Do you have to add money to the IRA every year will there be fees?

Question

Im 16 years old

Saving for college, and plan on going to open a free IRA at my local bank.

So my question is this...

1) IS it ok when there is a year when someone doesn't put any money into their IRA lets say 4 years that someone puts $0 into their IRa. Because they are busy saving and going to college. Will the Fed accept that or any bank?

2) IS it okay that if someone could transfer their IRA to one bank to another?

Answer 1

You can skip contributions to an IRA, and sometimes you aren't allowed to make them.  You can only contribute from money you earn as wages (1099 or W-2 reported) or reported on your tax return.  If you want to access the money for school, you might have to put your money in a special account, not just an IRA.  You should talk to the bank about the specifics.

If you're concerned about having enough money to retire on, there may be better places you could put your money, if you were willing to leave it alone.  Contact me if you need more info.

Answer 2

You aren't required to contribute to an IRA each year, although that's a good idea if you can afford it.  It's okay to transfer an IRA from one bank to another.  Have the bank where you want the account to be directly contact the bank where the account is.  Don't try to transfer the account yourself because you could create a tax problem.

Answer 3

You do not need to contribute to an IRA every year.  The fees you are charged are determined by the bank or other entity that holds your IRA.  Some accounts have inactivity fees.  Call the place you opened your account and ask them or read the agreement you signed when you opened the account.  If there are inactivity fees they must be disclosed in your agreement.

Answer 4

1) You don't have to put in money every year. You can just let it sit there.

2) Yes, you can transfer the IRA to a new bank, but I advise you to make sure it's a "transfer" not a "withdrawal" or a "rollover".  (When you make a transfer the money goes straight  from the old bank to the new bank. You don't take the money out yourself!)

Some banks charge a fee (usually $20-30) to transfer your account to a new bank. Read the agreement before you open the account. Is it really free? Is there no annual fee? Ask for a list of ALL FEES.