Think Advisor

Whether a client’s retirement dreams are five years away or 50, the single greatest threat standing in their way is taxes, warns Ed Slott of Ed Slott & Co.

The right tax management strategy can save clients hundreds of thousands of dollars, while the wrong strategy — or no strategy at all — can bring undue hardship during their golden years.

The Labor Department is “going all-in on the IRA rollovers” with its final fiduciary rule, according to Ed Slott of Ed Slott and Co.

As 2023 winds down, Ed Slott of Ed Slott and Co. reminds advisors that staying on top of the latest retirement and tax-related developments is ”the best way of putting the client’s interest first.”

Advisor recommendations on IRA rollover transactions are fiduciary advice under the Labor Department’s proposed new fiduciary rule, and “would fall within the scope of investment advice,” according to Ed Slott of Ed Slott & Co.

Advisors are “getting hammered” with one big year-end tax question from clients now, according to IRA and tax expert Ed Slott: Do I have to take a required minimum distribution for 2023?

While it “sounds simple,” Slott of Ed Slott & Co. relayed, RMDs “are confounding advisors this year like never before.”

Advisors should take advantage of today’s low tax rates — and “do Roth conversions while taxes are on sale!” according to Ed Slott of Ed Slott & Co.

Every advisor, Slott told ThinkAdvisor Tuesday, “should be having this conversation with their clients. This may only last for the next three years (2023, 2024, and 2025). After that, tax rates are scheduled to revert back up to previous levels.”

This week, President Joe Biden released a proposed federal budget that would raise taxes on the wealthiest Americans to help address the solvency of key federal government entitlement programs such as Medicare and Social Security.

While a recent Investment Company Institute survey indicates that contributions to IRAs are low — likely because IRA rules are “complicated” — advisors are also confused about the rules, according to IRA and tax expert Ed Slott of Ed Slott and Co.

The new provision in the Setting Every Community Up for Retirement Enhancement (Secure) 2.0 Act allowing unused 529 plan funds to be rolled into Roth IRAs, which becomes effective in 2024, includes “lots of limitations,” according to IRA and tax expert Ed Slott of Ed Slott and Co.

As a financial planning concept, the subject of tax diversification is relatively simple: It means utilizing a number of different types of investing and savings accounts that are taxed differently for federal and state income tax purposes.

But, as explored in the latest episode of the Great Retirement Debate podcast hosted by Ed Slott and Jeff Levine, putting the concept of tax diversification into practice is anything but simple, especially when it comes to planning for retirement.