What Individual Retirement Accounts(IRA) does BUYandHOLD offer?

BUYandHOLD currently offers the following IRAs:

Traditional IRA - The most often mentioned benefit of a Traditional IRA is tax-deferral: your contributions and the earnings on those contributions grow tax-deferred over the life of the account. Also, depending on your income you may be able to take a tax deduction for the contribution.

Roth IRA - The most often mentioned benefit of a Roth IRA is tax-deferral: your contributions and the earnings on those contributions grow tax-deferred over the life of the account. Plus, if you meet IRS qualifications, all monies withdrawn at retirement can be done so tax-free.

Coverdell Education Savings Account - A Coverdell Education Savings Account (ESA) is an account that helps individuals save for the cost of elementary, high school or higher education. You can open multiple Coverdell ESA accounts on behalf of anyone under the age of 18, as long as the total contributions do not exceed $2,000 in total a year per child.

Certain age-related limitations, will not apply to any designated beneficiary with special needs (as determined under regulations prescribed by the Secretary)."

Rollover IRA - A Rollover IRA is an IRA that is used to hold assets that have been distributed from an employer's retirement plan, such as a 401(k) or Profit Sharing Plan. There is no limit on the amount of money you can rollover.

401(k) plans rolled over into a Rollover IRA can now also get rolled into a new employer's 403(b), 401(k) or 457 plans.

Do you offer SEP IRAs?

BUYandHOLD does not currently offer SEP IRAs.

Is there a monthly fee for IRAs?

There is no monthly fee for IRAs. The IRAs have a per trade commission of $2.99 for Buying/Selling/E-ZVest.

Can I have the unlimited plan for my IRA?

Currently the Unlimited trading pricing plan is not available for IRAs.

Is there a setup fee or minimum balance for IRAs?

No. There is no setup fee and there is no minimum balance for IRAs, however, there is an annual fee.

Is there an annual fee for IRAs at BUYandHOLD?

Yes. There is an annual fee of $25 for Traditional, Roth and Rollover IRAs, which will be charged yearly on the anniversary of your account opening. The annual fee for Coverdell ESAs (formerly Education IRAs) is $10.

Please Note: If you set up a monthly E-ZVest within 30 days of opening your account and keep it active until the anniversary of your account opening, your annual fee will be waived.

Upon termination of my IRA account, what fees will be assessed?

There is a $50 termination fee that will be charged for full transfers out of BUYandHOLD and for full distributions. For Coverdell ESAs the fee applies for full transfers out and for full distributions.

You will be charged the full annual fee upon termination of the account.

Please Note: the annual fee will not be prorated should termination occur prior to your anniversary date.

For more information on the Schedule of fees for optional services, please use the provided link.

http://www.buyandhold.com/bh/en/about/fees.html

Are there penalties for withdrawing money from my IRA Account?

Yes. Since IRAs are intended to provide income during retirement, there are tax penalties on early withdrawalsand distributions from IRA accounts. Please visit the FAQs section in the Retirement Focus area, under the heading ?IRA Distributions? for details on withdrawals.

http://www.buyandhold.com/bh/en/retirement/qa/ira_distribution.html

How do I withdraw funds from my IRA?

To request a distribution form your IRA, simply do the following:

BUYandHOLD Division of Freedom Investments, Inc.
Attn: IRA Department
375 Raritan Center Parkway
Edison, New Jersey 08837

How will the funds be paid to me?

On the distribution form you have three options to choose from. You can have a check issued to you at the address on your account. You can request for the funds to be transferred to a BUYandHOLD Individual account or a Joint account. Finally, you can select to have the funds sent to your bank account, as long as you attach a copy of a voided check to the distribution form.

Are Federal taxes withheld when I request a distribution?

Yes. At your request, BUYandHOLD can withhold money for Federal taxes.

Generally, IRA distributions are included in taxable income, and the IRS is concerned that the proper income tax is paid on these distributions. So, as of January 1, 1983, federal tax withholding requirements applied to IRA distributions.

Because of this, all IRA custodians (BUYandHOLD for example) must offer IRA holders the opportunity to have taxes withheld at the time of distribution, similar to an employer?s withholding from a paycheck. This is a prepayment of taxes at the time of the distribution. If, at the time of tax filing, the individual has had more income tax withheld than their liability requires, they will receive a refund. If the individual?s liability exceeds the amount that they had withheld over the course of the year, they will owe additional taxes at filing time.

You choose your withholding option when you complete the distribution form. If you choose taxes to be withheld, BUYandHOLD will subtract the amount you request to be withheld from the total amount of the payment you request. Therefore, if you request $100 with 10% federal withholding, you will receive a check for $90.

BUYandHOLD will send the money withheld to the government with the appropriate reporting documentation.

The IRA holder will see the money withheld on the Tax Form 1099R that they will receive at the beginning of February, which is to be attached to their tax return.

What is a recharacterization?

Recharacterization is the term the IRS has given to the process of undoing a Roth conversion, or switching a Roth annual contribution to a Traditional IRA or vice versa. There are several reasons to request a recharacterization:

Failed conversion - you realize that you are not eligible for a conversion to a Roth IRA and need to "undo" it

Successful but unwanted conversion - you are eligible for the conversion, but you decide you don't have the money to pay taxes on it, so you choose to "undo" it

Annual contribution to a Traditional IRA - you made a contribution to a Traditional IRA, but realize you want it to be a contribution to a Roth IRA

Annual contribution to a Roth IRA - you made a Roth contribution, but now realize your income is too high, or that a Traditional contribution is better for your situation

Can I convert my Traditional IRA to a Roth IRA?

Yes. You can convert your Traditional IRA to a Roth IRA if your adjusted gross income (single or married filing a joint return) does not exceed $100,000 in the year of conversion. If you are married filing a separate return, you are not eligible to convert.

Is a conversion taxable?

Yes. When you convert a Traditional IRA to a Roth IRA, all of your deductible contributions plus the earnings become taxable to you. In other words, any contributions you have not paid taxes on previously, you must pay taxes on as a part of the conversion process. The amount you convert is not counted for the $100,000 income limit established for Roth IRAs, but is included as income for all other purposes. Unlike in a Traditional IRA when you take money out before the age of 59 ? and must pay a penalty, when you covert a Traditional IRA to a Roth IRA before age 59 ? there is no 10% penalty due on the taxable portion of the conversion.

Are there rules to follow in requesting a recharacterization?

Things to keep in mind when recharacterizing contributions:

If the contribution is moving from the Traditional IRA to the Roth IRA, no tax deduction can be taken

The contribution plus any earnings on the contribution must be moved

The recharacterization must be completed by your tax return due date, including extensions

What happens if I convert my Traditional IRA and then realize that I am ineligible to convert?

You can recharacterize the conversion assets back to a Traditional IRA if you do so by your tax filing deadline, including extensions. Please read all of the FAQ's in this section for more on recharacterization.

How can I request a Conversion or Recharacterization at BUYandHOLD?

In order to request a Conversion or Recharacterization, simply do the following:

BUYandHOLD Division of Freedom Investments, Inc.
Attn: IRA Department
375 Raritan Center Parkway
Edison, New Jersey 08837

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