Question:
Hi,
In a recent blog post, you addressed the complicated rules for a 401(k) to Roth IRA rollover. I have a similar question as it relates to a pre-tax IRA conversion to a Roth IRA.
Hello,
If a person is turning 73 years old in March, s/he would be required to take required minimum distributions for the year. Can a person do Roth Conversion prior to turning age 73 (say in February)? Does the first money out rule still apply?
More and more 401(k) plans are making Roth employee contributions available, and employees leaving their jobs often want to roll over Roth 401(k) funds to a Roth IRA. What tax rules apply to distributions of amounts rolled over? Warning: The rules are complicated because they involve two five-year holding periods, one for the Roth 401(k) distribution and the other for the Roth IRA distribution.
You probably know there’s a limit on the amount of pre-tax and Roth contributions you can make to your company savings plan each year. The 2025 elective deferral limit is $23,500 for 401(k), 403(b) and 457(b) plans and is either $16,500 or $17,600 for SIMPLE plans (depending on the size of your employer). If you’re age 50 or older, you can make additional catch-up contributions beyond these limits, and if you’re age 60, 61, 62 or 63, you may qualify for even higher catch-ups.
QUESTION:
My wife has two after-tax traditional IRAs at two separate institutions. We are hoping to consolidate them, then convert to a Roth in the next 18 months. She is already retired. She also has an inherited IRA (from her father). Does the calculation for taxation on the conversion to Roth need to include the assets in the inherited IRA? Do assets in my IRA have any impact on the calculation?
By Sarah Brenner, JD Director of Retirement Education The year 2025 is upon us! There is no doubt that this...
Question:
Can a person do a rollover from both his traditional AND Roth IRAs in the same twelve months?
Best regards,
Matthew
Roth IRA conversions remain as popular as ever. However, based on some recent questions we’ve received, it is apparent that folks don’t fully understand all the nuances of this transaction. Here are some of the basic concepts and items of consideration:
Question:
For a non-spousal inherited roth IRA account, there seems to be contradictory advice on different websites about when to take distributions. Some say there are annual required minimum distributions (RMDs) within the 10 years; others say you can wait until the 10th year for a lump sum. If you can wait and don't need the money, wouldn't it be wiser to wait until the last year since the money compounds tax free and the final lump sum distribution would also be tax-free?
October 15, 2024 has come and gone. This was the deadline for correcting 2023 excess IRA contributions without penalty. If you missed this opportunity, you may be wondering what your next steps should be. All is not lost! While you may not have avoided the excess contribution penalty for this year, you can still correct the issue for future years.
