The year 2025 has been a turbulent time for the economy. Whether due to job loss or persons seeking better investment opportunities in volatile markets, retirement account funds are on the move more than ever. Fortunately, portability between different types of retirement accounts has expanded, creating more options for those relocating their money.
You are not alone if you have concerns that your IRA or workplace plan savings could be lost if you are forced to declare bankruptcy or wind up on the losing end of a civil lawsuit. After all, we all count on those savings for a financially secure retirement. Fortunately, there is usually some degree of creditor protection for retirement accounts. Unfortunately, that doesn’t seem to be the case for SEP and SIMPLE IRA plan funds. Those accounts may not always be protected against creditors.
If a person under age 59½ takes a withdrawal from his IRA or workplace plan, there is a 10% early withdrawal penalty…unless an exception applies. There are currently 20 exceptions, with a 21st on the way. Here are those exceptions, with some brief commentary.
We continue to get lots of questions about the new “super catch-up” contribution for retirement plan and SIMPLE IRA participants who are ages 60-63.
Here are answers to your top 12 questions:
Question:
Dear Ed Slott and America’s IRA Experts,
I have a rollover traditional IRA that was set up when I left my last job. I am no longer employed, so I don’t have any earned income. My husband works full time, and our filing status is married filing jointly.
Question:
I just inherited an IRA from my sister. She died at age 74 and I am age 78. Am I required to use the 10-year rule, or can I stretch distributions from the inherited account over my life expectancy? I am hearing conflicting information as to what my options are.
The deadline for most retirement account owners to take their 2025 required minimum distribution (RMD) is December 31, 2025. However, there are good reasons why you should take your RMD now instead of waiting.
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.
By Ian Berger, JDIRA Analyst One of the more controversial rules in the 2022 SECURE 2.0 Act is the requirement...
By Ian Berger, JDIRA Analyst Question: I am planning for a required minimum distribution (RMD) from both my IRA and...
