Series 62

AAA

Retirement Plans - IRA Contributions, Accounts And Investments

IRA Contributions

Contributions to IRA’s must be made by April 15th of the following calendar year, regardless of whether or not an extension has been filed by the taxpayer. Contributions may be made between January 1 and April 15 for the previous year, the current year or both. All IRA contributions must be made in cash.

IRA Accounts

All IRA accounts are held in the name of the custodian for the benefit of the account holder. Traditional custodians include banks, broker dealers, and mutual fund companies.

IRA Investments

Individuals who establish IRA’s have a wide variety of investments to choose from when deciding how to invest the funds. Investors should always choose investments that fit their investment objectives. The following is a comparison of allowable and non- allowable investments:

Allowable

Non-Allowable
Stocks Margin Accounts
Bonds Short sales
Mutual Funds Tangibles / Collectibles / Art
ETF / ETNs Speculative option trading
Annuities Term life insurance
UITs Rare coins
Limited Partnerships Real estate
US minted coins  

It is Not Wise To Put A Municipal Bond In an IRA

Municipal bonds or municipal bond funds should never be placed in an IRA, because the advantage of those investments is that the interest income is free from federal taxes. Because their interest is free from federal taxes, the interest rate that is offered will be less than the rates offered by other alternatives. The advantage of an IRA is that money is allowed to grow tax deferred, therefore an individual would be better off with a higher yielding taxable bond of the same quality.

 

How to Pass the Series 62 Exam

Rollover Vs. Transfer
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