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Investing FAQs
What is a Rollover IRA?
A Rollover IRA is a type of account which allows you to defer the payment of taxes attributable to a distribution from a qualified retirement plan.
How does a Rollover IRA differ from a Traditional IRA?
The main difference is in the size of the allowable contribution. The most you can contribute to a Traditional IRA is $3,000 per year ($3,500 for individuals or each joint filer age 50 and over).

With a rollover IRA, though, there is no maximum amount. You can rollover whatever pre-tax amount you receive from your employer's plan - whether it's $2,000, $200,000 or $2,000,000. And a rollover IRA offers the same tax advantages as a Traditional IRA.
Are IRA rollovers limited to retirees?
No. Anytime you receive an eligible rollover distribution from your employer's retirement plan, you can roll over that distribution to an IRA. So, if you leave your present employer for a new job, if your employer's plan terminates, or if you become disabled, you can take advantage of the IRA rollover.
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What is an eligible rollover distribution?
An eligible rollover distribution is, generally, any retirement plan distribution that is not one of a series of periodic payments (paid at least annually). Also, any minimum required distribution generally payable after age 70½ is not eligible for rollover. Likewise, any distributions of after-tax dollars you contributed to the plan cannot be rolled over.
What are the advantages of a rollover IRA?
Tax deferral is probably the biggest advantage. When you receive an eligible rollover distribution from your employer's qualified retirement plan, you have a choice. You can either pay tax immediately on the distribution, or you can defer paying tax by rolling the distribution over into an IRA (or another eligible rollover plan). If you choose the IRA rollover, you can postpone paying tax until distributions begin. And you don't have to start receiving payments from your IRA until April 1 of the year after you reach age 70½.

In addition, when you use the IRA rollover, the income generated by investing your eligible rollover distribution will also continue to grow on a tax-deferred basis. So, for example, if you have a $250,000 distribution that grows at an annual rate of 6%, you can accumulate an additional $84,566 over a five-year period.

Also, if you are under age 59½, by using the IRA rollover you avoid the 10% early withdrawal penalty you would otherwise have to pay
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Can I withdraw funds from my IRA before I turn 70½?
Yes. Once you reach age 59½, you can generally withdraw funds without penalty from your IRA. However, your withdrawals will be subject to income tax.

If you receive a distribution from your employer's retirement plan before age 59½, you basically have two choices:

You can pay tax on the distribution plus a 10% penalty — potentially 49% or more.


You can roll over the entire amount into an IRA (or other employer's plan that accepts rollovers) and defer taxes until you begin withdrawals at a later date.

What are the possible disadvantages?
If you are age 59½ or older, using a rollover IRA might mean giving up other tax-planning opportunities, such as forward averaging. With forward averaging, taxes on your lump-sum distribution are calculated as though the distribution were received over a number of years, instead of all in one year. Generally, forward averaging is available to those who were participants in their company's retirement plan for at least five years. Depending on your age, you may be eligible for either five or ten-year averaging. In most cases, forward averaging is available only once during your lifetime, and ten-year averaging may be available only if you were born before 1936. If you expect to receive more than one qualifying distribution during your working career, you should save your forward-averaging election for the most opportune time.

Finally, keep in mind that if you use the rollover IRA to defer tax payment, tax will eventually be due when you begin receiving distributions from your IRA.
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What is the best way to roll over my retirement funds to an IRA?
For most people, the best way is to transfer your funds directly into an IRA. Since January 1, 1993, any distribution from a qualified retirement plan [such as a pension, profit sharing, or 401(k) is subject to immediate 20% federal tax withholding unless directly transferred to another qualified retirement plan or IRA.
Must I roll over my entire distribution in order to secure an IRA's tax advantages?
No. You may make a partial rollover. The amount you roll over into your IRA will be entitled to the same tax-deferring and tax-sheltering advantages we have already discussed.

Any taxable portion of your distribution that you retain, however, will be subject to the 20% withholding mentioned above (plus the 10% early withdrawal penalty, if applicable) and must be included in your income in the year of distribution. Moreover, tax on this retained portion cannot be computed using forward averaging or any other special tax treatment. Accordingly, you should carefully consider a partial rollover.

By directly rolling over your eligible distribution, you can avoid this 20% withholding altogether. And 390 of your eligible rollover distribution will continue to grow on a tax-deferred basis.

A rollover IRA affords advantages if you are about to retire or if you are about to receive a retirement plan distribution or leave your present job. And the special advantages afforded by SunTrust's rollover IRAs — flexibility, wide selection of investment options, and simplicity — may make the rollover option even more attractive.
Can I roll over my distributions into IRAs with different institutions?
Yes. You may have as many separate IRAs as you like.
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Can I make my annual $3,000/$3,500 contribution to my Rollover IRA?
Yes. As long as you are under age 70½ and have earned income of at least $3,000/$3,500, you may make your annual contributions to your rollover IRA.
Can I combine my "annual contribution" IRA with my rollover IRA?
Yes. Your contributory IRAs can be combined with your rollover IRAs. A word of caution: If you intend to participate in another qualified plan, it makes sense to keep different types of qualified plan rollovers separate from "annual contribution" IRAs and from each other.
How much investment flexibility do I have with a rollover IRA?
When you establish a rollover IRA with SunTrust, you can choose from among several investment alternatives. You can choose a "self-directed" IRA if you prefer to make your own investment decisions. Or SunTrust can invest your retirement funds for you in accordance with your financial goals and objectives. Many people prefer this choice because of the freedom it affords them during retirement.
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Can I invest my rollover IRA assets in anything I want?
You are not allowed to invest the assets of your IRA in "collectibles" (art works, coins, stamps, gems, etc.) and life insurance. (Certain gold and silver coins issued by the United States are excepted from this rule.) Investing your IRA's assets in the mortgages or loans to family members can disqualify your account.
What advantages do I gain by using the investment management professionals at SunTrust?
You enjoy the peace of mind that comes from knowing that your retirement assets are being handled by a team of experienced professionals. They take the time to understand your investment objectives, your tolerance for investment risk, and the time frame you have available for your investments. Only when they understand your investment needs and objectives will they develop an appropriate individual investment portfolio for you.

Our careful, disciplined approach to investment management has earned our clients demonstrably superior investment returns over the long term. What's more, we regularly review your portfolio to ensure that it continues to meet stated objectives. Of course, you can get information about your investments or any other aspect of your IRA at any time by calling your SunTrust account manager.
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Does a SunTrust rollover IRA offer any other advantages?
SunTrust has the resources that only an organization with experienced investment professionals can offer. Moreover, we are on the job full time — an important consideration if you simply don't want to assume the responsibility for investing your assets at this stage in your life. In addition, our rollover IRAs are easy to implement and simple to maintain. Once your IRA is funded, we provide periodic statements concerning the account and file any necessary forms with the government. Certain information concerning the IRA will have to be included on your tax return, but that's about it.
More questions?
How do I open an account?
Open an account by contacting one of our SunTrust investment consultants at 800.874.4770 Option 3. Or you may request a new account kit and complete and return the account application.
What is the minimum investment amount?
For most accounts there is no minimum investment. Margin accounts must have a minimum deposit of $2,000.
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How do I transfer my account to SunTrust Investment Services?
After you establish your account, your investment consultant can provide you with an automated customer account transfer form. You simply complete this form, attach a copy of your most recent statement, and your account will be transferred automatically.
What type of research is available?
SunTrust Investment Services is pleased to offer Standard and Poor's Stock Reports. Standard and Poor's is an industry leader in providing independent and insightful research to customers throughout the world.
How do I contact SunTrust Investment Services?
To speak directly with a SunTrust Investment Services representative, call
800.874.4770 Option 3.
For customer service, call us at 800.874.4770.
Where can I find information about trading terms?
Use the online Trading Glossary.

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