. Distributions are penalty-free after age 59½. There is no minimum distribution requirement at age 72.

Roth IRAs may be attractive to investors who expect to be in a higher tax bracket during retirement, or those who prefer to preserve assets for later retirement years or future generations.

An employer, or self-employed individual, can establish a Simplified Employee Pension (SEP) plan and make contributions to SEP IRAs for each employee. These are similar to Traditional IRAs. However, SEP IRAs are funded 100% by the employer; employees do not contribute. The employer must contribute equally to each eligible employee in years contributions are made.

SEP IRAs may be attractive to self-employed individuals who want to save more for retirement than is allowed in Traditional and Roth IRAs or small businesses that want to offer retirement plans without incurring significant administrative costs.

Employers with fewer than 100 employees (including self-employed, sole proprietorships and partnerships) and no other current retirement plan can establish an individual retirement account for each participating employee. SIMPLE IRAs have requirements similar to Traditional IRAs but participants enjoy higher individual contribution limits and the employer is required to make contributions to the plan.

SIMPLE IRAs may be attractive for self-employed professionals or small businesses who want to encourage employees to save for retirement without incurring significant administrative costs associated with 401(k)’s or other types of qualified retirement plans.

INDIVIDUAL SOLO 401(k) or PROFIT SHARING PLANS

• Solo 401(k) - A qualified plan offering sole proprietors the opportunity to make deductions and contributions towards retirement. An alternative to an IRA, with potential for larger retirement contributions.
• Profit Sharing Plan - A tax-exempt trust that can be set up by a company or self-employed individual for the purpose of retirement.

CUSTODIAL ACCOUNTS FOR PLAN PARTICIPANTS
An account can be opened by a Trustee in the name of the Plan FBO Plan Participant to hold Plan assets. Participant Level Reporting, Deposits and Disbursements are Trustee-directed, Investments are Participant-directed or by their appointed Advisor, and Trustee is responsible for all distribution processing and tax reporting.

EMPLOYEE BENEFIT PLANS
A custody account can be opened by the Plan Trustee in the name of the Plan to hold Plan assets. Plan Level Reporting, Deposits and Disbursements are Trustee-directed, Investments are Trustee directed or by their appointed Advisor, and Trustee is responsible for all distribution processing and tax reporting.

INDIVIDUAL CUSTODY ACCOUNT
An account owned by an individual adult for the purpose of holding assets such as cash or investments.

JOINT  WROS ( WITH RIGHTS OF SURVIVORSHIP)
A custody account with two or more adult owners where each account owner holds equal shares of ownership and has an undivided interest in the assets. The surviving account owner(s) retain(s) the rights to the entire account upon the death of any other account owner.

ORGANIZATIONS (LLC, PARTNERSHIP, CORPORATION)

• LLC - Offers some of the most popular benefits of partnership and corporate accounts. Offers the pass-through tax status of a partnership, and the limited personal liability of a corporation.
• Partnership - An account established by an association of two or more persons who have an established partnership agreement to carry on, as co-owners, a business for profit. Taxes flow through to the individual partners and reported on each partner’s personal income tax return.
• Corporate - An account established by a legal entity, authorized by a state, ordinarily consisting of an association of numerous individuals.

PERSONAL TRUST
A custody account owned by a personal trust to hold assets belonging to the trust. The trustee(s) of the trust has authority over the account.

TENANTS IN COMMON
A custody account having two or more adult owners where each account owner has full use and rights to the entire account while living. Each account owner can name his/her own beneficiaries. Interest does not pass to the other tenants automatically upon the death of any other tenant. 

UNIFORM GIFT/TRANSFER TO MINORS ACT
A custody account with one minor owner controlled by a custodian until the minor reaches age of majority. Assets in the account are an irrevocable gift to the minor.