“Third-party posts from Ed Slott’s IRA Blog:”

IRA BLOG

DEADLINE FOR OPENING UP A NEW SOLO 401(K) PLAN

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport A solo 401(k) plan is a great retirement savings vehicle for self-employed business owners with no employees (other than their spouse). But if you’re considering a new solo 401(k), be aware that...

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INHERITED IRAS AND RMD TABLES: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Hello!  I need clarification regarding RMD statements for customers who hold inherited IRAs or inherited Roth IRAs. I have not been able to find a clear answer to the following...

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NUA – TRIGGER ACTIVATORS!

By Andy Ives, CFP®, AIF® IRA Analyst The goal of the net unrealized appreciation (NUA) tax strategy is to enable a person to pay taxes on the appreciation of company stock formerly in a work plan at long term capital gain rates as opposed to ordinary income rates. The...

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IRA TRANSACTIONS THAT CAN BE MISSED

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Not every IRA transaction is easily identifiable. Some require a little legwork to reveal or report what occurred. Some transactions are not even labeled on official IRS tax forms and can go...

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THE REQUIRED BEGINNING DATE IS NOW A “REALLY BIG DEAL”

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport When it comes to IRAs and workplace plans, the concept of the “required  beginning date” (RBD) is a “really big deal” again. The RBD is the first date you’re required to start required minimum...

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A TAX-FREE ROTH IRA DISTRIBUTION IN 5 EASY STEPS

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Roth IRAs offer a trade-off where you pay taxes now on your contribution (or conversion) in exchange for tax-free earnings later. Don’t miss out on tax-free Roth IRA...

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THE CLOCK IS TICKING ON 2022 CONVERSIONS

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Fall is in full swing now with football, foliage, and pumpkin spice everything. The holiday season is just around the corner. Before we know it, the year 2022 will come to an...

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RMDS AND ROTH IRA 5-YEAR RULE: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport QUESTION: Iturn 72 next month.  Can I take part of my RMD this year and the balance before April of next year? Howard ANSWER: Howard, Happy early birthday! Since you turn 72 this year, 2022 is...

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THE LAS VEGAS CONFERENCE

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport The Ed Slott team hosted a highly successful training program for members of Ed Slott's Elite IRA Advisor Group℠ and Ed Slott's Master Elite Advisor Group℠ last week in Las Vegas. Over 300...

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IRA ROLLOVERS AND 2021 RMDS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Can an IRA to Roth IRA rollover be spread out over two transactions to soften the upfront tax hit? Answer: When a conversion is done, any taxes owed would be owed in...

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A CLEAR EXPLANATION OF THE RBD

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport SECURE Act regulations shoved the required beginning date (RBD) to the front of the stage. No longer can the RBD hide from the bright lights. What was once somewhat of a minor date in people’s...

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IRS PROVIDES SOME RELIEF FOR VICTIMS OF HURRICANE IAN

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport If you are a victim of Hurricane Ian, you may be eligible for some relief when it comes to your retirement accounts. The IRS has postponed certain tax deadlines for individuals...

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RMDS AND INHERITED IRAS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: I must take an RMD this year, based on 12/31/2021 account values. My current account values are much less than those of 12/31/2021. This is typical, I’m sure. Is there any chance...

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“UPDATE NEEDED” – TOP 5 IRA ITEMS TO CONSIDER

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport We are constantly bombarded with requests to update our information. “Password needs updating.” “Software update for your mobile device.” “Please update your email so our marketing team can...

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IRS REGULATIONS AND QCDS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: When will the IRS release final regulations for RMDs on beneficiary IRAs? Kim Answer: Hi Kim, That is a great question. We have been fielding many inquiries about...

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HOW ARE ROTH 401(K) DISTRIBUTIONS TAXED?

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport More and more 401(k) plans now offer Roth contributions. At the same time, Americans are changing jobs and receiving 401(k) distributions in record numbers. So, it’s a good time to review the tax...

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QCDS AND THE ABSOLUTE NECESSITY FOR A CWA

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Qualified Charitable Distributions (QCDs) are a common transaction these days, but all guidelines must be followed to ensure the QCD is valid. Recent court cases have exposed the absolute...

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3 IRA RULES TO KNOW BEFORE YOU WALK DOWN THE AISLE

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport According to many recent surveys, the fall months of September and October are overtaking June as the most popular time of year to tie the knot. If your wedding is approaching...

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THE LIMITS OF ERISA SPOUSAL PROTECTION

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport A recent federal court case from West Virginia illustrates that the spouse of a 401(k) participant usually has no right to prevent the plan from paying the participant a lump sum distribution....

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ROTH IRA DISTRIBUTION ORDERING RULES

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport This may seem like a rudimentary topic, but it is the basics that are often so confusing. A fundamental understanding of Roth IRA distributions is essential for Roth IRA owners. In a blog post...

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YOUR AGE AND YOUR ROTH IRA CONVERSION

By Sarah Brenner, JD IRA Analyst Follow Us on Twitter: @theslottreport Questions on how age affects the decision to convert to a Roth IRA are common. What age is too old to convert? There is no easy answer to this question because there is no magic age when conversion...

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ROTH CONVERSION – OOPS!

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport An advisor called to discuss Roth IRA conversions. His new client made some decisions before speaking with him, and he was trying to untangle her self-inflicted knot. She was 69 years old, a...

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HOW AN ESA CAN HELP WITH BACK-TO-SCHOOL EXPENSES

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport August is winding down and September is just around the corner. That means that it is back to school time! Education can be expensive. This year, with inflation raging, that...

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A RETIREMENT ACCOUNT SCORECARD

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Here’s a line from one of the manuals we use in our education seminars for advisors: “Missed stretch IRA RMD by an EDB, when the IRA owner dies before the RBD.” An old baseball expression says: “You...

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YEAR-OF-DEATH RMD

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Lifetime required minimum distributions (RMDs) start in the year when an IRA owner turns 72. (Technically, the “required beginning date” for RMDs is April 1 of the year after a person turns...

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WHAT YOU NEED TO KNOW ABOUT THE STILL-WORKING EXCEPTION

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Are you nearing retirement age and not looking forward to taking unwanted required minimum distributions (RMDs) from your retirement account? You may be looking for a strategy...

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THE UNPLEASANT SURPRISE OF THE ACCURACY-RELATED PENALTY

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport If a retirement account transaction becomes a taxable distribution, you probably know you will owe taxes and possibly the 10% early distribution penalty (if under age 59 ½) on the distribution. But...

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RMDS & ROTH CONVERSIONS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: My husband is the sole beneficiary of a Traditional IRA owned by his cousin, who recently  passed away. From my research, I believe my husband fits the exception criteria of "eligible...

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INHERITED IRA Q&AS

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Each week the Ed Slott team answers questions from financial advisors across the country. Sometimes we see a pattern in repeating questions, sometimes the questions are relatively basic, and...

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FOUR THINGS TO KNOW ABOUT YOUR PLAN ROLLOVER AND YOUR RMD

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Many Americans are still working long beyond what has traditionally been retirement age. This may be a choice or a necessity. If this is your situation, you may be keeping...

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DIRECT TRANSFERS, DIRECT ROLLOVERS, AND 60-DAY ROLLOVERS

By Andy Ives, CFP®, AIF® IRA Analyst When moving retirement money from IRA to IRA, or from a workplace retirement plan like a 401(k) to an IRA, there are essentially three methods to relocate those dollars. Two of them are similar, and the third opens all kinds of...

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REPAYING A CRD

By Sarah Brenner, JD Director of Retirement Education Back in 2020 when COVID first became our new reality, Congress enacted the CARES Act. The CARES Act allowed qualified individuals who were affected by COVID to take penalty-free distributions from their retirement...

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SIDESTEPPING THE NEW IRS PRIVATE LETTER RULING FEES

By Ian Berger, JD IRA Analyst Like most everything else these days, the price for receiving an IRS private letter ruling (PLR) has recently gone up. A person will request a PLR to receive the IRS’s blessing that a specific tax transaction won’t violate the tax code or...

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CONDUIT IRA – IS IT REALLY NECESSARY?

By Andy Ives, CFP®, AIF® IRA Analyst Conduit IRAs, sometimes called “rollover IRAs,” typically contained only money rolled over from a company plan - and subsequent earnings on those dollars. But a 2001 tax law (Economic Growth and Tax Relief Reconciliation Act of...

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4 QCD RULES THAT MAY SURPRISE YOU

By Sarah Brenner, JD Director of Retirement Education A Qualified Charitable Distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity income-tax free. If you are thinking this might be a good strategy for you, here are 4 QCD rules that...

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SENATE COMMITTEES TAKE UP RETIREMENT SAVINGS PROPOSALS

By Ian Berger, JD IRA Analyst Proposals to boost IRA and workplace plan savings are advancing, but they are not law yet. Several actions must occur before the proposals become law. On March 29, the House passed the “Securing a Strong Retirement Act of 2022.” Now, two...

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INHERITED IRAS AND RMDS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Question: Dear Sirs: I inherited a regular IRA upon my mother's death in 2015. I am now 75 years old and have been taking required distributions since then. She was taking distributions herself when she died. My...

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SHOULD I ACCEPT A LUMP SUM BUYOUT OFFER?

By Ian Berger, JD Director of Retirement Education Should I Accept a Lump Sum Buyout Offer? With economic uncertainty increasing, more companies with defined benefit (DB) pension plans will likely attempt to improve their bottom line by offering lump sum buyouts. A...

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DEATH OF A SPOUSE, DEATH OF DAD

By Andy Ives, CFP®, AIF® IRA Analyst Over the past couple of months I have been tasked with the unfortunate responsibility of helping my mother sort through her financial affairs after the death of her spouse. My dad passed in March, and it has been a steady stream of...

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TOO OLD TO CONVERT? THINK AGAIN

By Sarah Brenner Director of Retirement Education You may have heard how converting to a Roth IRA is a great move for younger people. This is no surprise. A younger person who converts has two big factors working in her favor. She may pay taxes on a smaller IRA...

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72(T) DON’TS

By Andy Ives, CFP®, AIF® IRA Analyst The 72(t) rules (”series of substantially equal periodic payments”) allow a person to tap retirement dollars before 59½ without a 10% early distribution penalty. However, to gain this early access, you must commit to a plan of...

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WHEN THE FIVE-YEAR RULE APPLIES

By Sarah Brenner Director of Retirement Education If you inherit an IRA, especially if it is a larger one, you may be afraid of being stuck with the five-year distribution rule. If this rule applies, your IRA must be entirely emptied in five years, which can be a...

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ONE ROTH IRA BUCKET

By Andy Ives, CFP®, AIF® IRA Analyst SCENARIO: John owns multiple Roth IRAs. He believes it is necessary to maintain all these accounts to keep things properly organized and to track his 5-year conversion clocks. He has contributed to Roth IRA #1 for over a decade. He...

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5 WAYS AN EXCESS IRA CONTRIBUTION CAN HAPPEN

By Sarah Brenner, JD Director of Retirement Education You can have too much of a good thing. While saving for retirement with an IRA is a good strategy, there are limits.  When a contribution is not permitted in an IRA, it is an excess contribution and needs to be...

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WHEN A “REVERSE ROLLOVER” MAKES SENSE

By Ian Berger, JD IRA Analyst Usually, rollovers involving 401(k) accounts and IRAs involve moving dollars from a plan to an IRA. But sometimes it makes sense to instead do a “reverse rollover” – from an IRA to a 401(k). Let’s get some bad news out of the way:...

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WATCH OUT FOR THE ONCE-PER-YEAR ROLLOVER RULE

By Sarah Brenner, JD Director of Retirement Education Why is it so important to know how the once-per-year rollover rule works? Well, that is because trouble with the once-per year rule is the kind of trouble no one wants! An IRA owner who violates this rule is...

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HOW THE VESTING RULES WORK FOR COMPANY RETIREMENT PLANS

By Ian Berger, JD IRA Analyst Employees leaving their jobs are often surprised to discover they aren’t entitled to the full balance of their company plan account. The reason is that some plans impose a vesting rule on certain types of contributions. What do the...

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HOW YOUR IRA CAN HELP IF YOU ARE A FIRST-TIME HOME BUYER

By Sarah Brenner, JD Director of Retirement Education The real estate market is red hot right now. This can be especially challenging for first time home buyers. IRA savings are intended to be used for your retirement. However, if you are like many others, your IRA...

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A DOZEN QCD FACTS

By Andy Ives, CFP®, AIF® IRA Analyst Qualified charitable distributions (QCDs) continue to gain popularity, and with that popularity comes more questions. Here are a dozen QCD facts that will keep you on the straight-and-narrow with your QCD transactions: 1. QCDs are...

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INVESTING YOUR IRA IN CRYPTO

By Sarah Brenner, JD Director of Retirement Education Recently, Fidelity investments made headlines by announcing that it would allow retirement savers to put Bitcoin in their 401(k)s. Cryptocurrency has been all over the news, and you may be wondering if it would be...

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401(K), 403(B), 457(B): DOES IT REALLY MATTER?

By Ian Berger, JD IRA Analyst There are three types of company savings plans: 401(k) plans if you work for a for-profit company; 403(b) plans if you work for a tax-exempt employer, a public school or a church; and 457(b) plans if you work for a state or local...

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FIRST DOLLARS OUT RULE AND THE STILL-WORKING EXCEPTION

By Andy Ives, CFP®, AIF® IRA Analyst For those who have 401(k)s or other employee retirement plans (but not SEP or SIMPLE plans), the required beginning date (RBD) for when required minimum distributions (RMDs) are to begin is the same as for IRA owners – April 1 of...

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UNDERSTANDING THE SAME PROPERTY RULE

By Sarah Brenner, JD Director of Retirement Education For IRA-to-IRA or Roth-to-Roth 60-day rollovers, the same property received is the property that must be rolled over. These rules also apply to SIMPLE and SEP IRAs. You cannot receive a distribution of cash and...

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TAKE ADVANTAGE OF CATCH-UP CONTRIBUTIONS!

By Ian Berger, JD IRA Analyst Tax Day 2022 seems like an appropriate time to review a sometimes-overlooked way to get extra dollars into your IRA or company savings plan. Folks age 50 or older are allowed to make “catch-up” contributions with no strings attached....

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LAST-MINUTE IRA TAX DEADLINES & RULES

By Andy Ives, CFP®, AIF® IRA Analyst The deadline for filing your 2021 tax return is this Monday, April 18. It is extended through the weekend because IRS offices in Washington DC are closed on Friday, April 15, in observance of the locally recognized Emancipation...

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5 TAKEAWAYS FROM THE NEW SECURE ACT REGULATIONS

By Sarah Brenner, JD Director of Retirement Education The SECURE Act was signed into law in late December of 2019. This new law upended the rules for retirement accounts. With it came many questions, and IRS guidance was eagerly anticipated. Finally, on February 23,...

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INHERITED IRAS AND SEP ACCOUNTS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Question: I have a non-spousal inherited IRA account.  Once I take out my RMD for the year, am I able to take out excess funds and roll those into a Roth account? Thank you. Answer: Inherited IRA accounts do not follow all the same...

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HOUSE PASSES SECURE 2.0 BILL, BUT IT’S NOT LAW YET

By Ian Berger, JD IRA Analyst A bill designed to increase savings in IRAs and company plans has passed the House of Representatives, but it’s not yet law. The bill is officially called the “Securing a Strong Retirement Act of 2022,” but many are calling it “SECURE...

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THE 3 EXCEPTIONS TO THE PRO-RATA RULE THAT YOU NEED TO KNOW

By Sarah Brenner, JD Director of Retirement Education Most IRA distributions will be taxable. However, if you have ever made nondeductible contributions to your IRA or rolled over after-tax funds from your company plan to your IRA, then the rules can get a little bit...

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$1,512,350 IS THE NEW $1,362,800

By Ian Berger, JD IRA Analyst When you file for bankruptcy, one thing you usually don’t have to worry about is protecting your IRA funds from creditors. That’s because, in just about every case, all of your IRA (and Roth IRA) monies are off limits. Under the federal...

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NOW IS THE TIME TO MAKE YOUR 2021 IRA CONTRIBUTION

By Sarah Brenner, JD Director of Retirement Education It may be hard to believe it but the countdown to the 2021 tax filing deadline is on. The deadline is April 18, 2022, for most filers. That is really only a few weeks away. Time is running out. Is your IRA ready?...

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DECIPHERING YOUR 401(K) STATEMENT

By Ian Berger, JD IRA Analyst With many 401(k) (and 403(b) and 457(b) plans) offering multiple participant accounts, your plan statement is probably more complicated than ever. Here’s a brief primer to help you understand what each account represents: Pre-tax deferral...

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