What is an IRA?
An individual retirement account (IRA) is an account that helps investors save money for retirement with tax-free growth or on a tax-deferred basis. An IRA itself is not an investment – rather, it’s a type of account that contains investments in the form of stocks, bonds, mutual funds, etc.
What IRA account types are offered at M1?
- Roth IRA
- Traditional IRA
- SEP IRA
What’s the difference between Traditional and Roth IRAs?
Traditional IRAs and Roth IRAs are the most popular types. With a Traditional IRA, your money goes in on a pre-tax basis similar to a 401(k). You can take tax deductions during the years in which you make contributions, and your money grows on a tax-deferred basis until you retire. If you do, you will pay taxes on your withdrawals at your ordinary income tax rate.
Contributions that you make to a Roth IRA are made after tax. Your savings can then grow tax-free until you retire. You will not have to pay taxes on your withdrawals after you retire, and you do not have to take the required minimum distributions at age 73.
Can I open and contribute to multiple IRAs at M1?
Yes, you can open and contribute to multiple types of IRAs at M1.
The 2024 IRA contribution limit is $7,000 ($8,000 if you’re age 50 or older) or your earned income for the year, whichever is less.
The 2023 IRA contribution limit is $6,500 ($7,500 if you’re age 50 or older) or your earned income for the year, whichever is less.
Keep in mind that these limits are cumulative across all your Traditional and Roth IRAs.
Contributions for SEP IRAs each year cannot exceed the lesser of 25% of your compensation, or $66,000 for 2023 and $69,000 for 2024.
Can I open a Spousal IRA?
No, M1 does not offer Spousal IRAs.
All accounts opened under the same email are registered under the tax ID of the primary account holder.
What is the minimum initial deposit for IRAs?
$500 is the minimum initial deposit for retirement accounts at M1. After your initial deposit, any amount of $10 or more can be deposited.
Can I take an M1 Margin Loan from my IRA?
No, IRA accounts are not eligible for an M1 Margin Loan.
Can I transfer my M1 Individual Brokerage or Joint Brokerage Account to my IRA?
No, since an M1 Individual/Joint Brokerage Account is taxable and an IRA account is tax advantaged, the IRS doesn’t allow the direct transfer of securities or cash from an Individual/Joint Brokerage Account into an IRA account.
You can withdraw funds from the taxable account and deposit them into the IRA account as a contribution.
What is a Roth conversion?
A backdoor conversion moves all, or part, of the balance of an existing Traditional IRA into a Roth IRA. Learn more about conversions.
What is an IRA recharacterization?
An IRA recharacterization occurs when contributions made to an IRA are transferred from the current IRA to an IRA of a different type. Learn more about IRA recharacterizations.
If you have further questions, please contact us.
M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.