Personal Finance FAQs

It’s easy to complete the application process. Simply read the Traditional IRA Fact Book or the Roth IRA Fact Book and you can apply online. Be sure to pick one or more suitable investments and choose the type of IRA(s) you prefer. A Wachovia Retirement Specialist can assist you in opening an account.

Simply establish a Wachovia IRA and complete an IRA transfer form. We’ll request the money directly from your current institution (custodian) and transfer it into your Wachovia IRA. As an alternative, you may withdraw the money yourself from the current custodian and send it to us as a rollover. Bear in mind, however, that this money is reported to the IRS and is considered taxable unless it is deposited into another IRA within 60 days of the distribution date. You are limited to one rollover per year (direct transfers are not limited).

Anyone with earned income in a given year. Earned income can be more readily understood as "work" income as opposed to "investment" income. Any individual* can contribute up to 100% of earned income, or the maximum annual contribution amount, whichever is less, to an IRA each year. Non-working spouses may also contribute the maximum annual contribution amount.

*You must be under the age of 70^1/2 to contribute to a Traditional IRA. You must not exceed income limits for making contributions to a Roth IRA.

You may contribute to your existing IRA by April 15 and still have it count for the previous year. You can either:

• Make your contribution at any Wachovia Financial Center, or
• Mail your contribution check to:

IRA Department

c/o IRA Contributions, NC 1164

401 South Tryon Street

Charlotte, NC 28254-1164

Please be sure to include your Social Security number on your check and indicate the tax year of the contribution. If no tax year is noted, the contribution will be made for the current year. If you have any questions, contact us at (866) 588-9606.

Deductible Traditional IRA contributions are reported on Form 1040. Non-deductible Traditional IRAs are reported on Form 8606 and should be submitted with your taxes. Form 8606 may be obtained by calling (800) TAX-FORM or by visiting www.irs.gov.

Consult the Worksheet for Reduced IRA Deduction in IRS Publication 590 to determine the amount of your partial deduction.

A spouse who doesn’t have earned income may still contribute the maximum annual contribution limit* to his or her own separate IRA. Generally, the same rules apply as for regular IRAs. Note: the nonworking spouse may take a tax deduction for a Traditional IRA as long as the working spouse is not a participant in an employer-sponsored retirement plan or, if the working spouse is a plan participant, the couple’s MAGI is $150,000 or less.

*You must be under the age of 701/2 to contribute to a Traditional IRA. You must not exceed income limits for making a spousal contribution to a Roth IRA

If you’re about to receive a payout from your employer’s retirement plan, you may wish to set up a Rollover IRA through Wachovia’s Rapid Rollover Service to receive the funds. A Rollover IRA is a special IRA specifically designed to hold monies rolled over from employer retirement plans. With a Rollover IRA you:

• Avoid taxes and penalties incurred if you received your payout directly in cash.
• Keep your money tax-deferred.
• Have the flexibility to move your money into a new employer’s retirement plan at a later date.

For more information about the choices available to you, call a Retirement Specialist at (866) 588-9606.

Be sure to check first with your plan administrator to see if you can remain in your former employee plan and find out what fees or special conditions must be met.   This plan may offer you special benefits not available in an IRA, such as penalty-free early retirement, no investment transaction fees, and, in some cases, advantageous income tax averaging rules.

If your new employer will accept assets from your previous employer's plan before you are eligible to participate, you should consider a direct rollover.   Although rolling your distribution into a new employer's plan keeps it free from taxation and maintains its tax deferred status, it is usually not the simplest solution.   Study your new employer's plan provisions and carefully weigh any advantages it offers over an IRA.

If you need retirement income now, taking your distribution in cash gives you instant access to your savings.  But if you don't direct the distribution to another qualified plan or IRA, your employer is required by law to withhold 20 % of the distribution for taxes.  In addition to the mandatory withholding, your distribution is subject to income tax and may also be subject to a 10 % IRS penalty if you are under age 59 ½.

A direct rollover of retirement plan distributions can always be made to a Traditional IRA.  Call one of our retirement specialists to roll over your assets into an IRA.   With our self-directed IRAs, you can choose investments from a wide variety of products to suit your personal preference, including stocks, bonds, and mutual funds.

No, you don’t have to keep your Rollover IRA separate.

An IRA may best serve those willing to make a long-term commitment. However, you can withdraw from your IRA at any time, but you risk a 10% IRS penalty if you do so before age 59^1/2. One exception: Contributions to a Roth IRA may always be withdrawn tax- and penalty-free.

Beginning April 1st of the year after you reach age 70^1/2, there is a minimum amount you must withdraw from your Traditional IRA each year. However, you can withdraw more if you like. Wachovia can calculate and process this distribution automatically each year.

If you’re currently receiving distributions from your IRA, you can direct them into our CAP account, where they will begin to earn competitive returns from the sweep investment option you choose.  It’s the most convenient and flexible way to manage all your financial needs.

An IRA is a trust held for your benefit by a financial institution. This means that IRAs, unlike most regular investments, transfer ownership without having to pass through your will. You elect a primary beneficiary (or a group of beneficiaries) to receive the account in the event of your death, and you select a secondary beneficiary in case something should happen to the original beneficiary. You may elect a trust or charity as your beneficiary. If your spouse is the beneficiary, he or she may roll over the proceeds in the event of your death into his or her own IRA. If the beneficiary is not your spouse, the money must be withdrawn with regard to certain requirements.