E*Trade’s Complete IRA
Among its many IRA versions, E*Trade has the Complete IRA. Let’s check it out.
Complete IRA Overview
The Complete IRA at E*Trade is a unique retirement account that won’t be found at other investment firms.
It is designed for persons over the age of 59½. This is the age at which withdrawals can begin from
tax-deferred accounts without penalties from the IRS.
The Complete IRA comes with bill pay, a debit card, and a checkbook. Withdrawals from the account are recorded and a 1099-R is created at the end of the year that includes all withdrawals that were made. This withdrawal amount counts towards the Required Minimum Distribution (RMD) of the account if it has one.
Because retirees will eventually need to take withdrawals from their tax-deferred accounts, E*Trade’s Complete IRA is an innovative way of accomplishing the goal. It may be a good option for many people who plan to make multiple withdrawals during the year from their IRAs rather than one single withdrawal.
Opening a Complete IRA at E*Trade
The Complete IRA isn’t actually opened. Instead, it is upgraded from an existing regular IRA. By regular, we mean a Roth, Traditional, Rollover, or small-business IRA. So the first step is to get that account open. It can be an old account if you already have one, or you can simply open a new IRA and then convert it to the Complete account. In either case, making the conversion is rather easy.
After logging into the website, hover over the ‘What We Offer’ tab in the top of the website and select the link for retirement. On the next page, look for the tile for the Complete IRA. Click on the button to apply. You’ll get a page asking for the account to be converted. Select the account and follow the on-screen prompts. When finished, your old IRA will now be a Complete IRA, and E*Trade will send out the debit card and checkbook. If you don’t receive these add-ons in a timely fashion, be sure to reach out to an E*Trade associate via chat or phone.
It’s also possible to perform the necessary conversion through E*Trade’s mobile app. Go to the Menu tab on the app and tap on the link to open an account. In the drop-down menu that appears, select the link for retirement accounts. Scroll down to the tile for the Complete IRA and tap on the button to apply or learn more.
Using Bill Pay
Once the conversion has taken place, it’s really easy to set up bill pay. On the website, hover over the Transfers link at the top of the site and select the link for bill pay. It’s easy to add payees. On the mobile app, go back to the Menu page and this time tap on the Transfer link. On the next page, select the link for bill pay. The Complete IRA must first be enrolled on the website before bill pay can be managed on the mobile app.
Potential Investments in Complete IRA
A Complete IRA can be held in either self-directed or robo format. In the latter setup, an automated system invests in exchange-traded funds with low expense ratios. In the former, the customer decides what to buy and sell. Here, the lineup includes a much larger selection of ETFs plus stocks, options, futures, bonds, closed-end funds, and mutual funds.
Fee Schedule for E*Trade’s Complete IRA
The Complete IRA has no annual fee. Other potential recurring fees, such as inactivity charges, have also been eliminated. E*Trade has no minimum-balance requirement, either.
Trading fees are quite low. Options are either 50 or 65 cents each, and most stocks have no commissions at all. Trades of funds (mutual, closed-end, or exchange-traded) are now commission-free.
All three cash-management tools (bill pay, checkbook, and debit card) are free. The debit card comes with five ATM fee refunds per month. This cap can be removed if any one of the following three conditions is met:
- $50k minimum in E*Trade Bank accounts
- $50k minimum in investment accounts
- At least 30 trades in the previous quarter
The debit card has a daily $5k spending limit and a $1k daily ATM limit.
Taxation of the Complete IRA
The Complete IRA follows the Roth or Traditional tax system. In either case, no taxes are withheld from withdrawals. It is up to the account owner to report these correctly, although, as already mentioned, E*Trade will generate a 1099-R at the end of the year.
Charles Schwab’s IRA as a Substitute
Although E*Trade has a lot of financial services, there are some missing that can be found at Schwab.
For example, the latter firm has branch locations and full-service advisory accounts. This traditional advisory service offers IRAs, so Schwab may be a better option for some investors.
Charles Schwab charges no ongoing IRA fees, and an IRA can be opened with zero deposit. Self-managed and full-service advisory IRAs have large selections of tradable assets; there’s also a robo service that trades ETFs.
Although there is no Complete equivalent at Schwab, it is possible to transfer funds from an IRA straight into a linked bank account, which may have bill pay, checkwriting, and a Visa debit card. Schwab itself has bank accounts with all three features. Its debit card has unlimited ATM fee refunds with zero account requirements, which obviously is another advantage over E*Trade.
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