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This week's
Slott Report Mailbag talks about an "educational" IRA (a popular topic during graduation season), how to value non-spouse inherited IRAs and whether a retired individual can go through with a Roth conversion. Click to read this week's Q&A with our IRA Technical Expert.
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This past Monday, our nation celebrated Memorial Day, a day dedicated to honoring the brave men and women who have lost their lives while serving in our Armed Forces. While no financial benefit can ever console or adequately compensate the families of those who have made the ultimate sacrifice, when a member of the Armed Forces dies, his or her loved ones are often the beneficiaries of a Service member’s Group Life Insurance (SGLI) policy. Click for more details about this policy and how it affects the families of those who served their country.
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If you’re thinking about moving your IRA funds to a different IRA custodian, generally the better way to do it is by transferring the funds directly to another financial institution. IRA-to-IRA transfers are often called direct transfers or trustee-to-trustee transfers. In a direct transfer between IRAs, you don’t have use or control of the IRA money while it’s being moved between two financial institutions. A benefit of using direct transfers between IRAs is that transfers do not have to follow the IRA 60-day rollover rules.
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There are several ways you can end up with a missed required distribution and a pile of penalties and tax-time confusion. We detail each of them below.
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In lieu of today's Slott Report Mailbag, we wanted to share an important study from EBRI on IRAs and Roth IRAs. Ed Slott was contacted and extensively interviewed on the report's findings. Below, we will break down the important numbers as well as Ed's detailed analysis on what it all means in the retirement planning landscape.
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IRA valuation is critical when determining your required minimum distributions (RMDs), which are based on the prior year-end fair market value (FMV) of IRA assets. It is also critical for Roth conversions, because the resulting tax bill is based on the FMV of your IRA assets on the date of your conversion. Valuing certain deferred annuities owned inside your IRA can be tricky, though. We explain in more detail below.
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Our
Roth Conversion Week detailed many facets of the Roth conversion conversation ("Is a Roth conversion right for me?"), the advantages and disadvantages of conversions into Roth IRAs and Roth 401(k)s and finally, the Top 10 Roth conversion mistakes you should avoid.
We end Roth Conversion Week with a list you never want to be on. Roth conversions are powerful, tax-free retirement vehicles if handled correctly, but if a mistake is made, you may owe a good portion of your hard-earned savings to taxes and penalties. Here's a list of the Top 10 Roth IRA (and conversion) mistakes you must avoid.
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This special edition of
The Slott Report Mailbag answers several of the common Roth conversion questions we receive - from the beginning "conversion conversation" to the actual conversion process. Click to read this week's Q&A with our IRA Technical Expert.
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You’ve had "the conversion talk" and have decided that a Roth conversion is in your best interest. Now you have a choice ... should you convert your existing 401(k) money to a Roth 401(k) – your plan must have adopted this voluntary feature in order for you to do so – or should you make a conversion to a Roth IRA? While on the surface these two types of accounts are very similar – they both, for example, offer the prospects of tax-free growth and future distributions – there are a number of subtle, and not so subtle, differences that may make one type of conversion far more beneficial for you than the other. With that in mind, here is a summary of some of the most important factors to consider when making this decision:
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