IRA owners may be required to to withdraw funds beginning at age 73, and every year thereafter.  Determining your Required Minimum Distribution (RMD) is significant while retaining an IRA, considering both your life expectancy and the IRA's fair market value.

The required amount for each eligible person is based on the December 31 IRA account value of the previous year and the IRA owners date of birth.  Your spouse's date of birth may also be a factor if your spouse is at least 10 years younger than you.  Interactive Brokers LLC provides several information resources to understand and calculate your RMD, including access to the online FINRA RMD Calculator.

January RMD Notification

Beginning RMD Distributions

Requesting Your RMD Withdrawal

Calculating Your RMD 

January RMD Notification

The Internal Revenue Service (IRS) requires the IRA plan custodian to notify IRA owners about the RMD requirements by January 31 each year.  If you turn 73 this year, you are required to begin taking RMDs before April 1 of the following year.

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Beginning RMD Distributions

Eligible IRA owners must begin receiving withdrawals by December 31 of the year they reach age 73.  The first RMD withdrawal, however, may be delayed until April 1 of the following year.  

If you elect to delay the withdrawal, then please observe the following considerations:  

(1) Two RMD withdrawals will be required the following year, the undistributed initial RMD and the new RMD. 

(2) The new RMD will be slightly larger due to the December 31 market value's inclusion of the undistributed initial RMD.

Subsequent RMD withdrawals from your IRA must be distributed by December 31 to avoid a penalty tax.

Note:  Roth IRAs are exempt from the RMD rules during the IRA owner's lifetime.

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Requesting Your RMD Withdrawal

You may request a withdrawal of funds through the Transfer & Pay and then Transfer Funds menu options within Client Portal.  The IRS deadline for taking RMDs is December 31 each year.  Keep in mind that the year end withdrawal cut off for processing withdrawals from your Interactive Brokers account may occur before December 31.

Please note that you can elect to transfer your funds to your bank account or to an Interactive Brokers non-IRA account. To transfer funds to an Interactive Brokers non-IRA account, log into Client Portal, select Transfer & Pay, Transfer Funds then select Transfer Funds Between Accounts.

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Calculating Your RMD

Your RMD is determined by dividing the account balance on December 31 of last year by your life expectancy factor.  Your life expectancy factor is taken from the Life Expectancy Tables contained in IRS Publication 590.  Your IRA beneficiary election may play an important role in determining your RMD, as well.

You must calculate your RMD separately for each qualifying IRA custodied at Interactive Brokers and any other financial institution.  The RMD, however, may be satisfied from any single one or combination of your IRAs. The IRA Required Minimum Distribution Worksheets may provide additional assistance with the calculation of your RMD.  

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Click here to return to the Retirement Account Resource page.

Disclaimer:  IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.

This information is for general educational purposes only.  Individuals should consult with their financial adviser or legal counsel to determine how rollover regulations affect their unique situations.

Generally, an IRA rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan.  The contribution to the second retirement plan is called a rollover contribution.

This article outlines the types of IRA rollover transactions, rules and conditions, IB's Rollover Certification form, and rollover transaction details.  Select from list below for details:

Rules & Conditions

Rollover Certification

Eligible Rollover Transactions

Ineligible Transactions

Rules & Conditions

Prior to completing an IRA Rollover transaction, we recommend that you review the rules and conditions surrounding eligibility.  Interactive Brokers can accept as a tax-free transaction an eligible rollover distribution as defined under the Internal Revenue Code.  Included in this article is information about eligible transactions, as well as the Interactive Brokers  IRA Rollover Certification form.

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IRA Rollover Certification

Before accepting an IRA rollover transaction into an Interactive Brokers LLC IRA, we require that you review your eligibility for the rollover and certify your understanding of the rollover rules and conditions.  The IRA Rollover Form includes the IRA Rollover Certification. 

The Transfer Funds page within the Client Portal lets you notify IB of an IRA Rollover deposit of funds into your account. From the Transfer & Pay menu select Transfer Funds and then Make a Deposit.  Select one of the saved deposit instructions and follow the prompts on the screen or create a new deposit instruction by selecting the Currency of the deposit from the drop-down menu. Click Connect or Get Instructions for the method you will use to transfer funds. And finally follow the remaining instructions provided to initiate the transfer with your bank.

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Rollover Transactions

Two types of IRA rollover transactions exist with different guidelines and delivery methods:

1. Direct Rollover - a transfer of assets from an employer-sponsored retirement plan directly to an eligible IRA.  If you choose to receive the distribution first, then you may roll over the funds to the IRA within 60 days.
2. Indirect Rollover - a distribution from an IRA paid to you, followed by a rollover into another IRA within 60 days.  The IRS allows an indirect rollover of each IRA's funds once during a twelve-month period.

(Note:  A distributions directly from one IRA trustee to another IRA trustee is a Trustee-to-Trustee transfer.  It is not affected by the twelve-month waiting period.)

For additional information about rollovers, visit Understanding Rollovers.  See also IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) for more specific guidelines on moving retirement plan assets.

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Eligible Rollover Transactions

Almost any distribution from a qualified plan can be rolled over to an IRA.  Your retirement account may be eligible for one of the following eligible rollover transactions.

Traditional IRA or SIMPLE IRA to Traditional IRA Rollover

• Funds or property deposited less than 60 days of receipt by the IRA owner from the previous IRA
• During the preceding 12 months, no other distributions from the distributing IRA were rolled over
• The assets involved in the transaction have not been rolled over in the past 12 months
• Required Minimum Distribution satisfied (if over 73)
• For SIMPLE IRAs, after two years from the first contribution

Roth IRA to Roth IRA Rollover

• Funds or property deposited less than 60 days of receipt by the IRA owner from the previous IRA
• During the preceding 12 months, no other distributions from the distributing IRA were rolled over
• The assets involved in the transaction have not been rolled over in the past 12 months

Rollover or Direct Rollover from Qualified Plan into a Traditional IRA

• Eligible participant (participant, spouse beneficiary, or former spouse due to divorce)
• Funds or property deposited less than 60 days of receipt by the participant from the previous plan
• Funds received from an eligible qualified retirement plan
• Required Minimum Distribution satisfied (if over 73)
• Consists of funds, property, or proceeds from the sale of property distributed from the qualified plan
• All of the funds are eligible to be rolled over

Roth IRA to Roth IRA Rollover

• Funds or property deposited less than 60 days of receipt by the IRA owner from the previous IRA
• Required Minimum Distribution satisfied (if over 73)

Ineligible Rollover Transactions

Some funds distributed from a retirement plan are not eligible for rollover into an IRA.  The following transactions are not eligible rollover transactions.

• Any portion of a distribution from a retirement plan not rolled over
• Required Minimum Distributions
• Distribution of excess contributions and related earnings
• Retirement plan loan treated as a distribution
• Hardship distributions
• Distributions part of substantially equal payments (73-t)
• Dividends on employer securities
• Non-spousal death benefit distributions
• The cost of life insurance coverage

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Click here to return to the Retirement Account Resource page.

Disclaimer:  IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.

ACATS Transfer Guide

Introduction

ACATS Transfer Benefits

Navigating The Process

Incoming Or Outgoing

Initiating Your Transfer

What To Expect

Who To Contact For Help

Introduction

Understanding the basic facts about transferring accounts between US brokerage firms can be help to avoid delays.  Through this article and other Knowledge Database resources, Interactive Brokers seeks to assist with your incoming and outgoing ACATS requests.

US brokerage firms utilize a standardized system to transfer customer accounts from one firm to another.  Known as the Automated Customer Account Transfer Service or ACATS, the process allows assets to move seamlessly between  brokerage firms in a unified time frame.   ACATS transfers are facilitated by a third party, the National Securities Clearing Corporation (NSCC), to assist participating members with timely asset transfers.

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ACATS Transfer Benefits

The majority of assets may be transferred between US brokerage firms and some banks through ACATS.  This standardized system includes stocks, US corporate bonds, listed options, unit investment trusts, mutual funds, and cash.  Information on assets eligible for transfer is provided at "Assets Eligible..."  Though impacted by multiple factors and time constraints, the accepted or rejected transfers finalize within 10 business days in most cases.

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Navigating The Process

4 simple steps of the ACATS process will help you understand the flow and minimize delays.  Familiarizing yourself with the transfer process helps to ensure a successful transition.

1.  Incoming or Outgoing

2.  Initiating Your Transfer

3.  What to Expect

4.  Who to Contact For Help 

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 1. Incoming or Outgoing

Incoming ACATS Transfers

The financial institution that is receiving your assets and account transfer is known as the "receiving firm."  Investors always work with and through the "receiving firm" to move full or partial account assets into a new broker. 

Contact the "receiving firm" (Interactive Brokers) to review the firm's trading policies and requirements.  You should verify that your assets are eligible for trading at the "receiving firm" before initiating the transfer request.   Not all ACATS transferable assets are acceptable for trading at every brokerage firm.

Outgoing ACATS Transfers

All outgoing ACATS transfers, full or partial, must be approved by the "delivering firm."  Investors, however, should work with and through the "receiving firm" in order to begin the the transfer process or to status the progress of the request.      

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2. Initiating Your Transfer

Investors must always begin the ACATS transfer with the "receiving firm."  An ACATS transfer form or Transfer Initiation Form (TIF) must be submitted.  The "receiving firm" takes your reqeust and communicates with the "delivering firm" via ACATS.  The process begins with this request for transfer of the account. 

For your Interactive Brokers Account, the transfer is usually submitted online.  Video instruction on submitting the transfer is provided at "How to deposit funds via a full ACATS/ATON Transfer."  or through Step-by-step instructions.

Note: Outgoing account transfers from your IB account should be directed to the other broker.  Your request will be submitted to IB from the other broker through the ACATS electronically.

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3. What to Expect

Your Account

Brokers ensure the safety and security of transfer requests by only authorizing requests between open accounts that meet the following criteria:

• Same Account Title
• Same Tax ID Number
• Same Account Type

Transfer Approval

Ultimately responsible for validating the transfer,  the "delivering firm" may accept  information from the "receiving firm" correcting data originally entered.  Approved or validated requests result in the delivery of positions to the "receiving firm" for their acceptance.   Assets may not be accepted by the "receiving firm" for the following:

• Non-marginable or Margin (credit) violation
• Not Tradable
• DTC Chill

Note: The most common reasons for ACATS rejections are outlined by clicking here.

Processing Time-frame

The processing time for each transfer request is fixed.  In general, approved transfers complete within 4 to 8 business days.  Almost all transfers complete within 10 business days.  Each firm is required to perform certain steps at specific intervals in the process.  Feel free to review the Full ACATS transfer process flow.

Fees

While Interactive Brokers does not charge a fee to transfer your account via ACATS, some brokers do apply a fee for full and partial transfers. Prior to initiating your transfer, you should contact the "delivering firm" to verify any charge.

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4.  Who To Contact For Help

Interactive Brokers Customer Service stands poised to assist with your incoming ACATS transfer reqeust.  Click here for Customer Service contact resources.

Note:  Outgoing or ACATS transfers sending accounts to another broker should be directed to the "receiving firm."  Their Account Transfer Group will work with Interactive Brokers directly to complete your outgoing request.

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Forms 1099-R and 5498 are available by January 31 and May 31, respectively.

IRS Circular 230 Notice: The information contained in this FAQ is provided for information purposes only, is not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations and does not resolve any tax issues in your favor. Refer to IRS Publication 590, Individual Retirement Accounts for additional information on IRAs in general and consult your tax advisor about your individual tax situation.