Required minimum distributions (RMDs) FAQs ❯ What to know about required minimum distributions (RMDs). Learn more. Qualified employer-sponsored retirement plan (QRP) distribution options ❯ Are you considering the various options for your savings in your qualified employer sponsored retirement plan (QRP)? Learn more. Why invest in an IRA? IRAs allow you to save for retirement and potentially take advantage of tax benefits. Depending on which IRA you choose, your tax benefits could include: Tax-deferred accumulation Contribution deduction Tax-free distributions See below to learn more about your IRA choices, eligibility, contribution limits and more. See below to learn more about your IRA choices, eligibility, contribution limits and more. You need to make your Traditional and Roth IRA contributions by the individual tax-filing deadline. Total annual contributions to a Traditional IRA, Roth IRA, or both cannot be more than the annual maximum for your age or 100% of earned income, whichever is less. 2026 tax year maximum annual contribution: $7,500 if you're younger than age 50 $8,600 if you're age 50 or older by the end of the tax year (includes a $1,100 catch-up contribution) 2025 tax year maximum annual contribution: $7,000 if you’re younger than 50 $8,000 if you’re 50 or older within a particular tax year Open the Traditional IRA section (below) for information on the deductibility of your contribution and the Roth IRA section (below) for information on contribution limits. Consider maximizing your IRA contribution to potentially gain the full benefit of tax-advantaged savings and increase your retirement assets. At Wells Fargo Advisors, you can make contributions to your IRA online or using your mobile device 1 . A contribution received between January 1 and the tax-filing deadline must indicate whether it is for the current year or prior tax year. If no year is indicated, it is considered a current-year contribution. A Traditional IRA offers tax-deferred growth potential. You pay no taxes on any investment earnings until you withdraw, or “distribute,” the money from your account, presumably in retirement. 2 You can contribute to a Traditional IRA regardless of your age, as long as you, or your spouse, if filing jointly, have earned income, but your contribution may not be fully deductible. Your ability to deduct contributions generally depends on your participation in a workplace retirement plan (WRP) 3 and your income. If you and your spouse, are not covered 4 by a WRP, you can fully deduct the amount of the Traditional IRA contribution you are eligible to make. If you are covered 4 by a WRP, deductions are phased out based upon Modified Adjusted Gross Income (MAGI) limits below: A Roth IRA offers tax-free growth potential. You are eligible to contribute to a Roth IRA at any age as long as you, or your spouse, if filing jointly, have earned income and your modified adjusted gross income (MAGI) is at or below the phase-out limits shown below. Roth IRA contribution phase out limits: Since contributions to a Roth IRA are made with after-tax dollars, there is no tax deduction, regardless of your income. Qualified distributions, which are tax-free and not included in gross income, occur when your account has been open for more than five years and any one of the following applies 2 : You are at least age 59½. You are disabled. You are using the first-time homebuyer exception. The distribution is made to your beneficiary after your death. You do not have to take required minimum distributions (RMDs) from a Roth IRA during your lifetime, optimizing the opportunity to build tax-free wealth. If your employer offers a SIMPLE IRA or SEP IRA retirement plan and you want to take advantage of it, you need to open a SIMPLE IRA or SEP IRA to hold your plan assets. 2 A SIMPLE IRA plan lets eligible employees make salary deferral contributions to their SIMPLE IRA on a pre-tax basis. In addition, the employer must make either matching or non-elective contributions. A SEP plan lets an employer make deductible contributions for eligible employees to SEP IRAs that plan participants have established. Traditional, SEP, and SIMPLE IRA owners begin taking RMDs by your Required Beginning Date (RBD), which is generally April 1 following the year you turn age 73 or age 75 depending on date of birth. The first RMD generally may be delayed until April 1 of the following year. Different rules may apply to individuals who reached an earlier required beginning age under prior law. RMDs for later years generally must be taken by December 31. Are you considering the various options for the savings you have accumulated in QRPs such as 401(k), 403(b), or governmental 457(b) plans? Know that what you choose to do with these savings can have a substantial impact on your future. You generally have four options for your QRP distribution: Roll the assets in to an IRA Leave the assets in your former employer’s QRP, if the plan allows

Move the assets to your new/existing employer’s QRP, if the plan allows Take your money out and pay the associated taxes Each of these options has advantages and disadvantages, and the one that is best depends on your individual circumstances. You should consider features such as investment choices, fees and expenses, and services offered 6 . It can be a confusing decision to make. Here are some things to think about: The difference in fees and expenses between the QRP and IRA When distributions can be taken with no 10% additional tax Your need for help making investment decisions The favorable tax treatment of employer securities that may have increased in value in the QRP When you have to begin required minimum distributions (RMDs) Protection of retirement assets from creditors and bankruptcy Your Financial Advisor can help educate you regarding your choices so you can decide which one makes the most sense for your specific situation. Speak with your current retirement plan administrator and tax professional before taking any action. There are a variety of reasons why you may want to convert a Traditional, SEP or SIMPLE 7 IRA as well as your qualified employer-sponsored retirement plan (QRP), such as a 401(k), savings to a Roth IRA. Some reasons conversions may be appropriate include: You are willing to pay taxes now for the possibility of tax-free distributions in retirement You do not have to take required minimum distributions (RMDs) during your lifetime The state you live in does not have income tax but will retire to a state with income tax Some reasons a conversion may not be appropriate include: Having to deplete other assets to pay the taxes due on the conversion The conversion pushes you into a higher tax bracket You will be in a lower tax bracket in retirement To convert, you will pay federal and, possibly, state income tax on the taxable amount of the conversion. There is no 10% additional tax on conversions made prior to age 59½. However, any amount used to pay the taxes, and not converted, is taxable and if you are under age 59½ you may owe the 10% additional tax. Also, you will not have to sell the account assets as they can be converted as an “in kind” transfer. It is important to know what your tax situation is and your ability to pay for the conversion because once you convert you cannot recharacterize or undo the conversion. Be sure to speak with your tax professional before completing a Roth IRA conversion. You or your spouse, if filing jointly, must have earned income for the tax year for which you are making the contribution. Generally, compensation is what you earn from working such as wages, tips, or commissions. See Publication 590-A (PDF) for a comprehensive list of what is considered earned income. IRA Disclosure Statement and Custodial Agreement: The Disclosure Statement and Custodial Agreement is designed to provide you with an overview of an IRA including tax benefits and considerations, as well as contribution and distribution rules. The first part of each document includes the disclosure statement required by the Internal Revenue Service. The disclosures will explain the basic rules and tax considerations you should understand if you adopt an IRA. The second part of the document includes the Custodial Agreement. Click here to view the documents. 1 Brokerage IRAs with Brokerage Cash Services are eligible for this feature. Online access is required. Talk to your Financial Advisor for more information about the benefits of Brokerage Cash Services. 2 Traditional IRA distributions are generally taxed as ordinary income. Qualified Roth IRA distributions are tax-free provided a Roth account has been open for more than five years and the owner is at least age 59½, or as a result of their death, disability, or using the first-time homebuyer exception. Qualified Roth IRA distributions are not subject to state and local taxation in most states. Distributions from Traditional and Roth IRAs may be subject to an IRS 10% additional tax for early or pre-59½ distributions. For SIMPLE IRAs, withdrawals are subject to ordinary income tax and may be subject to an IRS 10% additional tax for early or pre-59½ distributions. The additional tax increases to 25% if taken during the first two years of plan membership. 3 Workplace retirement plans include 401(k), 403(b), SEP and SIMPLE IRA. 4 The “Retirement Plan” box in Box 13 of your W-2 tax form should be checked if you were covered by a retirement plan at work. 5 Your filing status is considered single for IRA contribution purposes if you did not live with your spouse during the tax year. Read IRS Publication 501 for more information https://www.irs.gov/pub/irs-pdf/p501.pdf 6 Please keep in mind that rolling over assets to an IRA is just one of multiple options for your retirement plan. Each of the following options is different and may have distinct advantages and disadvantages. Roll assets to an IRA Leave assets in your former employer’s plan, if plan allows Move assets to your new/existing employer’s plan, if plan allows Cash out or take a lump sum distribution When considering rolling over assets from an employer plan to an IRA, factors that should be considered and compared between the employer plan and the IRA include fees and expenses, services offered, investment options, when distributions are no longer subject to the 10% additional tax, treatment of employer stock, when required minimum distributions begin and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with employer-sponsored retirement plans. You should consult with the plan administrator and a professional tax advisor before making any decisions regarding your retirement assets. 7 Can only be converted after two years from first SIMPLE IRA deposit. 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