ATM Safety Tips
Safety, Liquidity and Return
Transfers and Rollovers
We are pleased to offer convenient 24-hour ATM services at all five Bank locations.
Have your card ready and in hand, along with other transaction materials, before you approach an ATM. As a matter of courtesy, wait until previous customers have finished their transactions before approaching the ATM. Allow an adequate amount of distance between you and others using the ATM. Stand close to the ATM when entering your PIN. Do not allow anyone to watch.
Pull up close to the ATM. Remain in your car while conducting your ATM transaction. For added security, keep car doors locked and windows rolled up before and after making your transaction. Keep your car running while operating the ATM.
Remember that your personal safety while conducting transactions at an ATM depends largely on the safety steps you follow. By making you aware of these important ATM safety tips, we hope to make you a partner in our continuing efforts to provide a safe and convenient environment.
Financial institutions today offer a variety of products and investment options, from simple checking and savings accounts to mutual funds. Which is right for you? Only you can make that decision. But knowing your options will help.
Financial advisors consider three major factors when making investment decisions:
SAFETY -- Is the investment insured; can you lose the interest or principal?
LIQUIDITY -- How available is your money? Can you get it at a moment's notice, or must you wait?
RETURN -- What is the rate of return?
It helps to think of these three factors as points of a triangle. For most financial products and investments, these factors should be carefully considered. Seldom does an investment offer all three: safety, liquidity and high return.
Investments such as mutual funds, annuities and securities are increasingly attractive options to consumers and often are available from Full Service Banks®. However, no matter who is selling them, they are not insured by the FDIC, and they are not a deposit of, nor an obligation of, nor guaranteed by the bank or by the federal government. You can lose money (both principal and interest), as well as make money, with uninsured investments as the financial markets work through their cycles.In part because more risk is associated with uninsured investments, they have the potential for a higher return.
For many consumers, advisors would suggest a mix of investments -- a combination of options that can help you achieve your specific goals. Whatever your goals and concerns, the people at your Full Service Bank want you to be fully informed.
For detailed information about Federal Deposit Insurance, call 1-800-934-3342 and ask for the FDIC's free brochures, "Your Insured Deposits" and "insured or Not Insured: A Guide to What Is and Is Not Protected by FDIC Insurance". For more information about mutual funds and other investment products, ask your banker for a copy of the Office of the Comptroller of the Currency's publication, "Deposits & Investments: There's a Critical Difference."
The dollars you've saved have probably required some sacrifices for the benefit of a more secure retirement. Now that you have those dollars safely in an IRA or another retirement plan, it's paramount that you protect their tax advantages if you are considering moving them from one kind of plan to another, or simply from one trustee or custodian to another.
Mishandling such asset movements can have potentially disastrous tax consequences. Recent tax court rulings confirm that the IRS generally considers the individual taxpayer -- the individual who owns the IRA or the retirement plan account -- to be responsible for making the right decisions and taking the right actions, as well as accepting any tax consequences that arise.
Following is a general overview of the options available. For more specific information, consulting with a competent tax advisor is always recommended.
The assets in your IRA or employer-sponsored retirement plan -- commonly referred to as a qualified plan -- can be moved by several different transactions. These are known as:
A rollover begins with a payout (termed a distribution), followed by re-contribution of all or a portion of the assets to another plan. The payout may be from an IRA, or from a qualified plan. Re-contribution to an IRA or a qualified plan must take place within a 60-day period, or the assets lose their ability to be returned to a tax-advantaged account, and -- unless they have previously been taxed -- will generally be treated as ordinary income and taxed in the year they are received.
Because a rollover begins with a distribution, the IRS will receive a report showing that the taxpayer received the funds. If the assets are re-contributed to an IRA, a separate report to the IRS will confirm this. If the IRS does not receive such a confirmation, however, it will be presumed that the funds are taxable.
A rollover is not allowed in certain circumstances. Prohibited are:
With certain restrictions, assets are included in income and taxed, but their future earnings may be tax-free when placed in a Roth IRA, a potentially greater long-term benefit. Our representative may suggest you seek qualified tax advice to learn if this will be beneficial to you.
In retirement plans, the term "transfer" has a narrower meaning than in everyday communication. A transfer is the movement of plan assets directly from trustee-to-trustee or custodian-to-custodian, with no limitation of one transfer per 1 2-month period, as there is with IRA rollovers. With a transfer transaction, the taxpayer does not have the ability to cash and use the funds. Therefore, the transaction is not considered a distribution to the taxpayer, is not reported and the IRS will not consider the income taxable.
A direct rollover has some of the characteristics of both rollovers and transfers. A direct rollover:
Assets held in most qualified retirement plans are eligible for direct rollover, with certain exceptions, including
When assets are distributed from a qualified plan directly to a plan participant, there is generally mandatory withholding of 20 percent of the distribution as a pre-payment of tax liability, even if the distribution is ultimately rolled over to another plan. However, if the qualified plan assets move directly to an IRA or another qualified plan via a direct rollover, this amount is not withheld.
Although a direct rollover is very much like a transfer, it is reported to the IRS like a distribution. A special code on the distribution report alerts the IRS to the fact that the assets were moved via a direct rollover to another IRA or qualified plan, and are not currently taxable.
Rollovers, direct rollovers and transfers offer opportunities to move your retirement assets to where you want them, while retaining their substantial tax advantages. One of our representatives will be happy to discuss these options with you, and help you complete such a move safely and securely.
You’ve worked hard to save money for retirement. You’ve made contributions to your IRA or employer retirement plan, perhaps both. Now the time has come to withdraw some of your retirement funds. It’s time for a distribution.
Understanding when and how withdrawals can or must be taken, and the options available at such times, is vital if a person hopes to make tax-wise decisions regarding their retirement plan assets. For specific details about receiving distributions from a particular type of retirement plan, seeking the advice of competent tax advisor is always recommended.
Taking a distribution is much easier with IRAs than with most qualified plans. IRA assets are essentially available on demand. Qualified plan assets, on the other hand, generally require that an event-known as a "triggering event"-must occur before assets can be withdrawn. These events differ slightly from plan to plan, but generally include:
Some plans allow withdrawals while still employed, without having a true triggering event. These amounts are known as "in service withdrawals."
Whether the plan is an IRA or a qualified plan, withdrawing funds before age 59 ˝ generally carries with it an IRS penalty of 10 percent of the amount withdrawn, with certain exceptions.
These exceptions include:
Withdrawals after age 59 ˝ are not subject to a penalty tax.
Congress’s purpose in creating IRAs and qualified plans was to help make retirement more secure, not to provide tax shelters that would delay taxation indefinitely. Congress therefore established age 70 ˝ as the time when distribution from retirement accounts are generally required to begin.
Such "required minimum distributions"
(NOTE: A law change in 1996 allows employers to offer participants in qualified plans the option to delay distribution until retirement, if they remain employed after age 70 ˝).
Distributions, plus their tax deferred earnings, are generally included in ordinary income and taxed in the year distributed. However, Traditional IRAs and some qualified plans do allow after-tax contributions. These amounts are not taxed when distributed, but their tax-deferred earnings are.
Special tax options may apply to certain distributions from qualified plans. If the distribution qualifies, income tax liability may be reduced by using:
Both IRAs and qualified retirement plans allow the naming of beneficiaries, in the event that the IRA holder or plan participant dies before all assets are paid out.
Depending on the age of the IRA holder when he or she dies, and their relationship to the beneficiary, the beneficiary may:
Qualified plan beneficiaries have somewhat different options. Distributions of qualified plan assets to beneficiaries may generally be received:
Distribution from traditional IRAs or qualified plans that exceed amounts needed to satisfy the required minimum distribution rules, may be eligible to be rolled over to an IRA, or to another qualified plan.
For assistance of your Traditional IRA or qualified plan distribution questions, one of our representatives will be happy to assist you.
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