News & Press

Tax and IRA expert Ed Slott on when conversions can result in the greatest tax savings—and what to know before you execute them.

What do I need to rock my financial life before year end?You’re in luck because we’re bringing in the “A” team, with great advice from two titans: Barbara Corcoran and Ed Slott

Millions of retirees will get friendly reminders from their banks and brokerages in coming weeks to take required withdrawals from their 401(k)s or other retirement accounts by the end of the year.

The annual ritual might feel particularly painful this time, with the S&P 500 down nearly 25% for the year through September.Many retirees will have to withdraw and pay taxes on a bigger percentage of their nest eggs than they might prefer, because the formula for calculating the required minimum distribution, or RMD, is based on the account’s balance at the end of last December—before the markets sagged.

Florida residents who suffered financial losses from Hurricane Ian might be able to tap their retirement accounts to cover emergency expenses, a last resort more victims of natural disasters are using.

Is there a recommended strategy for taking required withdrawals from retirement savings in this horrible market? I’m a buy-and-hold investor; normally, I would just hunker down, not look at my balances, and ride out this storm. Unfortunately, the Internal Revenue Service makes me sell stocks at the worst time. Any recommendations for this unprofitable task?

When the Covid-19 pandemic arrived in 2020, many individuals took advantage of a federal tax break and withdrew money from their retirement accounts.

If they repay the funds—which isn’t required—by next year, they’ll get another tax break, too.

If you are younger than age 59½ and want to withdraw money from your individual retirement account, there are several exceptions that could allow you to do so without incurring the 10% early-withdrawal penalty from the IRS.

One such exemption being used more often is a so-called 72(t) plan.

Doing a reverse rollover — in which money is rolled from an IRA to a 401(k) — still makes sense for clients that want to take advantage of a “backdoor” Roth IRA conversion or delay required minimum distributions, according to Ed Slott and Ian Berger of Ed Slott and Co.

For years, fewer teenagers were looking for summer jobs, opting instead to bolster their college applications with academic programs or unpaid internships. But as the economy bounced back from the pandemic, employers were almost begging for workers and some opportunities were too good to pass up.

Using your individual retirement account to give to charity is a good thing. But tax snafus can ruin the good intentions.

Traditional IRAs have long been used to make qualified charitable distributions. Eligible individuals can donate as much as $100,000 a year. Such gifts can make up part or all of the donor’s required minimum distribution, or RMD. And amounts donated to qualified charities are excluded from the donor’s taxable income for that year.