FUNDING OPTIONS Self-Directed IRA Investor's Guide to Contributions, Transfers and Rollovers
W elcome to the world of self-directed IRAs! Guess what? These powerful investment tools are just like regular IRAs in so many ways (except for investing). Just as with a typical IRA, a self-directed IRA can be funded in three ways: 1 Contributions 2 Transfers (IRA to IRA) 3 Rollovers from previous employer plans CONTRIBUTIONS Always check with your tax adviser before making a contribution. Whether you have a typical or self-directed IRA, the contribution limits are the same: Traditional IRAs - 2013-2016: $5,500 (If 50-plus, $6,500) Roth IRAs - 2013-2016: $5,500 (If 50-plus, $6,500). You can contribute to a Roth IRA if your income falls below the Roth limits. You're allowed a prorated contribution if your income falls within
the "phase-out" range. If your income exceeds the income range, you won't qualify for a Roth IRA contribution. SEP IRAs - 2016: $53,000 (or 25 percent of your income, whichever is less) SIMPLE IRAs - 2015-2016: $12,500 (If 50-plus, $15,500) TRANSFERS An IRA-to-IRA transfer is another way to fund a self-directed IRA. You start this pro- cess by filling out a Transfer Request Form. • Make sure you provide the address of your current custodian's transfer department on the transfer form. This will ensure that your transfer form is sent to the department that is designed to facilitate your request. • Some, but not all, custodians require a Medallion Signature Guarantee. This "medallion stamp" can usually be obtained at your bank. Ask your
current custodian if it requires this type of signature guarantee. • It's best to contact your present custodian to request your fund be liquidated to cash. In this way, delays can be avoided. Oftentimes custodians will not accept an attached written request to liquidate funds and instead require the customer or client to request this directly. The latest news on transfers is that on Dec. 18, 2015, the Conservation Appropri- ations Act of 2016 was signed into law. As part of that law, you can now roll over from a qualified plan or traditional IRA to a SIM- PLE IRA as long as the SIMPLE has met the two-year requirement. Previously, you could not roll over an employer plan or traditional IRA into a SIMPLE. ROLLOVERS You can fund a self-directed IRA by “roll- ing over” a previous employer plan. Usually, the company you are working for will not
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