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What requirements must be met?

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  • The trustee or custodian must be a bank, a federally insured credit union, trust company, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.
  • The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount.
  • Contributions, except for rollover contributions, must be in cash. (See Rollovers)
  • You must have a nonforfeitable right to the amount at all times.
  • Money in your account cannot be used to buy a life insurance policy.
  • Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund.
  • You must start receiving distributions by April 1 of the year following the year in which you reach age 70½ (Required Minimum Distributions).

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