Account and Funding Options

IRA & Funding Choices

Determining which type of IRA to open and how to fund the account is an important decision. Explore the many options below to find the right one for you.

What types of Accounts do you Custody?

Traditional IRA

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 70½.

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.

Roth IRA

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 70½.

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.

Simplified Employee Pension (SEP) IRA

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.

SIMPLE IRA

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.

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.

Taxable Accounts

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.

 

  • Traditional IRA

    Traditional IRA

    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 70½.

    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.

  • ROTH IRA

    Roth IRA

    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 70½.

    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.

  • SEP IRA

    Simplified Employee Pension (SEP) IRA

    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.

  • SIMPLE IRA

    SIMPLE IRA

    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.

  • Retirement Plans

    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.

  • Taxable Accounts

    Taxable Accounts

    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.

     

What are my funding options?

There are four easy ways to add funds to your Millennium Trust account – IRA Transfers, IRA Indirect and Direct Rollover, and Contributions.

IRA Transfers

IRA transfers are the most common funding method for a new or existing IRA. A transfer is the tax-free movement of IRA assets directly from one IRA trustee or IRA custodian to another. In IRAs, these types of transfers are unlimited since funds are transferred from one institution to another. IRA transfers are unlimited. The transaction is not reported to the IRS.

IRA Indirect Rollovers (60-day Rollovers)

An indirect rollover begins with a distribution from a retirement plan to the IRA owner, followed by a re-contribution of all, or a portion of, the assets to another plan within 60 days. A rollover may occur between a qualified plan and an IRA. The rollover transaction must be completed within a 60-day period or the assets' eligibility to be returned to a tax-advantaged account is lost.

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The distribution may then be taxed as ordinary income in the year it was received. If the individual that received the distribution is under age 59½, a 10% early withdrawal tax penalty may also apply, subject to certain exceptions. It is important for retirement plan owners considering a rollover to take extra precautions to ensure the transaction is completed promptly, as all transactions are reported to the IRS. In some cases, rollovers are not permitted, including the following:

  • IRA owners generally may not complete more than one IRA-to-IRA rollover within a 12-month period regardless of how many IRAs they own;
  • Rollovers cannot be made from a SIMPLE IRA plan to a Traditional IRA during the first two years of a SIMPLE IRA’s plan participation;
  • After age 70½, IRA or qualified plan rollover amounts that represent a taxpayer’s required minimum distribution for that year cannot be rolled over; and,
  • Rollovers from a Roth IRA cannot be made to a Traditional IRA or qualified plan.
IRA Direct Rollover

Unlike an indirect rollover, a “direct” rollover always originates with assets in a qualified plan, Traditional IRA or SIMPLE IRA and involves movement to a Traditional IRA or another employer plan. At no time are the assets cashable or negotiable by the taxpayer.

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Also, while direct rollovers are reported to the IRS as distributions, a special code on the distribution report indicates the funds were transferred in a direct rollover to an IRA or employer plan and are, therefore, not taxable. We encourage IRA owners to consult with a tax advisor before initiating any transactions.

View Rollover Chart

IRA Contributions

IRAs are available to anyone who receives taxable compensation during the year. For IRA contribution purposes, compensation includes wages, salaries, fees, tips, bonuses, commissions, taxable alimony and separate maintenance payments.

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Married couples are each eligible to have an IRA, even if one spouse is not working. One spouse’s annual contribution is limited to the lesser of total taxable compensation or to the yearly amount shown in the following tables. Participants age 50 or older may make an additional “catch-up” IRA contribution in the amounts indicated in the tables below. There are no minimum or required IRA contribution amounts, and earnings on the amounts in a Traditional IRA are generally not taxed until withdrawn. In the case of Roth IRAs, withdrawals may generally be made on a tax-free basis provided certain conditions are met.

Individual Retirement Accounts
  Individual Contribution Individual Catch-up Contribution 1
  2016 & 2017 2016 & 2017
Traditional IRA Up to $5,500 Up to $1,000
Roth IRA Up to $5,500 Up to $1,000

 

Employer Sponsored Retirement Accounts3, 4
  Participant Contribution Limit Participant Catch-up Contribution1, 2 Total maximum allocation to participant's account (employer & participant contributions5)
  2016 & 2017 2016 & 2017 2016 2017
SEP IRA N/A N/A 25% of participant's compensation or $53,000, whichever is less 25% of participant's compensation or $54,000, whichever is less
SIMPLE IRA $12,500 $3,000 $25,000 ($12,500 participant + $12,500 employer match; employer match limited to 3% compensation)
  1. Catch-up contributions are allowed for individuals age 50 or older
  2. Catch-up contributions cannot exceed the lesser of the catch-up contribution limit listed, or the excess of your compensation over the elective deferrals that are not catch-up contributions
  3. The information in this chart does not apply to self-employed individuals
  4. Additional or smaller limitations may exist in plan documents
  5. Maximums shown here may not include catch-up contributions

FIND ALTERNATIVE ASSETS WITH MAIN®

The Millennium Alternative Investment Network® provides a centralized online service that makes it easy to find and custody alternative assets.

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It’s simple and straightforward to do. You can complete the account opening, funding and investing online applications in one sitting.

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