What types of Retirement Accounts does Firstrade provide?

Firstrade offers the following Retirement Accounts:

  • IRA (Traditional & Roth)
  • Rollover IRA
  What is an IRA account?

IRA stands for Individual Retirement Arrangement, and it is a retirement plan that allows you to contribute up to certain amount annually to a retirement account offering tax benefits.

  How do I transfer my existing IRA to Firstrade?

If you are transferring from another firm, you will need to request a transfer form. The transfer form must be completed and returned to Firstrade along with a copy of your most recent statement from the firm you are transferring. You may print and complete this form from our Form Center. The transfer normally takes 10 to 15 business days to complete from the time we receive your completed transfer form.

  What is the ACAT transfer fee?

If you are transferring an IRA account to Firstrade via ACAT, the sender firm will charge you its specified transfer fee.

If you would like to transfer assets from Firstrade to another financial institution via ACAT, Apex Clearing will charge a partial transfer fee of $55 or a full account transfer fee of $75.

  Can I roll over a previous employer's retirement plan such as 401(k) to Firstrade?

Here are the steps to rollover a 401K:

Step 1: Open a similar account type if you don't have the IRA account with us yet:

  • For a pre-tax plan, please open a Traditional or Rollover IRA account
  • For an after-tax plan, please open a Roth IRA account

Step 2: Contact your plan provider and fill out their distribution form or initiate the process online. You may then request the transfer of your current retirement account funds using the following methods:

By Check/Direct Rollover:
Request to have a check issued and made payable to "Firstrade Securities, Inc., FBO [YOUR NAME], [YOUR ACCOUNT NUMBER]"

Mailing address:
Firstrade Securities Inc.
30-50 Whitestone Expressway,Suite A301
Flushing, NY 11354

By Wire / Direct Rollover:

  1. Request to have the funds wired into your Firstrade account
  2. Complete the IRA deposit slip/Adjustment form and upload it online (login to your account, go to: Service > Form Center > Upload Document) or email a copy to service@firstrade.com

By Indirect Rollover:

  1. Request that the plan provider send you a check made payable to you.
  2. After the check is cleared in your bank account, you can fund your IRA account with your personal check. Have a check made out to "Firstrade Securities, Inc” and add Your NAME, [YOUR ACCOUNT NUMBER] on the memo line. Mail the check to the Firstrade along with the 401K administrator letter/plan statement.

    Mailing address:
    Firstrade Securities Inc.
    30-50 Whitestone Expressway, Suite A301
    Flushing, NY 11354

    *Please note that the check amount should match the distribution amount from the plan administrator letter. Depending on your previous employer-sponsored retirement plan’s administrator, your funds can take anywhere from 5 to 20 business days to be deposited into your Firstrade IRA account.
  What types of investments are eligible for my IRA account?

You can invest in stocks, bonds, mutual funds, CDs, and options (covered calls only) just like a regular cash account. However, the use of margin is not allowed for IRA accounts.

  What's the difference between a Traditional and Roth IRA?

The Roth IRA was first introduced in 1998, quickly gaining popularity as the new retirement planning investment vehicle. The main difference between the Roth IRA and the Traditional IRA is that contributions to a Roth IRA are not tax deductible and therefore come from after-tax income. However, the income generated by the Roth IRA is tax-free upon qualified withdrawal. In other words, traditional IRAs offer tax deferral while Roth IRA earnings are tax-exempt.

  Can I convert my Traditional IRA into a Roth IRA? Are there any penalties?

You can easily convert a Traditional IRA into a Roth IRA without any penalties. However, deferred taxes on the Traditional IRA must be paid upon conversion.

  How does the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) affect my IRA contribution?

This law gradually raises the maximum annual IRA contribution based on inflation.

Years Maximum Annual IRA Contribution
2020 $6,000
2021 $6,000
  Can I withdraw from my IRA?

Before the age of 59 1/2, withdrawals from your IRA account would incur a 10% penalty on top of any taxes owed. However, there are several exceptions to be able to withdraw from an IRA without penalty:

  1. The IRA owner's disability according to IRS Code Section 72(m)(7) and IRS Publication 590.
  2. The death of the IRA owner.
  3. As a series of substantially equal periodic payments, made at least annually, to a Traditional IRA owner (inapplicable to Roth IRAs).
  4. Payment of non-reimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI).
  5. Payment of medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks.
  6. Payment of a first-time home purchase (lifetime limit of $10,000).
  7. Payment of qualified higher education expenses for the IRA owner and/or eligible family members.
  8. Paying back taxes from an Internal Revenue Service levy placed against the IRA.
  How is my IRA income taxed?

Income from a Traditional IRA account is taxable as ordinary income, the tax rate depends on your tax bracket.

  I am 70 years old and still working, am I required to start withdrawing from my IRA?

The new law requires IRA owners to start taking distributions from their account by age 72. Failure to withdraw the required amount will result in a penalty of up to 50% of the required withdrawal. One solution is to convert the Traditional IRA into a Roth IRA (after paying taxes on income), which is not subject to mandatory withdrawals.

  Am I able to make an IRA contribution via Fed fund wires?

Yes, Wire deposits for IRA accounts will be coded as Current Year Contribution unless notified. To adjust the year of contribution for wires received from January 1 to April 15 to prior year, please send to service@firstrade.com no later than May 15.

  Why is last year's contribution that was made this year for the SEP-IRA shown on this year's Form 5498 instead of last year's Form 5498?

The IRS requires contributions to a SEP-IRA to be reported on the Form 5498 for the year they are actually deposited to the account, regardless of the year for which they are made.

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