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Individual Retirement Accounts #290526-2

Course Overview

Credit

Amount

CPA

5.5

CFP^®

CDFA^®

5.5

IAR/FINRA

3.5

Course Author: Paul J. Winn CLU ChFC Field of Study (CPA): Specialized Knowledge Field of Study (CFP): Retirement Savings and Income Planning Field of Study (CDFA): Financial Planning Considerations in Divorce Field of Study (IAR): Products and Practice

Course Description

Course publication/revision date: This course was updated on 1/23/2026.

In this course you will be introduced to terms and concepts used in connection with individual retirement accounts. Each new term is defined in the text and included in the Glossary. The concepts are explained and, where appropriate, are demonstrated through the use of examples.

At the conclusion of each important section, a Review Quiz is presented to test comprehension of the material presented. A response is given to each answer you select to the questions in the Review Quiz affirming the correct choice or explaining why the choice you selected was incorrect.

Table of Contents

Chapter 1 Traditional Individual Retirement Accounts1

Important Lesson Points	1
Chapter Learning Objectives	2
Background, Definition & Eligibility	2
Individual Retirement Accounts Affected by SECURE Act and Disaster Acts	3
SECURE Act IRA Contribution Changes	3
Elimination of Age Limit on Traditional IRA Contributions	3
Taxable Non-Tuition Fellowship and Stipend Payments Considered Compensation	3
Certain Foster Care Payments as Basis for Non-Deductible IRA Contribution	3
SECURE Act and SECURE Act 2.0 IRA Distribution Changes	4
Minimum Distributions Required at Age 73	5
Certain Qualified Birth or Adoption Distributions Avoid Early Distribution Penalty	5
Certain Inherited IRA Balances Must be Fully Distributed within 10 Years	5
Qualifying Longevity Annuity Contract Rules Changed	6
Annuity Periodic Payment Flexibility	6
Disaster Act IRA Distribution Changes	7
Premature Distribution Penalty for Emergency Distributions	8
Premature Distribution Penalty for Terminally Ill Individuals	8
Premature Distribution Penalty—Correcting Excess Contributions	8
Charitable Distributions from Individual Retirement Accounts	8
Statute of Limitations on RMD Insufficiency and Excess Contribution Penalties	8
Expansion of Employee Plans Compliance Resolution System	9
Traditional IRA Rules	9
Earned Income	9
Limits on Contributions	10
Maximum Annual Contributions	10
Traditional IRA Tax Considerations	11
Traditional IRA Tax Considerations—Contributions	12
Tax Treatment of Contributions by Active Participants	12
Tax Credits	15
Repeal of the Saver's Credit	16
Summary	17
Review Quiz #1	17
Traditional IRA Tax Considerations—Accumulations	18
Traditional IRA Tax Considerations—Rollovers	20
Eligible Rollover Distributions	20
Rollover of Qualified Birth or Adoption Distributions	22
Eligible Rollover Distributions	23
Direct and Indirect Rollovers	23
Mandatory Withholding	23
Avoiding Rollover Withholding	24
Indirect Rollovers Subject to Timing and Frequency Limitations	24
EGTRRA Permits Rollover of After-Tax Contributions	25
Summary	25
Review Quiz #2	25
Distribution	26
Premature Distributions	26
Premature Distributions Avoiding Tax Penalty	27
Pro-Rata Distribution of Non-Deductible Contributions	27
Required Distributions during Owner's Lifetime	28
Required Minimum Distribution Amount	29
Required Distributions at Owner's Death	31
Death before an Owner's Required Beginning Date Before 2020	31
Life Expectancy Rule	31
Five-Year Rule	31
Surviving Spouse's Election	31
Death Before an Owner's Required Beginning Date After 2019	32
IRS Proposed Regulations – February 2022	32
IRS Notice 2022-53	32
IRS Notice 2023-54	33
Eligible Designated Beneficiaries Not Limited to 10-Year Rule	33
SECURE Act 2.0 – Surviving Spouse Beneficiaries	34
Uniform Lifetime vs. Single Lifetime Table	34
Revised Life Expectancy – Beneficiaries' RMD Transition Rules	34
Trump Accounts and Contribution Pilot Program	35
Summary	37
Review Quiz #3	38

Chapter 2 Roth Individual Retirement Accounts39

Important Lesson Points	39
Chapter Learning Objectives	39
Definition & Eligibility	40
Limits on Contributions	40
Backdoor Roth IRA Contributions	42
Transfer of Limited §529 funds to Roth IRAs	42
Roth IRA Tax Considerations	43
Qualified Distributions Tax-Free	43
Non-Qualified Distributions Receive FIFO Tax Treatment	45
Non-Qualified Gain Distributions Before 59 ½ Subject to Tax Penalty	46
No Lifetime Required Distributions	46
Roth IRA Conversions & Transfers	46
Roth IRA Death Benefit Distributions – Death Before 2020	47
Life Expectancy Rule	48
Five-Year Rule	48
Roth IRA Owner's Death Occurring After 2019	48
Eligible Designated Beneficiaries Not Limited to 10-Year Rule	48
Summary	48
Review Quiz #4	50

Chapter 3 Individual Retirement Account Funding51

Important Lesson Points	51
Chapter Learning Objectives	51
IRA Investment Options	51
Trust or Custodial Account IRA Funding	52
Prohibited IRA Investments	52
Separately-Paid Custodial Fees a Miscellaneous Itemized Deduction	52
Using Annuities to Fund IRAs	52
Non-Tax Benefit #1: Annuity Death Benefits	53
Non-Tax Benefit #2: Annuity Life Income	54
Annuities and the SECURE Act 2.0	54
Qualifying Longevity Annuity Contracts	54
Divorce After QLAC Purchase	55
Penalty on Partial Annuitization	55
Variable Annuity Suitability Requirements	56
Securities Exchange Commission Rules	57
Regulation Best Interest	57
The Disclosure Obligation	58
The Care Obligation	58
The Conflict of Interest Obligation	58
The Compliance Obligation	59
Effect of Regulation Best Interest	59
Impact of the Disclosure Obligation	59
Impact of the Care Obligation	60
Annuity Sales & Best Interest Obligation	61
Summary	61
Review Quiz #5	61

Chapter 4 Education IRAs (Coverdell Education Savings Accounts)63

Important Lesson Points	63
Chapter Learning Objectives	63
Definition & Eligibility	63
Limits on Contributions	64
Eligible ESA Beneficiaries	65
Tax Considerations	65
Tax-Free ESA Distributions	65
Qualified Education Expenses	66
Postsecondary Credentialing Expenses Now Qualified Higher Education Expenses	66
Eligible Educational Institution	66
Taxation of Excess ESA Distributions	67
Summary	68
Review Quiz #6	68

Chapter 5 Simplified Employee Pension IRAs70

Important Lesson Points	70
Chapter Learning Objectives	70
Introduction	71
New Plan Startup Cost Tax Credit	71
Amount of the Tax Credit	72
SECURE Act 2.0 Changes to the Start-Up Tax Credit	72
Contributions	73
Defined Contribution Plan Limits Apply	73
Certain Employees Must Be Included	74
SEP Contributions for Domestic Employees	74
SEP Integration Permitted	74
Employee Plan Contributions Permitted	75
Active Participant Rules Apply to Employee Contributions	76
Distributions	76
Regular Distributions	77
Premature Distributions	77
Required Minimum Distributions	78
SEP Rollovers	79
Summary	80
Review Quiz #7	80

Chapter 6 SIMPLE IRAs82

Important Lesson Points	82
Chapter Learning Objectives	82
Definition & Eligibility	83
SIMPLEs Offer Less Expensive Alternative to Qualified Plans	83
SIMPLEs Restricted to Small Employers	83
SIMPLE IRA and SIMPLE 401(k) Replacements	84
Replacement by a 401(k) Safe Harbor Plan	84
SIMPLE IRA Contributions	84
Employee Elective Contributions	84
Catch-up Contributions	85
Increased Catch-Up Amounts at Ages 60-63	85
Increased catch-up amounts are indexed for inflation for years after 2025.	85
Employer Contributions	85
Matching Employer Contributions	86
Student Loan Payments Considered Elective Deferrals	86
Nonelective Employer Contributions	86
SECURE Act 2.0 Authorizes Increased Contributions for SIMPLEs	87
Additional Non-Elective Contributions Permitted	87
Other SIMPLE Requirements	87
Nonrefundable Tax Credit for Lower Income Taxpayers	87
SIMPLE Distributions	88
Premature Distributions	88
Exceptions to Premature Distribution Tax Penalty	89
Required Minimum Distributions	89
Rollovers	90
Direct and Indirect Rollovers	90
Rollover Recipient Plan	90
Summary	90
Review Quiz #8	91

Glossary92

Answers to Review Quizzes97

Review Quiz #1	97
Review Quiz #2	98
Review Quiz #3	100
Review Quiz #4	101
Review Quiz #5	102
Review Quiz #6	103
Review Quiz #7	105
Review Quiz #8	106

Index109

Course Details

Author: Paul J. Winn CLU ChFC

Paul J. Winn CLU ChFC — Financial Writer, Editor & Trainer. Education: B.A., St. John’s University (1961–1964); Law School, University of Virginia (1964–1965); MBA program Binghamton University (1986–1989); CLU (1985); ChFC (1987). Experience: Thirty years in the life insurance and investment industry (1965–1995). Thirty-one years as a financial writer, editor and trainer (1995–2026). Paul held positions at Mutual Life Insurance Company of New York as product developer and compensation officer; at Security Mutual Life Insurance Company as general agent, marketing vice president, and agency vice president; at Principal Financial Group as agency manager; and as president of Maryland Financial Corporation, managing a financial adviser corporation providing tax, investment and financial planning. As a writer and editor, Paul is a published book author whose books include Tax Planning from the Heart, Business Succession Planning, and Dominating Obamacare. He served as writer and editor of a major mutual life insurance company’s agent training university, created more than 200 insurance, securities and tax training courses in online, print and scripted classroom formats, and is the founder and CEO of Winn Publications LLC, a tax and insurance continuing education course licensor.

Publication/Revision Date: 1/23/2026

Course Exam Questions (online): 35 (multiple-choice)

Program Delivery Method: Self-Study (NASBA QAS Self-Study)

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None
CFP®	Overview	None	None
CDFA®	Overview	None	None
IAR	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

CFP Board Sponsor ID: 1008 — Course ID: 298405

Registered with the Institute for Divorce Financial Analysts

NASAA Sponsor ID: S17460 — Course ID: C80852

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Discuss the rules governing eligibility and permitted contribution levels for traditional and Roth IRAs.
Explain the tax treatment of contributions to and distributions from traditional and Roth IRAs.
Describe the benefits of tax-deferred accumulation.
Explain the rules concerning permitted IRA investments.
Discuss traditional and Roth IRA distribution rules.
Explain Coverdell Education Savings Account contribution and distribution rules and their tax implications.
Discuss the contribution and distribution rules that apply to SEP IRAs and SIMPLE IRAs.

Online Book, Online Exam

$51.00

Hardcopy Book, Online Exam

$66.00