Looking for help with your account? Choose from the category and topics below to find answers to your questions.

Union Bank offers a range of investment choices for your IRAs. 

FDIC-insured options include fixed- and variable-rate time deposits, a money market savings account, and our Bonus Rate Rollover IRA time deposit. 

UnionBanc Investment Services, the brokerage subsidiary of Union Bank, offers investment options for your IRA. These investments are not FDIC insured and not protected against market or investment loss.

You can make Traditional or Roth IRA contributions for the previous tax year until your tax return due date (not including extensions), generally April 15.

When you leave a job or retire, if you receive a distribution from your employer-sponsored retirement plan, it can trigger adverse tax consequences (see question 8.3). If you or your employer make an eligible rollover distribution to another qualified retirement account, such as a Rollover IRA, you can avoid incurring taxes and penalties as a result of a distribution. This strategy also helps keep your money earning tax-deferred income.

No, an IRA must be put in an individual's name. However, you can name your trust as a beneficiary. Consult your attorney for more information. 

No, you cannot both participate in the same IRA. Each spouse must have a separate IRA.

Yes. If you meet certain compensation limits and eligibility requirements, you may claim a Traditional IRA deduction on your tax return if you make your contribution by the due date of your tax return, generally April 15 of the following year. This rule applies even if you file your tax return before April 15. Since Roth IRA contributions are not tax deductible, you cannot claim a deduction for Roth IRA contributions. Consult your tax advisor regarding your specific tax situation.

No, your combined annual contributions to both Traditional and Roth IRA plans cannot exceed the maximum annual contribution limit.

Union Bank assesses a $25 annual custodial fee on each Traditional and Roth IRA. This fee is waived if any one of the following applies:

• You maintain a combined fair market value of at least $25,000 in your Union Bank and UnionBanc Investment Services IRAs (excluding Small Business Plans and Coverdell Education Savings Accounts)
• You contribute $4,000 or more to one or more Union Bank and UnionBanc Investment Services IRAs (excluding Small Business Plans and Coverdell Education Savings Accounts) by December 31 of the prior year
• You are 70 or older by June 30 of the prior year
• You are a primary owner of a Priority Banking® or a Private AdvantageSM checking account.
• You can prepay the custodial fee before January 15. Otherwise, we debit the fee from your IRA in late February. 

Yes. You can also consolidate multiple retirement accounts into one or more accounts at Union Bank.

Generally, you can directly roll over a distribution from a qualified retirement plan (see question 8.3) into a Traditional IRA. Distributions you cannot roll over include:

• Death distributions to a non-spouse beneficiary
• A series of substantially equal periodic payments over your life expectancy
• Required Minimum Distributions (RMDs) after age 70 1/2
• Any hardship distributions, regardless of contribution source
• Certain defaulted loan amounts treated as taxable distributions
• For more details, consult your tax advisor. 

A plan that meets the requirements of IRS Section 401(a) is a qualified retirement plan and is eligible for special tax consideration.

You may be able to contribute to a Traditional IRA, if you:

• Are under age 70 1/2
• Have earned income or have a spouse with earned income
• Meet other eligibility requirements.

If you meet the eligibility requirements:

• For tax years 2017 and 2018, you can contribute up to $5,500: up to $6,500 if you are 50 or older;
• OR 100 percent of your earned income, whichever is less. (Note: Earned income does not include investment earnings such as interest and dividends.)

No. A law passed in 2001 defines increases in the contribution limits through 2008, with potential cost-of-living adjustments in $500 increments starting in 2009. Eligibility requirements apply. The law also allows you to make additional catch-up contributions if you are 50 or older. The maximum contribution limits for tax years 2017 and 2018 are:

• $5,500 if younger than 50.
• $6,500 if 50 or older.

You can begin withdrawing from a Traditional IRA without early-withdrawal IRS penalties at age 59 1/2.

You can generally take distributions from a Traditional IRA for the following purposes, subject to certain restrictions, without IRS early-withdrawal penalties:

• Health insurance premiums or medical expenses that exceed 7.5 percent of your adjusted gross income
• A first-time home purchase ($10,000 maximum)
• Qualified higher-education expenses for you, your spouse, your children, or your grandchildren
• Substantially equal periodic payments taken over the course of your life expectancy
• If you become disabled

A Roth IRA is a type of retirement account for which you make contributions with after-tax dollars, but earnings on qualified withdrawals are tax-free. 

With a Traditional IRA, you pay taxes on principal and earnings when you withdraw them. Depending on your income, you may be able to deduct the initial contribution to a Traditional IRA. With a Roth IRA, you pay income taxes on your contributions, but the earnings on qualified withdrawals are tax-free. 

There are no age limitations. Your MAGI (income before certain deductions) determines your eligibility to contribute to a Roth IRA. 

If you’re single and your MAGI for tax year 2017 is:

• Less than $118,000, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $118,000 and $132,999, you may make a partial contribution to a Roth IRA
• $133,000 or more, you may not contribute to a Roth IRA

If you’re married filing jointly and your MAGI for 2017 is:

• Less than $186,000, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $186,000 and $195,999, you may make a partial contribution to a Roth IRA
• $196,000 or more, you may not contribute to a Roth IRA

If you’re single and your MAGI for tax year 2018 is:

• Less than $120,000, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $120,000 and $134,999, you may make a partial contribution to a Roth IRA
• $135,000 or more, you may not contribute to a Roth IRA

If you’re married filing jointly and your MAGI for 2018 is:

• Less than $189,000, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $189,000 and $198,999, you may make a partial contribution to a Roth IRA
• $199,000 or more, you may not contribute to a Roth IRA

For more information about your IRA eligibility, consult your tax advisor. 

For tax years 2017 and 2018, you can contribute up to $5,500 if you are younger than 50; up to $6,500 if you are 50 or older. 

or 100 percent of your earned income, whichever is less. 

(Note: Earned income does not include investment earnings such as interest and dividends.)

No. A law passed in 2001 defines increases in the contribution limits through 2008, with potential cost-of-living adjustment in $500 increments starting in 2009. Eligibility requirements apply. The law also allows you to make additional catch-up contributions if you are 50 or older. The maximum contribution limit for tax years 2017 and 2018 are:

• $5,500 if younger than 50.
• $6,500 if 50 or older.

Qualified distributions are tax-free. Withdrawals before age 59 1/2, non-qualified distributions, including those within the 5-year holding period, may be subject to a 10% tax on early distributions, unless one of the exceptions provided by the IRS applies.

A qualified distribution requires: 

Assets be held in a Roth IRA for at least five taxable years (beginning with the first taxable year for which you contributed to a Roth IRA of any kind) and one of the following events:

• Attain age 59 1/2
• Disability
• Purchase of a first home
• Death of the account holder

No. With a Traditional IRA, you must begin taking minimum distributions by April 1 following the year in which you turn 70 1/2. With a Roth IRA, the required minimum distribution rules do not apply until you die.

Yes, however you should discuss with your tax advisor the eligibility requirements and how this type of conversion would affect your individual tax and financial situation.

A Coverdell Education Savings Account allows you to save up to $2,000 per child, per year until the child turns 18 for elementary, secondary-education, and higher-education expenses, subject to eligibility requirements. While contributions are not tax-deductible, earnings grow tax-deferred, and qualified distributions are tax-free.

Any qualifying individual can contribute to an education savings account, making this an ideal savings option for parents, grandparents, other relatives, and friends. 

• You are eligible for a full contribution to an education savings account ($2,000 in total contributions per child, per year) if your adjusted gross income is: 
• Less than $95,000 (single taxpayer)
• Less than $190,000 (married taxpayer filing joint return)
• You are eligible for a partial contribution to an education savings account (less than $2,000 per child, per year) if your adjusted gross income is:
• Between $95,000 and $110,000 (single taxpayer)
• Between $190,000 and $220,000 (married taxpayer filing joint return)

More than one person can contribute for the same child, and more than one education savings account can be established for the same child. However, the total combined contributions cannot exceed $2,000 per child, per year, across all accounts. Contributions must stop when the child attains age 18, except in the case of children that meet certain special-needs requirements.

Although the account is in the child's name, the account's responsible individual (the child's parent or guardian) controls the education savings account until all of the funds are distributed. The responsible individual is the individual who has the power to direct the investment of contributions; redirect the initial investments; and direct the financial organization regarding administration, management, and distribution of the funds (generally, until the child attains the age of majority).

The education savings account is designed to be part of an overall savings plan. It offers the advantage of tax-free earnings when you withdraw the funds for qualified education expenses. Also, since 2002, you can contribute to an education savings account and to a qualified state tuition program for the same child in the same year.

Although the contributions are not tax-deductible, you can withdraw earnings tax-free for qualified education expenses.

You have until your tax return due date (not including extensions), typically April 15, to contribute to an education savings account for the tax year for which you are filing.

Yes. The $2,000 maximum contribution per child, per year does not affect your ability to contribute to a Traditional or Roth IRA.

Yes. You must use withdrawals from an education savings account for qualifying education expenses or the earnings may be subject to income tax and possible penalties.

You can withdraw earnings tax-free and without penalty for qualified education expenses. These include tuition, fees, books, supplies, and equipment required for the education of the designated beneficiary at an eligible educational institution. If the student is half-time or greater, room and board is considered a qualified education expense. Note: Depending on the investment option chosen, Union Bank early-withdrawal penalties or compensating fees may apply if funds are withdrawn prior to the maturity date.

Although contributions must stop when the child attains age 18, the account can remain open until the child turns 30. If the funds have not been distributed by that time, the account balance must be withdrawn within 30 days or transferred to another child within the same family within 60 days. The mandatory distribution requirement does not apply to students with special needs.

A Savings Incentive Match Plan for Employees (SIMPLE) gives eligible businesses with 100 or fewer employees a way to help employees save for retirement without complicated paperwork and procedures. Each employee sets up a SIMPLE IRA, which is a tax-deferred retirement account. The employer makes tax-deductible contributions to the SIMPLE IRAs. Employees may also contribute to their SIMPLE IRAs through payroll deductions.

Small businesses, including self-employed individuals, with 100 or fewer employees that do not maintain any other qualified retirement plan are eligible.

While employers may choose more-liberal eligibility requirements, they must include all employees who meet both of the following requirements:

• Received compensation of at least $5,000 in any two preceding years
• Reasonably expect to receive at least $5,000 in the current calendar year
• Age is not a consideration. Employers may exclude nonresident aliens or employees covered by a collective agreement.

Employer contributions are mandatory and can be accomplished in one of three ways:

• Match employee contribution dollar for dollar, up to 3 percent of the employee compensation. 
• In two of any five years, the employer may choose to match only 1 percent of employee compensation.
• Contribute 2 percent of compensation for all eligible employees who have earned at least $5,000 during the year, including employees who choose not to make their own contributions.
   

For tax years 2017 and 2018, employees may contribute a specified percentage of their income up to a maximum $12,500 ($15,500 for those age 50 and older) through regular payroll deductions.

For employers:

• Tax benefits: deductions for both employee deferrals and matching contributions
• Ease: a retirement plan that's easier to set up and more economical to administer than a 401(k) plan

For employees:

• Tax benefits: contributions and earnings are tax-free until withdrawn
• Retirement plan: employees of small businesses build retirement savings

An employer may open a SIMPLE IRA for a tax year on any date between January 1 and October 1 of that year. New employers established after October 1 of the year can establish a SIMPLE IRA plan as soon as administratively possible.

The employer must deposit employee contributions no later than 30 days after the close of the month in which the payroll deduction takes place. The deadline for employer contributions is the employer's tax return due date (including extensions).

SIMPLE IRA plans must be maintained on a calendar-year basis.

If you participate in a SIMPLE IRA plan, the IRS considers you an active participant in an employer-sponsored retirement plan. This can affect whether you can deduct contributions to a Traditional IRA, depending on your income. However, you can participate in a SIMPLE IRA plan and still contribute to an IRA, subject to IRS rules on IRA eligibility. A SIMPLE IRA plan contribution does not count against your limit for Traditional or Roth IRA contributions.

You may make a tax-free rollover of your SIMPLE IRA to another SIMPLE IRA at any time. You must participate in a SIMPLE IRA plan for at least two years to be eligible to make a tax-free rollover to a non-SIMPLE IRA. The two-year period begins on the first day on which the employer deposits a contribution into the SIMPLE IRA. You can roll over a SIMPLE IRA into another SIMPLE IRA, a qualified plan, a tax-sheltered annuity (section 403(b) plan), or a state or local government deferred-compensation plan (section 457 plan). Consult a tax advisor for more information.

Distributions from a SIMPLE IRA are generally taxed like distributions from a Traditional IRA. Funds withdrawn prior to age 59 1/2 are generally subject to early-withdrawal penalties. Distributions taken (before age 59 1/2) during the first two years of participation in a SIMPLE IRA may be subject to a 25 percent penalty; after two years' participation, the penalty decreases to 10 percent.

You must receive the first distribution by April 1 of the year following the year you attain age 70 1/2 and then annually by December 31 thereafter.

A Simplified Employee Pension (SEP) plan is an employer-sponsored retirement plan that uses IRAs to minimize cost and paperwork. Each employee sets up a SEP IRA, which is a tax-deferred retirement account. A business or self-employed individual makes tax-deductible contributions to the SEP IRA. Once an employer makes a contribution to a SEP IRA for an employee, the funds belong to the employee and are subject to Traditional IRA rules. Each employee directs his or her own investments.

Businesses of any size, including:

• Sole proprietorships, including a self-employed individual
• Partnerships
• Corporations
• Tax-exempt entities, such as nonprofits 

While employers may choose more-liberal eligibility requirements, they must include employees who meet all of the following requirements:

• Are age 21 or older
• Have worked for the employer during any three of the preceding five years
• Earn at least $600.
• Employers can exclude nonresident aliens and employees covered by collective bargaining agreements. 

The maximum annual contribution for each employee for 2017 is either 25 percent of compensation or $54,000, whichever is less. For 2018 it’s up to 25% of compensation or $55,000, whichever is less. 

For employers:

• Tax benefits: employer contributions are tax-deductible business expenses.
• Flexibility: employers can decide how much to contribute, up to the IRS-imposed limitations, or whether to contribute at all.
• Ease: a retirement plan that's easier to set up and more economical to administer than a 401(k) plan.

For employees:

• Tax benefits: contributions and earnings are tax-free until withdrawn.
• Retirement plan: employees build retirement savings.

An employer must establish SEP plans by the business's tax-filing deadline (including extensions).

An employer must contribute to SEP plans by the business's tax-filing deadline (including extensions).

While employers make contributions to SEP IRAs, the funds belong to the employee (employees are immediately 100 percent vested in their SEP IRA funds) and are subject to Traditional IRA rules. Each employee directs his or her own investments. Only businesses (employers) can contribute to SEP IRAs. In contrast, only individuals can contribute to Traditional IRAs.

aIf you participate in a SEP plan, you are considered an active participant in an employer-sponsored retirement plan. This may affect whether you can deduct Traditional IRA contributions, depending on your income. However, you can participate in a SEP plan and still contribute to an IRA. A SEP plan contribution does not count against your limit for Traditional or Roth IRA contributions.

Distributions from a SEP IRA are generally taxed like distributions from a Traditional IRA. Funds withdrawn prior to age 59 1/2 are generally subject to early-withdrawal penalties.