Products & Services
INVESTMENT SERVICES
Continental Investors Services, Inc. maintains a strong municipal and corporate bond trading department. We maintain long-term relationships with major bond houses throughout the country, which provides our Trading Department with a broad base of buying sources.
MUNICIPAL BONDS
Municipal bond expertise and trading capabilities are provided for the large and small investor throughout the United States. Service to the private investor is provided in the general market. Tax exempt revenue and general obligation (GO) bonds are offered as well as portfolio evaluation, tax swap and safekeeping services.
CORPORATE BONDS
We offer corporate bonds specializing in first mortgage electric utilities.
EQUITIES
New York Stock Exchange and over-the-counter transactions are executed through a close relationship with our clearing firm. We also offer liquidation services for restricted stock issued under Rule 144 of the SEC.
Best Execution Policy: All orders are routed through our clearing firm.
MUTUAL FUNDS
What is a mutual fund?
A diversified, professionally managed portfolio of securities that pools the assets of individuals and organizations to invest toward a common objective such as current income or long-term growth. Technically, a mutual fund is a regulated investment company registered under the Investment Company Act of 1940.
How do I get started?
Although it is possible to invest directly with a mutual fund company, it is a good idea to consult with an investment professional to help match your financial needs with the appropriate investment vehicle. An investment consultant can provide many additional services that you may otherwise not receive investing on your own. You may contact a representative of Continental Investors Services, Inc. at (800) 525-0181 or at one of our branch offices.
What mutual funds does Continental Investors Services, Inc. offer?
Continental Investors offers a diversified, professionally managed portfolio of securities that pools the assets of individuals and organizations to invest toward a common objective such as current income or long-term growth. With over 5000 different mutual funds available to investors, Continental Investors Services, Inc. has dealer agreements with most of the major mutual fund families.
The above information is not a solicitation or offer to purchase mutual funds. Mutual funds are offered by prospectus only. For more information on fund charges you may obtain a prospectus from Continental Investors Services, Inc. Read the prospectus carefully before investing any money. Mutual fund values may increase or decrease depending on market conditions.
RETIREMENT
A traditional IRA is a way to save for retirement that gives you tax advantages. Contributions you make to a traditional IRA may be fully or partially deductible, depending on your filing status and income. Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until you take a distribution (withdrawal) from your IRA.
A Roth IRA is a type of individual Retirement Account created by federal legislation. Contributions to a Roth IRA are not tax deductible, but qualifying distributions will be exempt from federal taxation.
See IRS Publication 590-A and Publication 590-B for the details of IRAs.
IRA ROLLOVER & TRANSFER
What is a rollover IRA?
A rollover IRA is an individual retirement account that is created when a distribution from another retirement plan is deposited into an IRA.
What are the benefits of a rollover IRA?
Normally, a distribution from a retirement plan is taxable when it is received. But if that distribution is deposited into a rollover IRA, the funds are not taxable until they are withdrawn from the IRA. In addition, the income earned by the investments in the IRA accumulates on a tax-deferred basis.
Which types of funds are eligible for rollovers?
There are two types of funds which are eligible for rollover treatment. A rollover from one IRA to another IRA. If an individual receives funds from an IRA, they may redeposit any or all of the distribution into another IRA within a 60 day period. These types of rollovers are not allowed more than once in any 12 month period. A rollover from a qualified employer plan to an IRA. If an individual receives an eligible rollover distribution from a qualified retirement plan, they can roll any or all of that amount into an IRA within a 60 day period. This option is available whether the individual receives the funds directly and then makes a deposit into their IRA or whether the funds are directly transferred from the qualified plan to the IRA. However, while the total amount of the retirement plan distribution may be eligible for rollover, if the individual receives the funds directly from the qualified plan the administrator of that plan may be required to withhold 20% of the funds for income taxes.
When do I have to establish my rollover IRA?
Unless you have chosen a direct rollover, you have 60 days from the day you received the funds to roll the amounts over and avoid current taxation. Consequently, your rollover IRA account needs to be set up no later than the end of that 60 day time period.
Can IRA funds be rolled into a qualified retirement plan?
As a general rule, as long as rollover IRA assets have not been commingled with regular assets, a rollover IRA can later be transferred into an employer sponsored retirement plan. Since a non-rollover IRA cannot be rolled into a qualified plan, it may be important to keep the two types of assets separate. Please contact your tax advisor for recommendations on your specific situation.
What is the difference between an IRA rollover and an IRA transfer?
A transfer of an IRA is the direct transfer of your IRA assets from one IRA to another. An important distinction between a transfer and a rollover is whether the participant actually receives the funds. In a rollover IRA the participant actually receives the funds and then redeposit them into the rollover IRA. In a transfer, the assets are directly transferred from one financial institution to another. An individual is limited to one rollover per year, but direct transfers are not subject to any annual limitations.
What are the tax consequences of a rollover?
As long as the rollover requirements are met, the amount rolled over is exempt from current taxation. When money is withdrawn from a rollover IRA, the participation is normally taxed on the distribution and could be subject to the premature distribution tax if they are not yet 59½.
Is there any difference between distributions from qualified retirement plans and those from IRAs?
Distributions from all types of retirement plans are subject to the requirements previously discussed. But a qualified plan may have additional rules for distributions to beneficiaries. The qualified plan administrator should be contacted for an explanation of the specific guidelines for a particular plan.
Who is a retirement plan beneficiary?
When a retirement account is opened, the plan participant must name someone other than themselves as a beneficiary. When a participant dies, the beneficiary is then entitled to receive the funds in the retirement account.
The method of calculating the required minimum distribution will be determined by the age of the retirement plan participant at their death. If the participant had reached the age that distributions were required by law, the distribution rules are more stringent than if the owner had died at an earlier age.
If the beneficiary of the retirement plan account is the surviving spouse, they have more distribution options than a non-spouse beneficiary.
What if there is more than one beneficiary?
If there is more than one beneficiary, the life expectancy rule must be calculated using the age of the oldest primary beneficiary.
How are distributions to a retirement plan beneficiary taxed?
Retirement funds received as a beneficiary are subject to ordinary federal income taxes. However, regardless of the age of the participant at the time of their death, the distributions are not subject to the additional 10% premature distribution penalty. An exception to this exemption would be the case of a spousal rollover. If the spouse takes a distribution after the funds have been rolled over, the standard distribution rules would apply.
What additional distribution options are allowed for a surviving spouse?
Spouses who inherit an IRA have more flexibility than non-spousal beneficiaries in regards to when they must withdraw the funds. The surviving spouse typically has a few choices. The spouse can treat the IRA as their own, designating themself as the account owner. The spouse can also roll it over (transfer the funds) into their own, pre-existing IRA. Finally, they can treat themselves as the account beneficiary.
The choice is usually based on when the spouse is due to take their RMDs or whether the deceased owner was taking their RMDs or not, at the time of their death. The option that's chosen can impact the size of the required minimum distributions from the inherited funds and, as a result, have income tax implications for the spousal beneficiary.
- Surviving spouse becomes the IRA owner
If you are the surviving spouse and sole beneficiary of your deceased spouse's IRA, you can elect to be treated as the owner of the IRA and not as the beneficiary. By electing to be treated as the owner, you determine the required minimum distribution as if you were the owner beginning with the year you elect or are considered to be the owner.
Spousal beneficiaries also have the option to roll over the inherited IRA funds, or a portion of the funds, into their existing individual retirement account. Spouses have 60 days from receiving the inherited distribution to roll it over into their own IRA as long as the distribution is not a required minimum distribution. By combining the funds, the spouse doesn't need to take a required minimum distribution until they reach the required beginning date (as of January 1, 2023 that age is 73.)
Becoming the owner of the IRA funds can be a good choice if the deceased spouse was older than the spousal beneficiary because it delays the RMDs. If the IRA was a Roth, and you are the spouse, you can treat it as if it had been your own Roth all along, in which case you won't be subject to RMDs during your lifetime.
However, this is not an all-or-nothing decision. You can parse the account and roll over some of it to your own IRA and leave the balance in the account you inherited, but there's no changing your mind. If you make a rollover and need funds from it before age 59½, you'll be subject to the 10% penalty (unless some penalty exception other than death applies).
- Surviving spouse acts as the beneficiary
RMDs are based on the life expectancy of the IRA owner. Spousal beneficiaries can plan the RMDs from an inherited IRA to take advantage of delaying the RMDs as long as possible.
If the IRA owner dies before the year in which they reach the required beginning date (age 73 as of January 1, 2023) distributions to the spousal beneficiary don't need to begin until the year in which the original owner reaches the required beginning date (RBD). After which, the surviving spouse's RMDs can be calculated based on their life expectancy. This can be helpful if the surviving spouse is older than the deceased spouse since it delays RMDs from the inherited funds until the deceased spouse would have reached the RBD (age 73 as of January 1, 2023.)
If the original owner had already started getting RMDs or reached their required beginning date (RBD)—the age at which they had to begin RMDs, at the time of death, the spouse can continue the distributions as were originally calculated based on the owner's life expectancy.
Please note that the RMD rules for beneficiaries do not eliminate the need for the deceased owner’s estate to take his or her RMD for the year of death if the owner died on or after reaching their RBD. The RMD for the owner reduces the account value on which the RMD for the beneficiary is figured.
However, the surviving spouse can also submit a new RMD schedule based on their own life expectancy. This process would mean applying the life expectancy for their age found in the Single Life Expectancy Table (Table I in Appendix B of IRS Publication 590-B).
Ideally, spousal beneficiaries want to use the longer single life expectancy, so that the annual RMDs are smaller, resulting in a delay in paying taxes on the inherited IRA funds for as long as possible. Remember, you can always withdraw more money than the required minimum distribution, if you need the funds.
What are my options as a non-spouse beneficiary?
If you are not a spouse and are bequeathed an IRA, you have to set up a new account, which is technically known as an inherited or beneficiary IRA. Make sure that the title of this new account conforms to tax law. The account title should read: "[Owner’s name], deceased [date of death], IRA FBO ("for the benefit of") [your name], Beneficiary". Do not put the account in your own name—if you do, the entire balance is treated as a distribution, and you owe taxes on the lump sum. It's very difficult to undo this error.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) made major changes to IRA RMD rules—pushing back the age of onset from 70½ to 72. As of January 1, 2023 that age is raised to 73.
It also significantly changed some rules regarding inherited IRAs. Starting with those inherited after Jan. 1, 2020, the SECURE Act requires the entire balance of the participant's inherited IRA account to be distributed or withdrawn within 10 years of the death of the original owner. The 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date (RBD)—the age at which they had to begin RMDs.
In other words, you must withdraw the inherited funds within 10 years and pay income taxes on the distributed amounts. Since the withdrawals are required, you won't pay the 10% penalty if you're under the age of 59½. But you must pay income taxes on the distributions, and you must eventually empty the account.
However, there are exceptions to the 10-year rule for certain types of beneficiaries.
- a surviving spouse
- a disabled or chronically ill person
- a child who hasn't reached the age of majority
- a person not more than 10 years younger than the IRA account owner
These beneficiaries are not obligated to empty the IRA. But unless they can treat the account as their own, they do have to take annual RMDs from it; the exact amount can be calculated based on their own life expectancy.
Generally, they have until Dec. 31 of the year following the IRA owner's death to start doing so. However, if the original account owner was required to take an RMD in the year they died but hadn't yet, the beneficiary is required to take that RMD for them in that year—and of the amount the deceased would've withdrawn. Additionally, a surviving spouse beneficiary may delay commencement of distributions until the later of the end of the year that the employee or IRA owner would have attained their age of RBD, or the surviving spouse’s required beginning date.
ROTH IRA
What is a Roth IRA?
A Roth IRA is a type of individual Retirement Account created by federal legislation. Contributions to a Roth IRA are not tax deductible, but qualifying distributions will be exempt from federal taxation.
Who is eligible for a Roth IRA?
In order to be eligible to open a Roth IRA, your income has to be below certain thresholds. A single taxpayer is fully eligible for a Roth IRA if their modified adjusted gross income (MAGI) is under the specified limit and married couples with modified adjusted gross income under the specified limit are also fully eligible for a Roth IRA.
See IRS Pubication 590-A for details.
What is the difference between a Roth IRA and a traditional IRA?
Depending on your income and whether you participate in your employer's retirement plan, contributions to a traditional IRA can be tax deductible. In a traditional IRA, contributions grow tax deferred until they are distributed. Consequently, while the accumulated income in a traditional IRA is deferred from taxation until distribution.
With a Roth IRA, contributions are not tax-deductible, but earnings can grow tax-free, and qualified withdrawals are tax- and penalty-free. Roth IRA withdrawal and penalty rules vary depending on your age and how long you've had the account and other factors. Before making a Roth IRA withdrawal, keep in mind the following guidelines, to avoid a potential 10% early withdrawal penalty:
- Withdrawals must be taken after age 59½.
- Withdrawals must be taken after a five-year holding period.
- There are exceptions to the early withdrawal penalty, such as a first-time home purchase, college expenses, and birth or adoption expenses.
How much can I contribute to a Roth IRA?
Contributions to either the Roth or a traditional IRA are limited. This is the maximum amount an individual can contribute to any combination of IRA accounts. You are not allowed to contribute the maximum to each type of account. You must have earned income to be eligible to contribute to either the Roth or a Traditional IRA. A spouse who meets the income requirement may also also contribute up to the maximum allowable to the IRA of their spouse.
See IRS Pubication 590-A for details.
Can I convert my current IRA into a Roth IRA?
When you convert a traditional IRA to a Roth IRA, you will owe taxes on any money in the traditional IRA that would have been taxed when you withdrew it. That includes the tax-deductible contributions you made to the account as well as the tax-deferred earnings that have built up in it over the years. That money will be taxed as income in the year you make the conversion
How do I open a Roth IRA?
Discuss with your tax advisor if the Roth IRA meets your individual retirement needs. Then contact your account representative to receive the necessary forms to open your new Roth IRA.
OTHER TYPES OF RETIRMENT PLANS MAY INCLUDE:
- Money Purchase Plans
- Defined Benefit Plans
- Target Benefit Plans
Discuss which type of retirement plan choices are best for you with your tax advisor. Then call your account representative to receive the necessary forms to start your new retirement plan.
Retirement law is a complex technical area. We strongly urge you to contact your personal tax advisor for more information.
"The time to start saving for retirement is now!"
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