Ed Slott, an author and IRA and retirement plan expert, agrees that the penalties can likely be waived, especially if the taxpayer is acting in good faith.
“More people are putting more money away, which is great, but I think a lot of them are putting it in the wrong place, in a 401(k) rather than a Roth,” said CPA and retirement expert Ed Slott. While 401(k)s allow workers to contribute pre-tax income, the funds are subject to taxation when withdrawn; Roth funds are taxed beforehand….
Ed Slott, America’s foremost IRA expert and founder of the Elite IRA Advisor Group, joins host, Dave Alison, as he explores the “retirement tax time bomb.” Learn why the SECURE Act represents one of the most significant shifts in retirement planning history and how advisors can position themselves to deliver extraordinary value during this transition.
Ed Slott joins Michael Kitces to share the never-before-told origin story of how he became “America’s IRA Expert.” From taking over a dying CPA firm to risking his last $5,000 on a newspaper ad, Ed reveals how he built a national brand by specializing in IRAs and
unapologetically charging premium fees for premium value. This episode offers rare insight into
the mindset, marketing, and mission behind Ed Slott and Company.
The Internal Revenue Service has added a tax reporting code on Form 1099-R for qualified charitable distributions — a welcome change, according to Ed Slott of Ed Slott & Co.
But Slott cautions that racing to convert a traditional IRA to a Roth IRA when the market tanks can be tricky. “You can’t time it,” he said.
“I have heard stories already from people who said, ‘Oh, the market was down 2,000 and the next day it was down a thousand, so I’m going to convert now.’ And by the time the order was processed, it was up 3,000.”
His advice: Do a series of smaller annual conversions over time, or even monthly and keep in mind that Roth conversions are permanent. “There are no backies, no do-overs. This has got to be a planned event,” he said.
While House Republican lawmakers approved a Senate-passed budget outline, “the details still need to be ironed out,” according to Ed Slott of Ed Slott & Co., and the “actual tax and spending provisions are as yet unknown.” But generous gift and estate tax exclusions as well as standard deductions would likely continue, Slott said.
Ed Slott, a Rockville Centre-based financial and retirement adviser, said while Thursday’s drop is a “massive hit for one day,” now is not the time to divest or sell.
“The thing to do is nothing,” Slott said. “You don’t lose unless you sell. Nobody should be selling or running out of the market.”
Industry veterans Ed Slott and Ric Edelman are counseling advisors and their clients to stay the course after markets plunged Thursday on news that President Donald Trump imposed tariffs of at least 10% on all imports.
“On days like this — and [Thursday’s] may be a record decline — it’s best to do nothing,” Slott of Ed Slott & Co., told ThinkAdvisor in an email.
Tax-free income in retirement isn’t the Roth account’s sole selling point.
