Retirement brochure

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Traditional IRA Withdrawal Options

Knowing when and how to access your Traditional IRA savings

Accessing your Traditional IRA account

This brochure describes the ways you can choose to receive income from your Traditional IRA. The withdrawal rules for a Roth IRA are different from a Traditional IRA. If you have a Roth IRA, please refer to the brochure, Roth IRA Withdrawal Options.

When can I access my Traditional IRA?

You may begin withdrawing from a Traditional IRA without penalties at age 59½.

When are penalty-free distributions available from my Traditional IRA?

IRAs were created to provide tax-deferred retirement savings for individuals. The IRS assesses a 10% penalty tax on early withdrawals from your Traditional IRA.

You can withdraw from your Traditional IRA prior to age 59½ without early withdrawal penalties for the following purposes:

• Unreimbursed medical expenses that exceed a certain percentage 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.
• Federal tax levy.
• Equal periodic payments taken over the course of your life expectancy.
• You are disabled.
• You are the beneficiary of a deceased Traditional IRA owner.
• Health insurance premiums while unemployed if receiving unemployment compensation.

Is income from my Traditional IRA taxable?

Distributions from your Traditional IRA are considered ordinary income and are subject to federal and state income tax. Taxable distributions may also be subject to early withdrawal penalties.

We will send you Form 1099R summarizing your distribution activity, which you should use when preparing your income tax returns.

If you have any nondeductible contributions or other nontaxable amounts in your Traditional IRA, use IRS Form 8606 to assist you in calculating the taxable portion of your Traditional IRA distribution.

Please remember that the taxable portion of your distribution is taxed as ordinary income for the year in which you withdraw it. Withdrawals using these options may be subject to 10% federal income tax withholding unless you elect no withholding. The money can be sent to you as a check or electronically deposited in your checking or savings account.

Here are the ways you can receive income from your account:

1. Scheduled Payment Option: You may elect to receive a fixed dollar amount monthly, quarterly, semiannually, or annually. The length of time these distributions continue (unless you stop or change them) may vary according to the performance of your investment options.
2. Partial Withdrawal: $500 minimum per withdrawal.
3. Total Withdrawal: You may withdraw your entire account balance at once.
4. Declining Balance Withdrawal: You can choose to have your account balance paid to you over a specific period of time.

When must I begin taking distributions from my IRA?

You are legally required to begin withdrawing from your Traditional IRA by April 1 following the year in which you turn age 70½ or you will be subject to a penalty equal to 50% of the amount that you should have withdrawn. We will contact you annually with a reminder to satisfy requirement.

What happens in the event of my death?

When we are notified of an account holder’s death, we will provide information to the beneficiary(ies) regarding distribution options available to them. We will administer separate accounts for each beneficiary if they desire to keep the account with us. Each beneficiary will be allowed to independently select his or her withdrawal options.

For more information about your retirement income options, please contact us at 1-800-279-4030.

IRA 3197-292-0417 (W)

Effective April 2017. Policies and programs described are subject to change at any time.