This week's Slott Report Mailbag looks into inherited SEP-IRAs, 403(b)s and inherited IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I attended a past seminar and was extremely impressed with your knowledge of retirement plans. I was hoping that you could provide some guidance regarding one[...]
The internet can be a blessing and it can be a curse. It is a fantastic place to do research on almost anything, but is the information you find current and accurate? Here are five things to consider when doing internet research into retirement questions. Check the Date When was the article or blog written and/or posted? The tax code and rules change often. What was true three years or five [...]
Nothing lasts forever. This includes tax deferral on your IRAs. Eventually, Uncle Sam is going to want his share and will require funds to come out of these accounts. That is when required minimum distributions (RMDs) must begin. What if you don’t need the money? What if you don’t want a tax hit? Here are five strategies to reduce your RMDs. 1. Move your money to your plan. Are you still [...]
This week's Slott Report Mailbag looks into taking RMDs from multiple accounts, 60-day rollovers and the once-per-year rollover rule. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Dear Ed, We met many years ago through the IAFP (now FPA). My client turned 70 in January 2017 and wants to [...]
Most IRA accounts hold pre-tax contributions and rollover amounts from employer plans. For purposes of this blog, I am going to assume that there are no after-tax amounts held in any IRA, including SEP and SIMPLE IRAs. IRA distributions where the check is made payable to the IRA owner or the funds are transferred to a non-IRA account are almost always taxable. There are, of course, [...]
As the summer heats up, healthcare remains a hot topic. Will the ACA survive? Will Congressional Republicans succeed in repealing and replacing it? As we reach July these questions remain unanswered. One thing that is clear, however, is that Health Savings Accounts (HSAs) are playing a significant role in the healthcare deliberations. Proponents advocate expanding these accounts as a way to save [...]
This week's Slott Report Mailbag looks into inherited IRAs, RMDs, and NUAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have a question about a spouse inheriting from her husband's "Qualified Annuity" upon his death. He was an NYPD police officer. She was the sole beneficiary at his death on [...]
1. General Rule As a general rule, the account balance used for calculating required minimum distributions (RMDs) is the prior year-end account balance, with no adjustments. For example, if you are calculating an RMD for 2017 you would use the 2016 year-end account balance. If you are calculating a missed RMD for 2014, you would use the 2013 year-end account balance. If you have your first[...]
This week's Slott Report Mailbag looks into direct rollovers, Notice 2014-54, the pro-rata rule and NUAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello, I have attended some of Ed’s seminars in the past and have a specific client question that I was hoping you can help me with. In [...]
As with most IRA rules, there are exceptions to the once-per-year rollover rule. The rule applies to IRA-to-IRA and Roth IRA-to-Roth IRA 60-day rollovers. Just to be clear, an IRA rollover occurs when a check is issued by the IRA or Roth IRA custodian that is payable to the account owner. The following are the exceptions. Check Payable to the New Custodian When a check is issued that is [...]
The once-per-year IRA rollover rule sounds pretty easy to understand. You may only do one IRA-to-IRA (or Roth IRA-to-Roth IRA rollover) per year (365 days). However, there are many ways it can go wrong. Consider the following two scenarios. One involves multiple distributions and the other involves multiple rollover deposits. One is ok and the other is not. One Distribution and Multiple [...]
This week's Slott Report Mailbag looks into 60-day rollovers, IRA withdrawals, and NUAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: A few weeks ago, I withdrew money from my IRA (they withheld 10% for taxes). Later I discovered I did not really need this money. Can I repay this money within [...]
After you’ve answered the questions below, scroll down to see the answers and see how well you know your stuff! 1) Of Roth IRAs, Roth 401(k)s and inherited Roth IRAs, which, if any, are subject to required minimum distributions? 2) Technically speaking, what does IRA actually stand for? 3) Which type of account(s) hold more of American’s retirement money today; IRAs OR 401(k)s, [...]
So you think you don’t need/can’t afford an advisor? Have you considered the cost of making IRA mistakes? Even seemingly simple transactions are subject to rules and restrictions under the tax code. Did you contribute too much by mistake? This mistake cannot be corrected by simply withdrawing the excess amount. There are rules on how to fix the mistake. If you are not thoroughly familiar with [...]
This week's Slott Report Mailbag looks into calculating RMDs with multiple beneficiaries and inheriting IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Good afternoon. I have a question when one is faced with calculating RMDs and have multiple primary beneficiaries listed. Which [...]
The Roth IRA rules can be complicated. One area that is especially complex is understanding how the 10% penalty applies to converted Roth IRA funds. Here are five things you need to know if you already have converted funds in your Roth IRA or if you are just trying to decide whether Roth conversion is the right strategy for you. 1. The 10% early distribution penalty is not assessed at the time [...]
Greetings Slott Report readers! This week, Ed and I are in Las Vegas for the first ever AICPA Engage Conference. Engage has taken some of the biggest (and in my humble opinion, best) AICPA conferences, such as the Advanced Personal Financial Planning Conference and the Advanced Estate Planning Conference, and merged them into one giant conference. As I write this, I haven’t even started [...]
This week's Slott Report Mailbag looks at converting a traditional IRA to a Roth IRA, as well as making Roth contributions in the year of retirement. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have watched a few videos of Ed Slott speaking and he seems to be a big proponent of converting [...]
Age 50 Catch-up contributions for most retirement plans and IRAs can be made beginning in the year you are going to turn age 50. The only plan that does not allow catch-up contributions is the SEP IRA. The following are the catch-up limit amounts. IRA/Roth IRA $1,000 SIMPLE IRA $3,000 Employer plans (401(k), 403(b), governmental 457(b), etc.) $6,000 [...]
Roth 401(k)s and Roth IRAs have a lot in common. Both offer the ability to make after-tax contributions now in exchange for tax-free earnings down the road if the rules are followed. However, there are some important differences between the two plans that you will want to understand. Contribution Limits One major difference is the amount that you may contribute. Your Roth IRA contribution is[...]
Inherited an IRA with Missed RMDs? This Week’s Q&A This week's Slott Report Mailbag looks into missed RMDs, inherited IRAs, and QDROs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Have you ever encountered a situation where the beneficiary of a deceased IRA never took the RMD dating back[...]
3 Ways to Decimate a Retirement Account in a Flash 1) Missing the 60-day Rollover Window If you want to move your retirement account from one institution to another, you can do it one of two ways; directly or indirectly. Moving your account directly is the preferred way because it avoids a lot of headaches, but for various reasons, sometimes people choose to use the indirect method. When [...]
Tax-Free Roth IRA Conversions? We received many questions this past tax season about Roth IRA conversions that were supposed to be tax-free, but were not. Here is the scenario. Pam is eligible to make an IRA contribution but is not eligible to deduct it. She also is not eligible to make a Roth IRA contribution. Pam is advised to make an after-tax IRA contribution to her “after-tax” IRA [...]
Have You Faced This Dilemma with Spousal Contributions? This Week’s Q&A This week's Slott Report Mailbag looks into IRA beneficiaries, Roth IRAs, and spousal contributions. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello, My brother left an IRA and listed me as the only beneficiary, [...]
State and City-Run IRA Plans Are Not Going Away On April 13, President Trump signed into law legislation that blocked Obama-era Department of Labor (DOL) regulations encouraging the establishment of IRA plans run by cities and municipalities. On May 17, he signed similar legislation applying to state-run IRAs. While these new developments may make the road ahead for both city and state run IRA [...]
DOL Fiduciary Rule to Go into Effect June 9 The long-running saga of the Department of Labor (DOL) fiduciary rule took another turn on May 22 when Secretary of Labor Alexander Acosta confirmed that there would be no delay in the June 9, 2017, implementation date. Mr. Acosta said that after careful consideration, there was no legal basis to extend the deadline. Mr. Acosta’s announcement means[...]
The 99% Rule for Spousal Beneficiaries of Retirement Accounts It sounds funny to say, but death is a part of life for all of us. It’s one of the few things that all of us will have in common at some point, and it’s one of the few issues that must be addressed in every plan. While every situation is unique and we all have our own goals and objectives, the overwhelming majority of married [...]
Inherited IRAs and Roth IRA Distributions. This Week’s Q&A Mailbag. This week's Slott Report Mailbag looks into inherited IRAs, RMDs, and Roth IRA distributions. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I inherited a traditional IRA from my husband, and it has been retitled into my [...]
One-Rollover-Per-Year Rule and Spouse Beneficiaries Hopefully, by now everyone has heard that IRA owners can only do one IRA-to-IRA or Roth IRA-to-Roth IRA 60-day rollover in any one-year period. This interpretation of the 60-day rollover rules was part of a 2014 Tax Court decision (Bobrow v. Commissioner, T.C.Memo. 2014-21). What was unclear from this ruling and from subsequent IRS guidance was [...]
How Your IRA Can Cost You When It Comes to Medicare You have done the right thing for years. You have diligently saved and accumulated funds in your IRA. At some point, the funds that you have put away for years must come out. Uncle Sam wants his share. When you reach age 70 ½, you must take a required minimum distribution (RMD) for that year and for every year thereafter. You may not [...]
Preparing for Inherited IRAs: This Week’s Q&A Mailbag This week's Slott Report Mailbag looks into inherited IRAs, calculating RMDs, and 60-day rollovers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I read the Slott Report on a regular basis and enjoy the new information I learn. I have [...]
7 Ways the IRS Knows… It’s not a good question to be asking, and it’s certainly not the right question to be asking, but one fairly common question asked by both advisors and clients is “How are they going to know?” The “they,” they’re referring to, is the IRS. For those that have ever wondered, here are the answers to seven common “How are they going to know” questions. [...]
The 10% Early Distribution Penalty Exceptions – Know the Rules This is a reminder that not all 10% early distribution penalty exceptions apply to all retirement plan distributions. Here are the three biggest mistakes that we see. Higher Education – From IRAs Only Retirement funds can be used to pay for higher education expenses, but only when those funds come from an IRA account. This [...]
Problems with the Once-Per-Year Rollover Rule? This Week’s Q&A This week's Slott Report Mailbag looks into 72(t) payments, CD-IRAs, and the once-per-year rollover rule. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have a client who wants to take her 72(t) starting this month. If we do our [...]
6 Things Every Non-Spouse IRA Beneficiary Needs to Know It is not unusual to inherit an IRA from someone who is not your spouse. Many people inherit an IRA from a parent or a sibling. If this is the case for you, here are six things you will want to know. 1. Take some time. When you inherit an IRA, it is important that you don’t make any rash moves. Sometimes beneficiaries act too quickly [...]
3 Reasons a 401(k) Deferral Beats an IRA Contribution 1) There Are No Restrictions Preventing a Tax Break When you defer a portion of your salary into a traditional 401(k), the amount deferred will reduce your taxable income dollar-for-dollar. This is true regardless of how much income you (and your spouse, if applicable) have. In contrast, contributions to a traditional IRA are generally [...]
What the Trump Tax Plan Means for Your Retirement On April 26, 2017, the Trump administration released its highly-anticipated tax reform plan. The administration said the goals of the plan include growing the economy, creating jobs and simplifying the tax code. The changes proposed are significant and if passed (and that is a big if) could have a major impact on your retirement planning. A Tax[...]
Did You Have a Loss of Funds in an IRA Thanks to Your Broker’s Illegal Transactions? This Week’s Q&A
Did You Have a Loss of Funds in an IRA Thanks to Your Broker’s Illegal Transactions? This Week’s Q&A This week's Slott Report Mailbag looks into inherited IRAs, RMDs, illegal trades, and PLRs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: My sister died at age 77. She left me as the [...]
So You Think You Need to Name a Trust as the Beneficiary of Your IRA In two weeks I had three trusts come across my desk that were named as the beneficiary of the account owner’s IRA. The account owner had now died and the universal question was, “Now what?” The first trust was a Colorado trust. In all fairness, the attorney most likely advised the client not to name this trust as the [...]
7 Things You Need to Know About the Once-Per-Year Rollover Rule In 2014, the Tax Court in the Bobrow case ruled that the once-per-year rollover rule applies to all of an individual’s IRAs, not to each of their IRA accounts separately. The Court’s surprising ruling conflicted with a long-standing IRS position in earlier editions of IRS Publication 590 and in private letter rulings. Several [...]
If You're Over 70 1/2 Years Old and Still Working You Need to Know This This week's Slott Report Mailbag looks into still working exceptions, RMDs, and IRA transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Here’s a question I have not found an answer for. When a worker over the age [...]
How to Increase Your Chances of Audit to 100% Congratulations! You’ve made it through yet another tax season. By now, you should have either filed your return or an extension. If you did the former, and actually filed your return, a three-year statute of limitations clock has begun to tick. This three-year period is generally the amount of time that the IRS has to examine your return via an [...]
Interesting Use of the QCD Strategy Qualified Charitable Distributions (QCDs) are now a permanent part of the tax code. They allow individuals who are at least 70 ½ years old at the time of the transfer to directly transfer IRA funds to a qualifying charity. The individual gets no charitable deduction for these contributed funds, but, they do not have to include the funds in income. It is as if [...]
What Victims of Casualty Theft Need to Know: This Week’s Q&A This week's Slott Report Mailbag looks into Casualty Theft, IRS rules, Medicare, and Roth conversions.As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello. It has been some time since I’ve reached out to Ed Slott and your website[...]
Last Minute IRA Contribution Advice The 2016 tax-filing deadline is upon us. Are you considering making a 2016 IRA contribution? It’s not too late, but time is quickly running out. Here are some quick words of last minute advice to keep in mind as you make your contribution. 1. Don’t Miss the Deadline. The deadline for making your 2016 IRA contribution is the tax-filing deadline, [...]
Sometimes It Pays to Treat Your Kids Unequally As the father of more than one child, I understand the desire to try and treat children as equally as possible. You certainly don’t want one child to think you love him/her any less, or more, than your other children (though children will inevitably feel that way at one time or another), and you want the best for all of your children. But while [...]
The Consequences of Breaking Rollover Rules This week's Slott Report Mailbag looks into IRA rollovers, IRA transfers, and back-door Roth IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I made the mistake of moving more than one IRA account as a roll over and not a direct transfer as I was [...]
An IRA Rollover Quiz Most people think it is easy to move their retirement assets. But is it? The following is a quick quiz. How many of these rollover questions can you get correct? The answers are at the end of the quiz. You are moving funds out of your employer plan to your IRA. The funds are going directly to your IRA. Is this a rollover? You are moving funds out of your employer [...]
The Ultimate Rainy Day Fund; The Roth IRA A recent Pew Charitable Trusts study released in March came to the scary conclusion that roughly one-third of Americans would have trouble coming up with $2,000 in the event of an emergency. Clearly, this is a problem. Try as one might, emergencies are bound to happen from time to time. Some of them may not have an impact on your finances, but many [...]
This Week's Q&A: Converting a Pre-Tax IRA to a Roth and More This week's Slott Report Mailbag looks into converting and contributing to different IRAs, 401(k)s, and RMDs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here. Question: Three part question: In December [...]
Roth IRA Recharacterizations: 11 Things You Need to Know at Tax Time 1. It is not too late to recharacterize a Roth IRA conversion done in 2016. 2. Only funds actually distributed from an IRA or employer plan in 2016 will count as a 2016 Roth conversion. 3. A recharacterization of a 2016 Roth IRA conversion can be done up to October 16th, 2017 even if you have already filed your 2016 income[...]
What You Should Know Before You Name an HSA Beneficiary If you have an HSA, you will want to give some thought to what will happen to this account after your death. The rules are a little tricky and careful planning is important to minimize the tax bite. HSA Beneficiaries You should name a beneficiary for your HSA, just as you would for your IRA or company retirement plan. After your death,[...]
Don't Lose Out on Claiming a Loss: This Week's Q&A This week's Slott Report Mailbag looks into claiming a loss in a traditional IRA, and 403(b) transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I receive your emails relating to IRAs. I have a question regarding claiming a loss in a [...]
Is a Trusteed IRA Right for You? Trusteed IRAs have been in the news recently. More and more financial organization are making these products available. Is a trusteed IRA a good strategy for you? Here is what you need to know about this increasingly popular option. An Important Decision When you have an IRA, at some point you must think about what you want to happen to your funds after your[...]
Strategies to Make the Most of Your Retirement Assets “Confidence comes from being prepared.” —John Wooden A successful retirement plan does not happen overnight nor can it exist without proper preparation. A client once asked me, “How can we properly prepare for retirement if we do not know what the rules will look like when we retiree?” This was a very valid question[...]
7 IRA Questions to Ask Before You File Your Return 1) Did you make a deductible IRA contribution for 2016? If yes, make sure the deduction is reflected on line 32 of your Form 1040. 2) Did you make a non-deductible IRA contribution for 2016? If yes, make sure the contribution is reported on Form 8606. The contribution will not, however, be reported anywhere on your Form 1040. If you [...]
Mailbag Q&A: Early Distributions, Back-door Roth Conversions and More This week's Slott Report Mailbag looks into early distributions, back-door Roth conversions, and Roth IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: A tax payer lost his job in March. If he took an early distribution [...]
Things to Tell Your Tax Preparer During Tax Season Any time you get a 1099-R for a retirement plan transaction, make sure you give it to your tax preparer. The IRS gets copies of your 1099-Rs, so they need to be included on your income tax return. They cannot be ignored, even if they are for a non-taxable transaction. How will your tax preparer know it is a non-taxable transaction? You have to [...]
How Cupid’s Arrow May Save Your Retirement Plan Over $23 trillion sits in various types of retirement accounts across America, according to the Employee Benefit Research Institute. Even that figure may be low. Since 2011 when that figure was calculated, markets have increased and retirement savers have contributed even more to their plans, adding thousands of dollars to the average [...]
6 Tips for Making Your 2016 Roth IRA Contribution Tax season is well underway. This is the time when you may be considering contributing to a retirement account. You may be interested in the Roth IRA, which offers the promise of tax-free withdrawals in retirement if you follow the rules. If you are deciding whether a 2016 Roth IRA contribution is the right move for you, here are 6 tips to keep in[...]
Can You Really Transfer That Penalty Free? This Week's Q&A This week's Slott Report Mailbag looks into IRA transfers and international transfers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello. I am a 55 year old, single, self-employed woman with $4,700 in a traditional IRA that I am not[...]
Do You Have to File an Amended Return? If you’re like most people, you’ve probably wondered at some point, “Do I need to file an amended return for that?” It is in that spirit that we offer you seven common errors and whether or not you should file an amended return after you discover them. Issue #1 – You forgot to take a required minimum distribution last year. Should you file an[...]
QCD – Tell Your CPA About It Did you or your client do a QCD (Qualified Charitable Distribution) last year? Make sure the tax preparer knows about it. The IRA custodian is not required to report a QCD transaction on Form 1099-R. Instead, it will show up as a regular distribution to the IRA owner. A regular distribution is normally a taxable event. A tax preparer, especially at this time of [...]
There’s No Place Like Home: Unlocking the Door to Greater Retirement Income Running out of money while there is still much life to live is frightening. The specific concern is that retirees might spend down their assets at a faster pace than their investment gains accrue. Financial advisors are commonly tasked with helping clients determine if, and under which circumstances, they will have [...]
After Death, Don't Leave Your Loved Ones This Headache This week's Slott Report Mailbag looks into beneficiaries, inherited IRAs, RMDs and annuities. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: A spouse inherits a Savings and Investment Plan from her husband at his death. She fails to name her[...]
If IRAs Had Oscars… Announcer: And the award for Best Type of Account to Help John Doe in Retirement goes to… …the Roth IRA! Roth IRA: I… I… I don’t know what to say. I mean this is all so unexpected. I’d like to thank John Doe for believing in me when no one else would. I mean, he had CPAs tell him that he was crazy. He had friends tell him that he was crazy. He had [...]
IRS OKs Spousal Rollover. . . with a Twist In recent Private Letter Ruling (PLR 201706004) the IRS allowed a widow to do a spousal rollover, but with an interesting twist that also ruled the five-year rule applied because the IRA had no designated beneficiary. Widow’s Story The story begins after the death of her husband, and the widow had a very unpleasant surprise. She was not named as [...]
Sending Out a SOS for Those Taking RMDs and Inheriting IRAs This week's Slott Report Mailbag looks into inherited IRAs, beneficiaries, and RMDs when you are still working. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have been told that I can escape future RMD requirements by transferring IRA[...]
Age 70 ½ Confusion for Retirement Accounts Required minimum distributions (RMDs) must begin from most of your retirement accounts at age 70 ½. But it is not as easy as just looking at when you are 70 ½. First of all, it is not when you actually turn 70 ½. Your required distributions begin in the year you turn 70 ½. That means that those of us who are born from January through June turn 70[...]
How to Avoid a Penalty on Your Excess IRA Contribution Did you make your IRA contribution for 2016? If you did, you may want to take some time now during tax season to be sure your contribution is an allowable contribution and not an excess contribution. What is an excess IRA contribution? Excess contributions to IRAs can happen for a wide variety of reasons. No one can contribute more than[...]
Obstacles with IRA Contributions and RMDs: This weeks Q&A This week's Slott Report Mailbag looks into spousal contributions, IRAs, the IRS guidelines, and RMDs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I read your excellent post of December 07, 2015 titled “How a Stay-At-Home Spouse [...]
Conquer Your Fear of Tax Season One of the most common questions asked during tax season is, “Do I have to file a tax return?” The answer, of course, is a bit complicated, but in general, if your income is equal to or greater than the sum of the standard deduction plus your personal exemption, you must file a return. The standard deduction is higher for those 65 or older, so age makes a [...]
Most people think it is easy to leave an IRA to their heirs. But is it? The following is a quick quiz. How many of these beneficiary questions can you get correct? The answers are at the end of the quiz. 1. The IRA owner has four children. He names the oldest child as the beneficiary of his IRA and the executor of his will which divides all his assets equally among the four children. Who gets [...]
You Missed a RMD! Now What? This weeks Q&A This week's Slott Report Mailbag looks into missed RMDs, IRA transfers, and Testamentary Trusts. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Questions: I am sure you can help me with this situation. A person died on November 29, 2015. His Roth IRA was [...]
Sometimes the Score at Halftime DOES Matter On Sunday night we were treated to the first ever overtime in Superbowl history. It was a great game (with a lousy outcome – sorry, not a Pats fan). Of course, what most people will remember is that the Patriots finished off what may be the greatest comeback in sports history (that hurts to say), and that it was only the score at the end of the game [...]
5 Things Every Roth IRA Owner Should Know Before Taking a Distribution Are you one of the growing number of savers who has a Roth IRA? If so, there will come a time when you will want to take funds from your account. Here are 5 things that every Roth IRA owner should know before taking a distribution. 1. Your Roth IRAs are treated as one account.Things can get a little tricky if you have more[...]
Did you Inherit an IRA? Don't Inherit a Mess. This weeks Q&A Mailbag. This week's Slott Report Mailbag looks into inherited IRAs, beneficiaries, and backdoor Roth IRA strategies. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: My client just inherited an inherited IRA from her spouse, who [...]
What Happens When Beneficiaries do Not Split the Inherited IRA? Generally, the goal when naming IRA beneficiaries is that they will stretch out their distributions on the inherited IRA for as long as possible. The tax code and regulations currently support this goal by stating that the stretch option is the default option. But, of course, there are certain rules that must be followed. The IRA [...]
Why You May Reconsider Naming Your Trust as Your IRA Beneficiary IRAs have been around for decades. You may have had your IRA for years. Maybe many years ago, when you established your IRA, you named a trust as the beneficiary and haven’t thought a lot about it since. You likely spent both time and money drafting the trust and were careful to name the trust on your IRA beneficiary form. Here [...]
Imperative Q&A's involving Transfers, Rollovers, and Beneficiaries This week's Slott Report Mailbag looks into indirect and direct transfers, 60-day rollovers, trusts as a beneficiary, and 403(b)'s. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello, I am a public TV subscriber and [...]
Yes, You Actually CAN Do That Last week my Slott Report article created something of a firestorm in my email inbox. Shortly after it was posted I began to receive a litany of emails, all written very respectfully, but all of which said my post was incorrect and that revisions were necessary in order to avoid Slott Report readers from making errors with respect to their planning. To recap the [...]
HSAs Are NOT the Answer to America’s Health Insurance Problems In my opinion, expanding the availability of HSAs to more Americans is not going to solve the problem of providing health insurance to all Americans. Here is why I believe that statement. IRA accounts were established by ERISA in 1974. Today, anyone with earned income can contribute up to $5,500 a year, $6,500 a year if you are [...]
Over 59 1/2? You Must Know these Roth IRA and 401K Answers This week's Slott Report Mailbag looks into Roth IRAs, 401Ks, contributions, tax-free options, and more. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: My wife is a self-employed Dental Hygienist who does fill-in work for Dentists, so has no[...]
Avoid This Costly Mistake At Death It’s not exactly a fun thing to think about, but death is an absolute inevitability. When that time comes or more aptly, sometime before that time comes, there are a number of planning strategies that you can implement to make sure that you preserve tax benefits and minimize present and future income taxes for your heirs. One such planning opportunity may [...]
Need to Withdraw From an IRA Before Turning 70 1/2 Years Old? This Weeks Q&A Mailbag and More. This week's Slott Report Mailbag looks into RMDs, QCDs, and IRA withdrawals prior to turning 70 1/2 years old. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Hello. I am wondering if you could answer[...]
What's New and How Does it Impact You? Retirement Plan Contribution Limits for 2017. There were few changes to the retirement contribution limits for 2017. IRA and Roth IRA limits remain the same. The maximum an individual with earned income can contribute is $5,500 split any way they want between traditional and Roth IRAs. An individual age 50 or older during the year can contribute an [...]
7 Resolutions for Your IRA for 2017 A new year brings a fresh start and a chance to do things better. You probably have a few resolutions for 2017. You may be planning to eat healthier, get more exercise, or stick to a budget. As you are making your resolutions for the new year, don’t overlook your IRA. Here are a few suggestions for 2017. 1. Don’t Wait. Thinking about making an IRA [...]
When You're 70 1/2 Avoid These Disastrous Mistakes This week's Slott Report Mailbag looks into RMDs, Roth IRAs, and "still working" provisions. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: Good afternoon! We have a client who said he saw a special of yours on PBS, and his understanding was [...]
Death is inevitable. It comes for us all at one point or another. Some sooner than later, but none are able to escape its grasp. Whenever that time comes, your “stuff,” including your financial assets, generally live on, and are still essentially yours until they are legally transferred to another person or entity. That transference of assets can occur in any number of ways, but often includes[...]
This week's Slott Report Mailbag looks into international beneficiary IRAs, tax free IRA withdrawals, and inherited IRAs. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have a question pertaining to if a IRA owner has taken part of their RMD but then dies before year end…..does that remainder [...]
Question: When is the last day to make a 2016 Roth IRA conversion? Answer: In order for a Roth IRA conversion to be considered a 2016 Roth conversion, the money must leave the distributing account by December 31, 2016. So if a distribution is made from a traditional IRA on December 31, 2016 and it doesn’t get into the Roth IRA until February 15, 2017, it’s still a 2016 Roth IRA conversion.[...]
As 2016 draws to a close, and we get ready to ring in the new year, it’s a great time to look back. Here is a roundup of six of the big stories in the world of retirement accounts for 2016. 1.Qualified Charitable Distributions Become Permanent Qualified charitable distributions (QCDs) made headlines when Congress brought them back from the dead in late 2015. A QCD allows an IRA owner or [...]
This week’s Slott Report Mailbag looks into Inherited IRAs, Defined Contribution Profit Sharing Plans, and Roth 401K rollovers. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Question: I have a somewhat complex situation. Cliff notes below: A 401k participant is 28 years old. He dies inSeptember [...]
H – Have your financial institutions send you a copy of the beneficiary information they have on file for you. On more than a few occasions, we’ve seen financial institutions lose copies of beneficiary forms (or in some really egregious cases, destroy them). Asking for this information annually helps ensure that there are no surprises when you’re no longer here. The beneficiary form is the [...]
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