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Last Week in La Jolla

Last week in La Jolla, California, the Ed Slott team hosted another incredibly successful 2-day advisor training program. Nearly 200 financial professionals from across the country chose to join us for some intense IRA and retirement plan education. Topics included all things Roth, net unrealized appreciation, naming trusts as IRA beneficiaries, new SECURE 2.0 updates, QCDs, 10% penalty exception rules, creditor/bankruptcy protection rules, and the list goes on.

THE PRO-RATA RULE AND INHERITED IRA RMDS: TODAY’S SLOTT REPORT MAILBAG

Question: I was given your information by a financial advisor who follows your articles. I have a unique situation with a client who is a high earner with several old 401(k) accounts. My idea was to have her fund an IRA with a contribution for 2023 and 2024. Then I was going to have her do the Roth conversion with no tax liability. She currently has no IRAs. My question is: If I roll over her 401(k)s later in 2024, would she still be subject to the pro-rata rule? When I contacted my back office, they said that at the time of conversion she will not have an IRA, so she should be all set. However, my thought is that the pro-rata rule applies on a calendar year basis, so she would be subject to the pro-rata IRA rule.

Ghost vs. 5-Year: The Calendar Dictates

Ever since the SECURE Act created a 10-year payout rule for most IRA beneficiaries, that topic has garnered the bulk of conversation. This is understandable. Not only was the 10-year rule a brand-new payout structure, but questions swirling around application of the 10-year window remain unsettled.

529 Plans and Inherited IRAs: Today’s Slott Report Mailbag

Question: I have two questions regarding the 15-year requirement that applies to new rules allowing rollovers from 529 plans to Roth IRAs. If you change beneficiaries, will it reset the 15-year clock? Secondly, if you roll your 529 plan into another 529 plan (say Virginia plan to Nevada plan which also involves a change in custodians), does this reset the 15-year clock?

529 Plans and Inherited IRAs: Today’s Slott Report Mailbag

Question: I have two questions regarding the 15-year requirement that applies to new rules allowing rollovers from 529 plans to Roth IRAs. If you change beneficiaries, will it reset the 15-year clock? Secondly, if you roll your 529 plan into another 529 plan (say Virginia plan to Nevada plan which also involves a change in custodians), does this reset the 15-year clock?

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