• Rothification?

    October 16, 2017
    Rothification?

    Rothification is a term that is being tossed around a lot as tax reform takes center stage in Congress. What does Rothification mean? Proposals vary but, basically, it’s the idea of eliminating tax deductions and deferrals for retirement savings and instead mandating after-tax contributions with a payoff of tax-free earnings down the road. This is how Roth IRAs and Roth 401(k)s work so hence the[...]

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    Are You Over 70.5 Years Old and Still Working? Take Advantage of These Benefits: This Week’s Q&A

    This week's Slott Report Mailbag looks into 403(b) plans, RMDs, still-working exceptions, and trusts. 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 in regards to taking an RMD from a 403(b) account. My client is still working, but only part-time for 10 hours per week. Does it [...]

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    October Retirement Deadlines

    October 11, 2017
    October Retirement Deadlines

    In a post last week, we talked about the Roth recharacterization deadline which is fast approaching. October 16, 2017 is the last date to recharacterize a 2016 Roth conversion. Another important deadline that is coming up is for trusts that became the beneficiaries of retirement assets in 2016. A qualifying trust can use the life expectancy of the oldest beneficiary of the trust to calculate [...]

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    Penalty-Free Retirement Account Distributions Now Available to Hurricane Victims

    Millions of Americans were affected by Hurricanes Harvey, Irma, and Maria. You may be one of them. If you are, there is some encouraging news. On September 29, President Trump signed H.R. 3823, the “Disaster Tax Relief and Airport and Airway Extension Act of 2017” into law. The new law provides a package of tax relief for Hurricane victims, including a provision that allows penalty-free [...]

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    Are You Over 70.5 Years Old and Still Working? Understand Your Options With RMDs: This Week’s Q&A

    This week's Slott Report Mailbag examines RMDs when you are still working past 70.5 years old and inheriting multiple 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 read some of your other articles, but I haven’t seen an answer to this question. I am 73 years old, still working, [...]

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    A Tale of 3 Cousins and Their Inherited 401(k) Plans

    This is the story of Al, Bob and Carl. Each cousin is the non-spouse beneficiary of his father’s 401(k) plan. Their fathers worked together at the local automotive factory for their entire lives and were all covered by the same plan. The default distribution option in the plan for non-spouse beneficiaries is a five-year payout. Al’s Story Al’s father named Al on the beneficiary form [...]

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    8 Things to Know Before the October 16 Recharacterization Deadline

    Did you convert your traditional IRA to a Roth IRA in 2016 and now you are reconsidering that move? Did you make a 2016 traditional IRA contribution and later discover the contribution was not deductible? Did you contribute to a Roth IRA, not knowing that your income was above the limits for eligibility? If you answered, “yes” to any of these questions, there is a deadline rapidly approaching [...]

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    Do You Know All the Rules for Rolling Over a Roth 401(k)?

    This week's Slott Report Mailbag examines 401(k)s, Roth 401(k)s, and spousal beneficiary rules. 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 getting Ed Slott and Company’s emails for a few years now. They are very informative. I have not seen this question yet. I also looked through[...]

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    Divorce, IRAs, and a Twist

    September 27, 2017
    Divorce, IRAs, and a Twist

    Many times when individuals divorce the IRA is split between the spouses. This is done through the divorce decree or separation agreement. An IRA is never split using a qualified domestic relations order (QDRO). That is only used for splitting employer plans, such as 401(k)s. The paperwork should be very clear on the details of the split. Generally, a percentage is the best way to go. It will[...]

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    What If You Could Pay Health Care Costs in Retirement with Tax-Free Dollars?

    As medical expenses continue to increase, planning for them in retirement takes on greater importance.  One approach is to shift thinking of the Health Savings Account (HSA) as an account to defray medical expenses annually to an account with pre-tax dollars and tax-free earnings to defray medical expenses years from now in retirement. Consider this planning strategy to help insulate your [...]

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    How Your Inherited IRA is Taxed

    September 25, 2017
    How Your Inherited IRA is Taxed

    Have you inherited an IRA? What type of IRA is it? Your answer will matter a lot when it comes to your tax bill. Inheriting a traditional IRA will have very different tax consequences than inheriting a Roth IRA. Consider the following example. Let’s say Tom named his three children as beneficiaries of his three-million-dollar traditional IRA. He never made any nondeductible contributions. [...]

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    Retirement Plan Checks and 60-Day Rollovers

    Generally, when you receive a check from your IRA custodian or employer plan, you have 60 days to rollover the funds to another retirement account, either an IRA or an employer plan. As with most retirement plan rules, this rule comes with two exceptions – one good and one bad. Let’s look at what happens when Lori receives a check. Checks Payable to the New Retirement Account A check [...]

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    10 Things You Must Know about HSAs

    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 [...]

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    When You're 70 1/2 Avoid These Disastrous Mistakes

    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 [...]

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    5 Ways to Avoid the Time and Expense of Probate

    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[...]

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    Q&A: Significant Concerns with Inherited IRAs, International Beneficiaries & More

    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 [...]

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    Year-End Retirement Account Q & A

    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.[...]

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    2016 Year in Review for Retirement Accounts

    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 [...]

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    The Continued Battles with Inherited IRAs, PSPs, and Rollovers

    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 [...]

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    Your 2016 H-O-L-I-D-A-Y Season Action Plan

    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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