Individual Retirement Accounts

2020 Plan Year Information

Individual Retirement Accounts

A Morgan Stanley Individual Retirement Account (IRA) is a flexible and tax-efficient account for managing your retirement savings and supplementing any existing 401(k) plan(s) and any pension plan(s) you may be a participant in.

MORGAN STANLEY EMPLOYEE RETIREMENT OFFERS

  • Basic Individual Retirement Account (IRA) Offer: The IRA annual maintenance fee1 for employee and employee-related IRAs is $25.
  • Upgraded Individual Retirement Account Offer: Morgan Stanley employees and employee relatives will have the IRA annual maintenance fee waived if at least $200 is added to their IRA annually. The addition can be from a contribution,2 rollover or direct transfer.
  • Required Minimum Distribution Eligibility Fee Waiver: The IRA annual maintenance fee is waived for Traditional IRAs where the employee or employee relative is age 70½ or older.
  • Inherited IRA Fee Waiver: The IRA annual maintenance fee is waived for inherited IRAs maintained for employees or employee relatives.

FEATURES OF A MORGAN STANLEY IRA

  • A Morgan Stanley IRA is a great place to consolidate other IRAs and/or other retirement accounts from previous jobs – giving you greater control over your retirement assets while simplifying your financial life. However, consolidation may not be right for everyone. Before consolidating, you should carefully compare your options, particularly the differences (including but not limited to, the differences in fees and expenses, investment options, and services), and speak with your own legal and tax advisor.
  • You can make IRA contributions,2 do a transfer or rollover of an IRA held at another institution or do a direct rollover from a previous employer’s retirement plan (such as a 401(k)).
  • With a Morgan Stanley IRA, your money can be invested in a broad range of assets including CDs, bonds, stocks, mutual funds, annuities3 and managed accounts.
  • Your Financial Advisor or the Morgan Stanley Client Advisory Center can provide additional information about Morgan Stanley’s various brokerage and advisory products.

Note: You may have the following four options regarding a previous employer’s retirement plan (and you may be able to use a combination of the options depending on your employment status, age and the availability of the particular option):

  1. Cash out the benefits and take a lump sum distribution from the current plan subject to mandatory 20% federal income tax withholding, as well as potential income taxes and the 10% early withdrawal penalty tax, or continue tax deferred growth potential by doing one of the following:
  2. Leave the assets in your former employer’s plan (if permitted),
  3. Roll over the retirement assets into your new employer’s qualified plan, if one is available and rollovers are permitted, or
  4. Roll over the retirement assets into a Traditional IRA.

Some of the factors you should consider when making a rollover decision include (among other things) the differences in: (1) investment options, (2) fees and expenses, (3) services, (4) penalty-free withdrawals, (5) creditor protection in bankruptcy and from legal judgments, (6) Required Minimum Distributions or “RMDs”, and (7) the tax treatment of employer stock. FINRA has issued some relevant investor information such as The IRA Rollover: 10 Tips to Making a Sound Decision. For more information, please go to www.finra.org.

¹Employee and Employee-Related IRAs qualify for the IRA Offer. “IRAs” include Traditional IRAs, Roth IRAs, Rollover IRAs, SEP-IRAs, SAR-SEPs, SIMPLE IRAs, and Inherited IRAs. This offer applies to Employee and Employee-Related IRAs established either in a Morgan Stanley Branch or the Client Advisory Center (CAC).

²Subject to IRS rules regarding eligibility to contribute to an IRA.

By law, some IRAs may not be consolidated. Clients should consult their personal legal advisor.

3If you are investing in an annuity through a tax-advantaged retirement plan such as an IRA, you will get no additional tax advantage from the annuity. Under these circumstances, you should only consider buying an annuity because of its other features, such as lifetime income payments and death benefit protection.

Annuity products are offered in conjunction with Morgan Stanley’s licensed insurance agency affiliates.

Tax laws are complex and subject to change.  Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley. Individuals are encouraged to consult their tax and legal advisors regarding any potential tax and related consequences of any investments made under an IRA.

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FOR INTERNAL USE ONLY

CRC 1691749 (01/2017)