Products (Retirement/BCS)

A Traditional IRA is a tax-deferred savings account that allows individuals to save retirement goals. The earnings are tax deferred and in most cases the contribution is tax deductible.

What are the advantages of a Traditional IRA?

The main advantages are:

• Contribution may be tax deductible - depends on whether the IRA owner or spouse is covered by an employer-sponsored qualified retirement plan and the taxpayer's Modified Adjusted Gross Income (MAGI).
• Earnings are tax deferred - Taxes are not due on earnings until distributions are taken from the IRA.
• Individuals should consult with their tax advisors about their specific tax situation.

What is considered "earned income?"

In general, "earned income" includes compensation received as wages, tips, bonuses, professional fees, and other compensation received for personal services. This is usually shown on the individual's Form W-2 issued by the employer. For self-employed individuals, compensation is the individual's net earnings from self-employment after deductions for certain self-employment taxes and retirement plan contributions.

Earned income does not include such items as interest, dividends, pension or annuity income, rental income, deferred compensation, etc.

The individual should consult their tax advisor to determine the amount of their earned income for the year.

What is the deadline for making IRA contributions?

Individuals generally have until April 15 of the year following the contribution year to establish and fund an IRA. This deadline is based on the tax return filing due date and does not include filing extensions. If April 15th falls on the weekend or legal holiday, the deadline is the next business day after April 15th.

Can an IRA owner deduct their Traditional IRA contributions?

It depends on whether they (or their spouse) are in a qualified retirement plan at work and their income. Generally, if the individual (and their spouse) are not covered by an employer sponsored qualified retirement plan at work, the IRA is fully deductible, regardless of income. If, however, the individual (or their spouse) is covered by an employer sponsored qualified retirement plan at work, the deduction could be reduced or eliminated, depending on whether their Adjusted Gross Income (AGI) is within a certain limit.

You should always consult your tax advisor for your specific tax situation.

How is Modified⁠ Adjusted Gross Income (MAGI) determined?

For purposes of the Traditional IRA deductibility, Modified Adjusted Gross Income (MAGI) means adjusted gross income (AGI) as shown on the individual's federal income tax return, modified as follows:

Add the following deductions and exclusions:

• Traditional IRA deduction;
• Student loan interest deductions;
• Tuition and fees deduction;
• Domestic production activities deduction;
• Foreign earned income exclusion;
• Foreign housing exclusion or deduction;
• Exclusion of qualified savings bond interest shown on Form 8815; and
• Exclusion of employer-paid adoption benefits shown on Form 8839

Exceptions may apply if the taxpayer receives Social Security benefits or has a passive activity loss.

You should always consult with your tax advisor for your specific tax situation.

How is the deductible amount determined when an individual's MAGI is within the phase-out range?

If your AGI is within the phaseout range, the amount that you can individually deduct is reduced.

Is the annual account fee that a client pays for a tax-deductible item on their income tax return?

The miscellaneous itemized deduction for investment fees and expenses was eliminated in 2017.

Individuals should consult with their tax advisors about their specific tax situation.

Can an IRA owner make contributions to a Traditional IRA after age 70½?

Yes. Due to the SECURE Act, beginning in tax year 2020, there is no maximum age restriction for making a Traditional IRA contribution as long as the individual, or spouse if filing jointly, has earned income. Individuals should consult with their tax advisors about their specific tax situation.

How are Traditional IRA distributions taxed?

Distributions from Traditional IRA are generally subject to ordinary income taxes. However, if the IRA owner has made any non-deductible IRA contributions to this or any other Traditional IRA, a portion of the distribution would not be taxable. IRS Form 8606 is completed to determine the taxable amount of the distribution. In addition, if the IRA owner is under the age of 59½, a 10% premature distribution penalty may apply. SIMPLE IRA distributions in the first 2 years are subject to a 25% penalty if the IRA owner is under the age of 59½.

Individuals should consult with their tax advisors about their specific tax situation.

What distributions from an IRA qualify as "Higher Education Expenses?"

The term "higher education expenses" includes expenses for higher education furnished to the taxpayer, the taxpayer's spouse, or any child or grandchild of the taxpayer or the taxpayer's spouse at an "eligible educational institution."

Qualified higher education expenses include tuition, fees, books, supplies, equipment required for the enrollment or attendance of the taxpayer, the taxpayer’s spouse, or child/grandchild of the taxpayer at an eligible educational institution. Expenses also include room and board for students who are at least half-time students.

Qualified higher education expenses are reduced by amounts provided by scholarship, educational assistance allowance, or any other payment (other than gift or bequest) which is excludable from gross income under any law of the US.

An "eligible educational institution" includes post-secondary educational institutions offering credit toward a bachelor's degree, an associate's degree, a graduate level or professional degree, or other recognized post-secondary credentials. This includes Colleges, Universities and Vocational schools. The institution must be eligible to participate in the Department of Education Student Aid Programs.

Individuals should consult with their tax advisors about their specific tax situation.

What distribution from an IRA qualifies as a "First-Time Homebuyer" distribution?

IRA Owners may receive a distribution from their IRA accounts penalty-free for a "Qualified First-Time Homebuyer" distribution if the following conditions are met:

• Distributions must be used by the individual before the close of the 120th day after the date on which the distribution is received to pay "qualified acquisition costs" with respect to the principal residence of the first-time homebuyer
• First-time homebuyer may be the IRA Owner, the IRA Owner's spouse, or any child, grandchild or ancestor of the IRA Owner or spouse.
• There is a lifetime limit claimed by any one individual for first-time Homebuyer expenses of $10,000.
• A first-time homebuyer means any individual if such individual (and, if married, such individual's spouse) had no present ownership interest in a principal residence during the 2-year period ending on the date of the acquisition of the principal residence.
• Qualified acquisition costs mean the costs of acquiring, constructing, or reconstructing a residence. This term also includes any usual or reasonable settlement, financing, or other closing costs. The date of acquisition means the date on which a binding contract to acquire the residence is entered into, or the construction or reconstruction of such residence is commenced.

Individuals should consult with their tax advisors about their specific tax situation.

What is the Special Rule For Delay In Acquisition

If a distribution from an IRA fails to meet the 120-day requirement due to delay or cancellation of the purchase or construction of the residence, the amount of the distribution may be contributed as a rollover contribution to the original IRA or to another IRA. In such a rollover contribution, 120 days shall replace the 60-day requirement. The 12-month restriction on the frequency of IRA rollovers does not apply to this type of rollover.

When must a beneficiary begin taking Required Minimum Distributions (RMDs) from a Traditional IRA?

By April 1 of the year following the year the individual attains age 73.

Yes. An IRA is generally considered part of the deceased's gross estate for federal estate tax purposes. An individual should consult with their tax or legal advisor regarding more specific information on the tax implications of the IRA for estate tax purposes.

How⁠ long does an individual have to roll over a distribution to avoid taxes?

Generally, 60 days from receipt of the distribution. This may be done once per rolling 365-day period.

Can I make my contribution in-kind (i.e., securities or property)?

No, contributions can only be made in cash.

Can a client make a transfer from their IRA to their Health Savings Account (HSA)?

Yes, the rules around Health Savings Accounts allow employees a one-time (once in a lifetime) direct rollover of funds from either their Traditional or Roth IRA into an HSA. This is an irrevocable rollover. The amount rolled is not includible in income and is not subject to the 10% additional tax penalty. The transferred amount is not deductible and cannot exceed the maximum HSA contribution limit for the year.

Individuals should consult with their tax advisors about their specific tax situation.

Is a spousal IRA a separate type of IRA?

No, there are two main types of IRAs, Traditional and Roth. Anyone can open an IRA no matter their age or employment status. However, to contribute to an IRA you must have earned income. Those with no earned income but are married and filing jointly can contribute the maximum amount for their age or 100% of earned income minus any contributions to their spouse’s IRA, whichever is less. For example, a couple, both over age 50, files a joint return and the earned income for the year was $10,000. They could each contribute $5,000 or one could contribute $7,000 and the other contribute $3,000 but both could not make the maximum IRA contribution for the year. However, if the earned income was $14,000 or greater, they could both contribute the maximum.

Individuals should consult with their tax advisors about their specific tax situation.

How do I know if I'm covered by an employer-sponsored retirement plan?

The "Retirement Plan" box in Box 13 of your W-2 tax form should be checked if you were covered for the year.

Individuals should consult with their tax advisors about their specific tax situation.

Can Traditional IRA contributions be made to a SEP IRA?

Yes, a Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings. Contributions are made to an IRA set up for each plan participant (a SEP-IRA). A SEP-IRA account is a Traditional IRA and follows the same investment, distribution, and rollover rules. SEP IRAs allow for individual contributions (subject to the same limits as Traditional IRAs) and employer contributions. Please click the following link for more information on SEP IRAs: SEP IRA FAQs.

Are there products/investments that cannot be purchased in a WFCS IRA?

There are some products/investments that are prohibited in IRAs by the Internal Revenue Code, such as collectibles and life insurance. Other investments may be prohibited by the firm due to issues such as risks and administrative/operational difficulties like real estate or physical gold. Additionally, the firm acknowledges fiduciary status under Prohibited Transaction Exemption 2020-02 and as a result, excludes certain investments to comply with the requirements of this exemption. Roth IRA

What is a Roth IRA?

A Roth IRA is a type of Individual Retirement Account that provides potentially tax-free distribution of earnings.

What are the features of a Roth IRA?

The main features are:

Tax-free distribution opportunity - Although there is no up-front deduction for the contribution, if the distribution satisfies certain conditions the earnings may be free of income taxes.

• As long as the individual or spouse (if married filing jointly) has earned income, contributions can be made at any age.
• Contributions can be made to a Roth if the individual's Modified Adjusted Gross Income is within or below that tax year's phase-out limits, regardless of plan participation.
• Traditional to Roth IRA conversions -
  • Anyone can convert to a Roth regardless of MAGI or tax filing status to take advantage of future tax-free income opportunities
  • Employer sponsored qualified retirement plan balances can be converted to Roth IRAs. Conversions of an eligible rollover distribution can be made through a direct rollover of before-tax and/or after-tax money from the plan to the Roth IRA or an amount can be distributed from the plan and rolled over to the Roth IRA within 60 days. A Roth conversion of after-tax amounts will not be income taxable. Any pre-tax amount converted will be included in the IRA holder's gross income. In any case, the amount rolled over must be an eligible rollover distribution.

What are the ordering rules for non-qualified distributions from a Roth IRA?

• Qualified distributions are any distribution made after 5 years AND age 59½, or for death, disability or first-time homebuyer exception. These distributions are tax free.
• Non-qualified Distributions (Note: for purpose of determining what is deemed as being distributed, all Roth IRAs that individual owns are aggregated)

1. Annual Roth contributions, if any, are the first amounts distributed from the Roth IRA. Distributions of contributions are tax free.
2. Second amounts distributed from a Roth IRA, after all contributions are depleted, are converted funds, if any. Roth conversion amounts distributed after a five-year holding period has elapsed on that conversion or conversion amounts distributed after age 59½ are not subject to the 10% IRS additional tax. If a distribution is taken from a conversion prior to the five years or age 59½ and none of the exceptions apply, the distribution is subject to the 10% additional tax.
3. Earnings are the last amounts distributed from a Roth IRA. Qualified distributions of earnings are tax-free (that is, after five years AND age 59½, death, disability or first-time homebuyer). If not a qualified distribution, earnings are subject to ordinary income tax, and for those under age 59 1/2 the 10% additional tax, unless an exception applies.

For purposes of the Roth IRA phase out rules, Modified Adjusted Gross Income (MAGI) means Adjusted Gross Income (AGI) as shown on the individual's federal income tax return, modified as follows:

Subtract any income resulting from a conversion to a Roth IRA (conversion income)

Add the following deductions and exclusions:

• Traditional IRA deduction;
• Student loan interest deductions;
• Tuition and fees deduction;
• Domestic production activities deduction;
• Foreign earned income exclusion;
• Foreign housing exclusion or deduction;
• Exclusion of qualified bond interest shown on Form 8815; and
• Exclusion of employer-paid adoption benefits shown on Form 8839

Exceptions may apply for individuals who receive Social Security benefits or have passive activity loss. See IRS publication 590.

Individuals should consult with their tax advisors for their specific tax situation.

How is the maximum contribution amount determined if a client's Modified Adjusted Gross Income (MAGI) is within the phase-out range?

If MAGI is within the phase-out range, the amount that can be contributed is reduced. If MAGI is above the top of the phase-out range, no Roth IRA contribution can be made.

AGI limit for Roth IRA contributions increased. For 2026, your Roth IRA contribution limit is reduced (phased out) in the following situations.

Your filing status is married filing jointly or qualifying surviving spouse and your modified AGI is at least $242,000. You can’t make a Roth IRA contribution if your modified AGI is $252,0000 or more.

Your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time in 2026 and your modified AGI is at least $153,000. You can’t make a Roth IRA contribution if your modified AGI is $168,000 or more.

Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than zero. You can’t make a Roth IRA contribution if your modified AGI is $10,000 or more.

Is there a maximum age that contributions can be made to a Roth IRA?

No, contributions can be made at any age as long as the individual (or spouse if married filing jointly) has earned income.

Is the account owner required to take distributions from a Roth IRA?

No. Distributions are not required during the IRA owner's lifetime.

What distributions from a Roth IRA qualify as Higher Education Expenses?

The term "higher education expenses" includes expenses for higher education furnished to the taxpayer, the taxpayer's spouse, or any child or grandchild of the taxpayer or the taxpayer's spouse at an "eligible educational institution".

Qualified higher education expenses include tuition, fees, books, supplies, equipment required for the enrollment or attendance at an eligible educational institution. Expenses also include room and board for students who are at least half-time students.

Qualified higher education expenses are reduced by amounts provided by scholarship, educational assistance allowance, or any other payment (other than gift or bequest) which is excludable from gross income under any law of the US.

An "eligible educational institution" includes post-secondary educational institutions offering credit toward a bachelor's degree, an associate's degree, a graduate level or professional degree, or other recognized post-secondary credential. This includes Colleges, Universities and Vocational schools. The institution must be eligible to participate in the Department of Education Student Aid Programs.

What distributions from a Roth IRA qualifies as an eligible First-Time Homebuyer distribution?

Roth IRA owners may receive a distribution from their IRA penalty-free for a Qualified First-Time Homebuyer distribution if the following conditions are met:

• First-time homebuyer may be the IRA owner, the IRA owner's spouse, or any child, grandchild or ancestor of the IRA owner or owner's spouse.
• There is a lifetime limit claimed by any one individual for first-time home buyer expenses of $10,000 for all years.
• Tuition and fees deduction;
• A first-time homebuyer means any individual if such individual (and, if married, such individual's spouse) had no present ownership interest in a principal residence during the 2-year period ending on the date of the acquisition of the principal residence.
• Distributions must be used by the individual before the close of the 120th day after the date on which the distribution is received to pay "qualified acquisition costs" with respect to the principal residence of the first-time Homebuyer
• Qualified acquisition costs mean the costs of acquiring, constructing, or reconstructing a residence. This term also includes any usual or reasonable settlement, financing, or other closing costs. The date of acquisition means the date on which a binding contract to acquire the residence is entered into, or on which the construction or reconstruction of such residence is commenced.

What is a Special Rollover Rule For Delay In Acquisition

If a distribution from an IRA fails to meet the 120-day requirement due to delay or cancellation of the purchase or construction of the residence, the amount of the distribution may be contributed as a rollover contribution to the original IRA or to another IRA. In such a rollover contribution, 120 days shall replace the 60-day requirement. The 12-month restriction on the frequency of IRA rollovers does not apply to this type of rollover.

Is a beneficiary required to take distributions from a Roth IRA after the IRA owner's death?

Inherited Roth IRAs are not subject to RMDs but are required to be fully depleted over a 10-year period.

Why would an individual contribute to a Roth IRA instead of a Traditional IRA?

There are many factors that impact the decision on which type of IRA to fund.

Generally, if the individual is not eligible for a deduction on their Traditional IRA contribution but is eligible for the Roth IRA, the Roth is a good choice.

If the client is eligible for a deduction on their Traditional IRA contribution and is eligible to make a Roth contribution, careful consideration of these and other factors should be discussed with their tax advisor:

• Current vs. future tax rates
• Investment returns
• Income and filing status
• What the money will be used for and when
• Estate planning goals

All taxpayers are eligible to convert to a Roth IRA, regardless of their modified adjusted gross income (MAGI) or tax filing status. All taxes on conversions will be due in the year converted.

Traditional, SEP, and/or SIMPLE (after 2 years from the first contribution) IRAs can be converted to Roth. Eligible rollover distributions can be converted to a Roth IRA for employer sponsored plan participants. A non-spouse beneficiary who inherits an employer sponsored qualified retirement plan (not SEP or SIMPLE IRA) is able to request a direct trustee-to-trustee transfer to an Inherited Roth IRA. A Roth conversion of after-tax amounts will not be taxable income. Any pre-tax amount converted will be included in the Roth IRA or Inherited Roth IRA holder's gross income for the year. The Pro-Rata Rule applies to a conversion from any Traditional, SEP and/or SIMPLE IRA.

What is the difference between the five-year holding period for qualified Roth IRA distributions and the 5-year holding period that applies to amounts converted to a Roth IRA?

The five-year period that is used for the purpose of determining whether an amount is a qualified distribution (i.e. income tax-free distribution of earnings) starts with the tax year for which the first contribution or conversion is made to any Roth IRA that individual owns.

This is different from the five-year period that is used for purpose of determining tax-free distributions of converted amounts. When amounts are converted to a Roth, each conversion is subject to the 10% additional tax, prior to the expiration of a five-year holding period of that conversion (beginning with the year of conversion) or age 59½ has been obtained, whichever is first unless an exception applies.

* A distribution from a particular conversion is treated as first coming from the taxable portion of the conversion. Once all taxable amounts from that conversion are distributed then any nontaxable converted amount of that conversion is distributed.

Does the 60-Day Rollover Rule apply to Roth IRAs?

Yes, as long as the amount is eligible for rollover. Roth IRA-to-Roth IRA rollovers are subject to the same one-rollover-per individual per-365 days rule that applies to Traditional IRA-to-Traditional IRA rollovers.

What is the deadline for making a Roth IRA contribution?

The deadline for establishing an IRA and making IRA contributions is the due date for the federal tax return, NO extensions. Generally, this is April 15th of the year following the tax year for which the contribution is for. However, if April 15th falls on the weekend, or legal holiday the deadline is the next business day.

I understand that after-tax contributions to an employer sponsored qualifited retirement plan can be converted to a Roth IRA. How does that work?

If an individual is permitted to take a plan distribution (meets their plan's requirement for an in-service distribution or has a triggering event such as separation of service) and has after-tax contributions in their qualified plan [such as 401(k), 403(b), etc.], there are several options for taking those funds from the plan. One option is to convert the after-tax amounts directly from the plan to a Roth IRA.

Individuals should consult with their tax advisors about their specific tax situation.

Can a Roth account in a qualified plan [e.g., Roth 401(k), etc.] roll into a Traditional IRA?

No. Rollovers from an employer's plan Roth account (i.e. Roth 401(k), etc.) can only roll into a Roth IRA or another employer sponsored Roth plan, if the plan accepts.

A rollover of a qualified distribution from a Roth plan to a Roth IRA will all be treated as Roth IRA contributions for purpose of the Roth IRA distribution ordering rules.

With a rollover of a non-qualified distribution from a Roth plan to a Roth IRA, for purpose of the Roth IRA distribution ordering rules, the

• Roth plan contributions will be treated as Roth IRA contributions
• Roth plan earnings will be treated as Roth IRA earnings

What is a qualified Roth employer plan distribution?

A qualified distribution, which is tax-free, occurs when the Roth plan account has been open for at least 5 years and the participant is at least age 59½, disabled, or the payment is made to their beneficiary.

Can money received by a survivor (spouse, parent, child, etc.) as a military death gratuity or group life insurance payment be contributed to this account?

Yes, any eligible survivor of a service member can contribute up to the sum of the payments (reduced by any part of the payments contributed to a Coverdell Education Savings Account or another Roth IRA) to a Roth IRA for one year following receipt of the payment. Call the Investment Contact Center at 1 800 872 3377 for assistance.

When must RMDs begin?

The age for taking required minimum distributions (RMDs) has increased from 72 to 73, for individuals who turn age 72 in 2023 or later. IRS regulations state that a Traditional, SEP, or SIMPLE IRA owner must begin to take distributions from their IRAs beginning the year they reach age 73. Distributions from a Roth IRA are not required during the IRA owner's lifetime.

Distributions for the year the IRA owner reaches age 73 (their first distribution year) can be taken either:

• By Dec 31st in the year the IRA owner reaches age 73, or
• by April 1 of the following year. This April 1 date is known as the "Required Beginning Date" or "RBD".

Qualified employer sponsored retirement plans and 403(b)s:

These rules are generally the same as a Traditional IRA. However, non-5% or more owners of the company, who are still working past age 73 may have the option according to the plan document to defer their distribution until April 1 following retirement. These individuals should check with their employer for more information on their RBD.

When must subsequent distributions be taken?

Distributions for the second distribution year and subsequent years must be taken by December 31 of each year.

How are RMDs calculated?

RMDs are calculated by dividing the prior year end account balance by the appropriate life expectancy factor from IRS life expectancy tables.

If your client is delaying their first RMD until April 1, you would still calculate it based on the prior year's December 31 value for the year the client turns 73. For example, your client turns 73 in 2024, their required beginning date is April 1, 2025. They are delaying their 2024 RMD and will use the 2023 year-end value for the calculation. Their 2025 RMD is due by December 31, 2025 and is based on the December 31, 2024 year-end value.

What happens if a client does not satisfy their RMD?

The IRA owner may be subject to an IRS 25% excise tax for every dollar under-distributed. This may be reduced to 10%, if you correct the shortfall during a two-year correction window.

The client may be subject to an IRS excise tax on the difference between the RMD and the amount actually taken.

Example: The IRA owner's RMD was $10,000, but they only distributed $8,000 from their Traditional IRA. The difference between the RMD and the amount taken is $2000, therefore the IRS excise tax is $500 (25% of the $2000 not taken).

The IRA owner works with their tax advisor to file IRS Form 5329 (PDF) with their Federal income tax return to pay the excise tax or request a waiver of the tax.

Can contributions be made after age 73?

• Traditional IRA - Due to the SECURE Act, beginning in tax year 2020, there is no maximum age restriction for making a Traditional IRA contribution as long as the individual, or spouse if filing jointly, has earned income.
• Roth IRA - Contributions can be made after age 73, if the IRA owner (and/or spouse) has earned income.
• SEP/SIMPLE IRA - Employer and/or Salary Deferral contributions can be made for an employee (or business owner) over age 73, if still working.

Can distributions (rollovers, transfers, Roth conversions) be made after age 73?

• Rollovers/Transfers- These types of deposits can be made after age 73, however, the RMD must generally be satisfied prior to the rollover/transfer.
• Traditional to Roth IRA Conversions - An individual may convert to a Roth IRA after age 73, but a Roth conversion does not satisfy the RMD. The RMD must be satisfied prior to the conversion.
• If the IRA owner has more than one IRA, the client can decide from which IRA(s) to distribute from to satisfy the RMD. This rule does not apply to QRPs. However, while RMDs must be calculated separately for each 403(b) a client's total RMD can be taken from any one or more of their 403(b) accounts.

• If the primary beneficiary is NOT the client's spouse -
  • If IRA owner dies prior to their Required Beginning Date (RBD), (April 1 of the year following the year the client attained age 73), no Required Minimum Distribution (RMD) is required in the year of death.
  • If the IRA client dies after their RBD, and did not take their RMD, the beneficiary is to satisfy the RMD before December 31st of the year of death on behalf of the deceased IRA owner. The RMD for that year is based on the deceased's attained age and the prior year's December 31 account balance
• If the primary beneficiary is the client's spouse -
  • If the IRA owner dies prior to the RBD, no RMD is required for the deceased owner in the year of death.
  • If the IRA owner dies after their RBD, the spouse must take the deceased's RMD for that year based on the deceased's age they would have attained and the prior year's December 31 account balance.
    • A spouse who elects to treat the IRA as their own can satisfy the deceased's spouse's RMD from their own IRA by December 31 of the year of their spouse's death.
    • A surviving spouse under the age of 59 ½, may wish to transfer the account, or perhaps only the RMD, to an Inherited IRA in order to avoid the 10% additional tax. Taking the distribution from their own IRA, for spouses under age 59 ½, may trigger the 10% additional tax.

Example - Mr. IRA Jones attains age 73 in October 2024 his required beginning distribution (RBD) is April 1, 2025. Mr. Jones dies in March of 2025. He has not lived until his RBD so he has no RMD due. His beneficiaries have no RMD to satisfy for Mr. Jones in the year of his death. If instead Mr. Jones dies in June 2025 his beneficiaries are required to satisfy his RMD by December 31, 2025.

Non-Spouse Beneficiaries - If an IRA owner over RMD age has already begun taking RMDs and dies before December 31 of a given year, the RMD for that year must be taken by the beneficiary, from their Inherited IRA, based on the IRA owner's age as of the end of that year and the previous year's account balance as of December 31 of that year. The beneficiary(s) is only responsible for their portion of the RMD based on the portion of the IRA they inherited. They will owe ordinary income tax on any taxable portion of the distribution.

Spouse Beneficiary - A spouse who elects to treat the IRA as their own IRA can satisfy the deceased spouse's RMD from their own IRA by December 31 of the year of their spouse's death. A surviving spouse under age 59½, may wish to transfer the account, or perhaps the RMD, to an Inherited IRA in order to avoid the 10% additional tax. Taking the distribution from their own IRA, for spouses under age 59½ , may trigger the 10% additional tax.

Individuals should consult with their tax advisors about their specific tax situation.

How are annuities in IRAs valued for RMD purposes?

The annuity carriers send the custodian the value of the contracts on a regular basis. The value that is represented on a client's 12/31 statement will be the most recent value, as of this date, that the carriers have sent. Therefore, the client's RMD will be based on the December monthly statement values. However, in January, the annuity carriers will determine if the "value" of the contracts has been affected by the entire interest rule. If the entire interest rule affects the value, the annuity carriers will be responsible for sending the custodian the updated value. Once that is received the system is updated to reflect the new RMD amount going forward on the monthly statements.

For example: If a contract has been affected by the entire interest rule, the RMD amount that is on the client's January statement will be different than the RMD amount on their February statement. Also, the custodian will amend the clients Fair Market Value statement that is sent to the IRS so that the IRS is also aware of the change. The client will also get a copy of any amendments.

Individuals should consult with their tax advisors for their specific tax situation.

If an investor owns more than one IRA must RMDs be calculated and distributed from each of them?

While an RMD calculation should be completed for each Traditional, SEP and/or SIMPLE IRA owned by a client, the IRS does allow the client to aggregate the required minimum distributions (RMDs) and distribute that amount from any one or combination of the IRAs.

If a client owns an IRA and an ex-employer’s plan (401(k), 403(b), etc.) must RMD’s be taken from them at RMD age?

A 403(b) contract owner must calculate the RMD separately for each 403(b) contract that he or she owns, but can take the total amount from one or more of the 403(b) contracts. However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans have to be taken separately from each of those plan accounts. The IRS does not allow an RMD from an IRA to be satisfied by a distribution from a qualified employer sponsored retirement, plan, or vice versa.

No, once a client buys an immediate annuity with IRA funds, the annuity is no longer part of the IRA held here. That immediate annuity contract is held with the carrier. All payments received under the annuity contract are considered required minimum distributions (and they are not eligible for rollover), and those distributions satisfy the RMD requirement for the annuity contract only. If their client has other IRAs, the applicable RMD’s for these accounts would need to be calculated separately from the immediate annuity payments. However, in the year that the annuity contract was purchased, the payments the client receives in that year would count toward the applicable RMD amount for that specific year.

What account balance is used to calculate the RMD?

Generally the IRA account balance is the amount of the IRA at the end of the year preceding the year for which the RMD is being figured. Certain current year activity may require adjustment to the prior year-end balance:

• Recharacterized amounts in the year subsequent to the Roth conversion (increase by amount moved in recharacterization process, which would include earnings/loss)
• Rollovers outstanding at prior year end (increase by amount of rollover receipt)
• Additionally, the prior year-end balance of an amount that transfers in this year may need to be added.

Can IRA holders with check writing privileges write a check from that IRA to a charity and count as a Qualified Charitable Distribution (QCD)?

No. QCD, checks are no longer allowed.

Please note: Electronic transfer requests initiated from an outside financial institution, for example: PayPal, Zelle, Venmo or EFT(Electronic Funds Transfers) from 3rd party sites, are not allowed from your BCS IRA and any attempt to do so will be blocked. Federal and state laws require that you make an election for tax withholding before a distribution occurs from your IRA which is not possible with these types of transactions.

What is Brokerage Cash Services (BCS)?

Brokerage Cash Services (BCS) is an optional set of features that allows you to easily move money in and out of your personal or business brokerage account.

While BCS offers some conveniences similar to a checking account—such as debit cards or check writing—it is not intended to replace your everyday checking account. Brokerage accounts are not FDIC-insured and do not include overdraft protection.

How does Brokerage Cash Services work?

BCS combines cash management features with your investment account, allowing you to manage your cash and investments in one place.

You can connect your brokerage account with other Wells Fargo banking, lending, and brokerage accounts to easily move money and view your finances together.

How can I deposit funds into my account with BCS?

You have several convenient options to deposit funds:

• Transfer money using the Wells Fargo Mobile® app or online
• Deposit checks using mobile deposit
• Set up direct deposit (such as payroll)
• Transfer funds by phone or online
• Use Wells Fargo ATMs
• Visit a Wells Fargo branch to deposit funds with a teller

How can I withdraw funds from my account with BCS?

You can access your funds in multiple ways:

• Transfer money to your eligible accounts online or through the mobile app
• Send money using Zelle®
• Pay bills using Bill Pay
• Use personal or commercial check writing capabilities
• Request no fee Debit/ATM cards
• Request domestic or international wire transfers

These options allow you to securely send money where you need it.

How does BCS work with IRAs?

IRA accounts with BCS include features designed to meet specific tax and reporting requirements.

With eligible IRA accounts, you can:

• Make current-year and prior-year contributions online
• Request IRA distributions digitally (for eligible IRA types)
• Use IRA check writing for certain distributions, Available features may vary depending on your IRA type.

What other features are available with BCS?

With BCS, you can easily manage and monitor your account through the Wells Fargo mobile app or website. You can:

• View account activity, holdings, and performance
• Access statements and tax documents
• Review your BCS Annual Summary Statement
• Set up direct deposit for recurring payments

You can also visit a Wells Fargo branch for services such as:

• Teller deposits
• Cashier’s checks
• Account updates

Additional options like check writing and debit cards are available upon request.

Margin line of credit for overdraft protection and convenient loan access are available on eligible accounts.

What types of accounts does Wells Fargo Advisors support?

The Wells Fargo Mobile® app supports opening Standard, Traditional IRA, and Roth IRA accounts. Other account types are available to be opened over the phone at 1-877-573-7997 including SEP IRAs, educational savings accounts, custodial accounts, trust accounts, business accounts and Qualified Retirement Plans.

When will I receive my new account number?

If you applied online, the last four numbers of your reserved account number are shown on the final application page. Once your account is opened, you can find your new account package and account number in the following areas:

Where can I find my full account number in the app?

Select your account from Account Summary, scroll down to Account Info, and select View next to the brokerage account number.

How do I sign and return account documents?

If the account is eligible for electronic signature, instructions are sent by email for online completion. If not eligible, the New Account Package is sent by U.S. Mail.

How do I view my new account online?

Online access is generally available within 3 business days of receiving the application. In many cases, accounts are available on the same day or early on the next business day.

You’ll then see your account in Account Summary. Select the account to review Account Details.

Why can’t I see my account online?

Select Menu-> Account Services-> Add or Remove Online Account Access. If you don’t see your account then you will need to call Online Services & Access Online Support 1-877-879-2495.

It is also possible the account has been closed.

How can I grant another person or grant third party access to my account online?

You can grant "view” access to any non-account owner. Examples of non-account third parties are: a spouse or family member, CPA, a Money Manager. By providing online view only access, the account owner has also authorized the release of account documentation to the named third party.

The Authorization to Release Account Information Online form is required to grant third party access. You will need to call your Financial Advisor or for WellsTrade, PCG Solutions, or WBS Solutions accounts call our Investment Contact Center at 1 800 872 3377.

Can I grant online access to a minor?

The minor listed on a UTMA/UGMA account cannot have online access to the account.

How can I add or remove or link/delink accounts to online access?

Select Menu-> Account Services-> Add or Remove Online Account Access.

How can I setup separate login credentials?

You can only have one userid and password to access all your accounts including accounts you are not the owner but are authorized to view. You can manage your online view by setting up account groups on the Account Summary page.

How do I know if I can trade with my brokerage account?

Select your account from the account summary page. If you see a trade and quotes tab, you can trade with your account. If you do not see that tab the account you selected does not have trading capability.

How soon can I start trading?

Typically, trading may begin after signed account documents are received and the account is funded.

What are the trading fees and commissions?

Your commission fee schedule is available on our Wells Fargo Advisors desktop website. Select Customer Service from the top navigation, select Fees & Rates, then select Fee Schedule.

If you have the “trading” feature on your accounts, you can trade stocks, mutual funds, exchange-traded funds (ETFs), options, money market mutual funds, and certain fixed-income products through the app.

How do I place a trade or how do I buy or sell stocks?

To place a trade to buy:

Select the brokerage account on account summary, Select Trades & Quotes > Select the type of Trade you want to make

To place a trade to sell:

Select the brokerage account in account summary > When viewing the positions held in the account > Tap on the security to sell > Tap "Trade"

How do I enable margin to my account?

You’ll need to complete the Margin Account Agreement.

This form is available on our Wells Fargo Advisors desktop website. You can find it in Customer Service > Forms > Move Money & Securities > Margin Account Agreement

The form will need to be printed and signed physically and returned.

How do I remove margin from my account?

Contact the phone number listed on your statement for assistance with removing margin from your account.

How do I enable options trading in my account?

You’ll need to complete the Options Account Information and Agreement. This form is available on our Wells Fargo Advisors desktop website. You can find it in Customer Service >Forms > Account Forms.

When will I see the settled funds from a stock sale?

Stocks will typically settle T+1, or one business day after the trade executes. Settlement dates are available on your trade confirmation available by visiting ‘Statements and Documents’ in the app.

Where can I check my cost basis?

Select the account in account summary. Under the portfolio tab, scroll down to Holdings. You will need to tap on the individual holdings to see all of the tax lots.

Why doesn't my cost basis display?

This could be due to a couple of reasons.

Your shares may be considered "noncovered securities." This happens because financial institutions are only required to track and report cost basis for "covered securities," which are assets acquired on or after specific dates set by the IRS. If you purchased your shares before these dates, they are classified as noncovered. For these older, noncovered assets, we only report the gross proceeds of a sale.

The position was traded intraday, and the cost basis information has not been populated yet. This will be updated overnight. If the position was transferred in, we would not have received the original cost basis information from the contra firm.

How do I liquidate a non-transferable asset?

To liquidate nontransferable assets, you'll need to authorize the liquidation and the transfer of the resulting credit balance. You can also authorize the deduction of any outstanding fees from this credit balance.

If your account doesn't have a credit balance, or if it's not enough to cover outstanding fees, you can authorize the liquidation of assets to cover those obligations.

Please note that in addition to potential liquidation fees or taxes, you may also incur account termination or transfer fees.

You may need to contact the number on your statement to temporarily lift the restriction on the account prior to placing orders to sell the non-transferrable securities.

Can I place sell-to-open put orders before the market opens?

Please contact the number on your statement to place sell-to-open orders before the market opens.

What is the difference between market and limit orders?

Market orders are used to buy or sell securities promptly at the best available price. The execution price on a market order is not guaranteed. Customers should understand that the last-traded price is not necessarily the price at which an order will be executed and that in fast-moving or illiquid markets, the price at which an order executes could be significantly away from the last-traded price or recent quotations in the security.

Limit orders are used to buy or sell securities at a specific price or better and can help protect customers from adverse price movements when entering orders to buy or sell a security. Customers are strongly encouraged to consider using limit orders during periods of high market volatility or for securities with volatile trading prices. Buy limit orders can only be executed at the limit price or lower, while sell limit orders can only be executed at the limit price or higher. Limit orders are not guaranteed to execute and can only be filled when the stock’s market price reaches the limit price.

What can I do when the CD matures?

Brokered CDs do not reinvest automatically. Upon maturity, you will be paid the principal value of the CDs plus any accrued interest.

Where can I see my tax documents?

You can find tax documents by Selecting Menu > Select Statements & Documents > Under Investing, select Statements and Documents > Select Document Type > Tax Documents/1099s Select Tax Year > Select View Results

Where can I see my statements?

You can find statements by Selecting Menu > Select Statements & Documents > Under Investing, select Statements and Documents > Select Account > Document Type and Statements > Statement Date > Select View Results

Money Movement

Can I move money between my bank and brokerage accounts?

If you have a Brokerage Cash Services (BCS) account associated with your Brokerage Account, you can move money to and from your account. Select ‘Pay and Transfer’ and then ‘Transfer’ then choose which accounts you would like to transfer money between.

If you don’t have a Brokerage Cash Service (BCS) account, you can add a BCS account to your investment account. Navigate to the Portfolio Page and select “Accounts”. Scroll down to the “Account Services” section and select Enroll in Brokerage Cash Services and then follow the instructions on the screen.

Can I move money to or from an external bank account?

Go to the Pay & Transfer menu, and select ‘Add a non-Wells Fargo Account’ from the Transfer Money screen.

External accounts must be verified before use. If instant verification isn’t available, trial deposit verification may be required.

Can I transfer an account from another brokerage firm to Wells Fargo?

Most accounts can be transferred from another brokerage firm to Wells Fargo.

• Contact your Wells Fargo Advisor with specific details if that applies.
• If you are a self-service customer, you may be eligible to request an account transfer for individual eligible accounts in the app. Select ‘Pay and Transfer’ and then ‘Transfer Assets’.

What do I need to initiate a Wire Transfer?

If you have a Brokerage Cash Services (BCS) account associated with your Brokerage Account, you can move money to and from your account. Select ‘Pay and Transfer’ and then ‘Wire Money’.

If you don’t have a Brokerage Cash Service (BCS) account, you add a BCS account to your investment account. Navigate to the Portfolio Page and select “Accounts”. Scroll down to the “Account Services” section and select Enroll in Brokerage Cash Services and then follow the instructions on the screen.

How can I deposit a check?

You can make a mobile deposit in the app by selecting ‘deposit’. Select the account and follow the prompts.

How long does a wire transfer take?

Domestic: Same day - Initiated at Contra Firm
Foreign: 2 - 7 business days, processing times vary depending on where funds are coming from - Initiated by Contra Firm

How do I contribute to my IRA?

Eligible IRA contributions can be made online through “Pay & Transfer”. In the app, go to “Pay & Transfer”, then “Transfer”. Follow the prompts to select the IRA Brokerage Cash account and the funding bank account. Choose the frequency, date, and payment option (contribution year and amount). Select “Continue” to move forward.. Current-year contributions and remaining eligible amount will display before confirming.

Eligible IRAs for online contributions include Traditional and Roth IRAs, Simple IRA (employer contributions), and SEP IRA (individual contributions). Contributions must come from an account with the same ownership.

If using a non-Wells Fargo account, add and verify it first under “Pay & Transfer”, then “Transfer”.

Can I mail a check to contribute to my IRA?

Yes.

To deposit a check, first make sure to

• Make the check payable to Wells Fargo Advisors.
• Write the contribution year and account number on the check, even when submitting with the form.
• Be sure to write all relevant information (account number, etc.) on the check.
• Check deposits have a seven business day hold before a distribution can be processed.

Then, mail your check along with any other required paperwork for the deposit, if applicable, to the address listed below:

Wells Fargo
Brokerage Check Processing Main
PO BOX 857592
Minneapolis, 55485-7592

If you need to overnight mail a check:
If overnight delivery is needed, mail to:
Attn: LOCKBOX SERVICES 857592
1801 Park View Drive 1st Floor
Shoreview, MN 55126

Include 'Lockbox Services' and Lockbox Number 857592 in the reference section of the mailing label.

Can an IRA rollover be completed by mailing a check?

Yes.

If you are rolling over from your personal account (an indirect rollover), you will need to mail in a form along with a check to complete a rollover by mail. Follow these steps:

You need to complete one of the following forms and send with your check
#585700 for a traditional or roth ira
#596120 for a business traditional or roth ira
#569383 for a SEP or Simple IRA

Clearly write ROLLOVER and the brokerage IRA account number on the check.

Make checks payable to:

Wells Fargo Advisors FBO [your name],
Wells Fargo Clearing Services, LLC FBO [your name] or
WFCS, LLC FBO [your name], or
Wells Fargo FBO [your name].

Mail your check, and if applicable, the appropriate form to:

Wells Fargo Brokerage
PO BOX 857592
Minneapolis, MN 55485-7592

If overnight delivery is needed, please mail to:

ATTN: LOCKBOX SERVICES 857592
Wells Fargo Brokerage
1801 Park View Drive 1st Floor
Shoreview, MN 55126

Include 'Lockbox Services' and Lockbox Number 857592 in the reference section of the mailing label.

How do I know if I’m eligible to take an IRA distribution online?

Eligibility depends on your account setup and whether Brokerage Cash Services (BCS) is enabled on your IRA.

BCS Eligibility requirements:

Have the Wells Fargo mobile app, or have access to wfa.com on mobile or desktop

Have one of the following accounts WellsTrade, Wells Fargo Advisors Solutions, WBS, PCG or FiNet

Must be enrolled in Access Online

Must have Trusted mobile number

No BORD restrictions

Some managed accounts and Business accounts are ineligible

How soon can I request a distribution after enrolling in Brokerage Cash Services (BCS)?

An overnight update is required before your cash balance is available for distribution. We’re currently working on enhancing this experience to allow immediate distributions.

Are there limits to how much I can transfer?

Yes. Digital money movement limits apply to all IRA distributions, including full and partial withdrawals.

How many distributions can I request in a day?

There is no limit to the number of distribution requests you can submit each day.

Where can I send my IRA distribution?

You can transfer funds to any non-retirement account that you own individually or jointly, including:

• Wells Fargo checking or savings accounts
• Wells Fargo Advisors brokerage accounts
• Accounts at other financial institutions

Do I need to verify my identity each time I request a distribution?

Yes. For your security, you may be asked to verify your identity when submitting a distribution request.

Why don’t I see my RMD amount?

If we don’t have the information needed to calculate your Required Minimum Distribution (RMD)—such as your prior year-end account balance—it may display as “Not Available.” You can use an RMD calculator to estimate your required amount.

Will I receive confirmation of my distribution?

Yes. You’ll receive a confirmation by:

• Email
• Secure message in your online account

If email delivery fails, a paper letter will be mailed. You can also print your confirmation for your records.

Can I cancel a distribution after submitting it?

Once you hit submit for an online transfer, it cannot be canceled.

What happens if I don’t have enough cash available?

If your requested amount exceeds your available cash, you’ll receive a notification with next steps. You may need to sell investments to make cash available, then return to complete your request.

Can I withhold 100% of my distribution for taxes?

This option is not currently available online. Please call the number on your statement for assistance.

Is my request reviewed before processing?

No. Most requests are processed automatically once submitted.

Can I request a distribution if my account is being transferred (ACAT)?

No. Distributions are not available while your account transfer is in progress.

What if more funds are added to my account after I take a full distribution?

If additional funds (such as dividends or interest) are deposited, you can request another distribution to avoid potential fees.

Do I need to add my bank account before requesting a distribution?

Yes. If you’d like to send funds to an external account, you’ll need to add and verify that account before submitting your request.

Does the account need to be in my name?

Yes. The receiving account must be owned individually or jointly by you.

Can I access records of my distribution?

Yes. Distribution confirmations are available in your account documents. You can find the documents by Selecting Menu > Select Statements & Documents > Under Investing, select Statements and Documents > Select Document Type and select applicable document (statements, tax documents/1099s, trade confirmations, account agreements, Notices/Disclosures) > Select View Results

Manage Dividend Reinvestments

Can I manage dividend reinvestment online?

Yes. You can manage dividend reinvestment here in the app.

How do I update my dividend reinvestment settings?

• Mobile App: Account → Account services → Manage dividend reinvestment
• Mobile Browser: Menu → Portfolio → Dividend Reinvestment

Clients can turn reinvestment on or off and set exceptions for individual securities.

What investments are eligible to be changed or managed online?

Most trade-enabled positions, such as equities, can be managed on the app. . Mutual funds cannot be changed within the app.

When are changes processed?

Changes are processed in real time until 5:45 PM CT. Requests submitted after this time are processed the next business day.

When do changes take effect?

• Firm Reinvest Eligible: Submit at least 1 business day before payable date
• DTC Reinvest Eligible: Submit on or before record date

Can I change my mutual fund distributions from reinvestment to an external account?

Contact the phone number on your statement for assistance with updating your mutual fund distributions to an external account.

Where do I find new account documents online?

New account documents are available under Statements & Documents in the app.

Where can I find forms?

Forms aren’t available on the mobile app you will need to sign on from a desktop.

From the Desktop: Sign on and go to Customer Service > Forms, then select the needed category: Account Forms, Move Money & Securities, IRA, or Tax Forms.

How can I upload a document?

If you have a WellsTrade, Intuitive Investor or Solutions account, this feature is available on your desktop browser only. You can upload documents through the Message Center. Click on the new messages icon, select “Send Documents”, and then follow the online instructions to attach your chosen document to upload.

If you don’t have one of these accounts, contact your Financial Advisor team for the best way to securely send your documents.

Where do I change how I receive my statements?

You can manage your delivery preferences in the app by selecting ‘Statements & Documents’>Delivery Preferences.

When will I receive my statements?

Statements are issued at least quarterly, and in any month with account activity. Statements reflect the full calendar month and are processed after the last business day of the month.

An email notification is sent to the primary email of record when a document is available to view online.

Why can’t I see my statements?

This may be due to the account being closed longer than 7 years. Statements are viewable for up to 7 years online.

Brokerage account statements are only generated monthly if there is activity, otherwise quarterly statements will be available.

Where can I get my tax documents?

You can access tax documents in the app. Select Menu, then Statements & Documents. In the Investing section, select Statements & Documents. Choose your Account and then select Tax Documents/1099s as the Document Type and the desired Tax Year.

Statements, Trade Confirmations, and Tax Documents/1099s are available online for up to 10 years.

When are tax forms available?

Tax forms for your brokerage accounts are mailed between late January and the end of February. If you have more than one account, they may arrive at different times.

Amended tax documents are delivered at different times depending on the specific form and account type. Refer to the Tax Center in your mobile app for additional details.

Do beneficiaries have access to statements?

Beneficiaries don’t have access to brokerage statements while the account is active. Access is generally provided only after the account holder’s passing, once the beneficiary claim is completed and assets are transferred.

How do I access account conversion notices from my phone?

You can access account conversion notices in the app. Select Menu, then Statements & Documents. In the Investing section, select Statements & Documents. Choose your Account and then select Tax Documents/1099s as the Document Type and the desired Tax Year.

How can I receive an asset verification letter?

To receive a letter confirming the balance of your account, please contact the support number shown on your account statement.

How can I close my account?

Please contact the number on your statement to get assistance with closing your account.

How can I receive funds from my closed brokerage account?

Remaining funds are typically disbursed during the account closure process, either by check or transfer to a linked bank account, based on the instructions on file. If you have not received your funds, contact the phone number on your statement to confirm how the funds were sent and check the status.