Question:I read your November 29, 2017 explanation of rollovers and the time limitations. But my issue is still unclear to me.In December 2018, my husband made a transfer from his 401(k) to an IRA to a Roth IRA. We intended to do the same this year, but an unexpected bill hit us, and we took a distribution from the 401K two weeks ago. Taxes were taken out. The bill turned out to be much less than expected and so, we would like to roll over the distribution into his existing Roth account. Since the December one was a transfer and this one would be a 60 day rollover, is it permitted? And if so, can we do another transfer in a few months?Thank you in advance.NinaAnswer:Hi Nina,You are wise to be concerned about the timing of your transactions, but you should be OK.The IRS has a “once-per-year rule” that limits anyone from making more than one IRA rollover in any 12-month period. (The 12-month period is not a calendar year.) Violating this rule could cause serious tax consequences.
Many of you who participate in a company retirement plan may have heard that the plan is “qualified” or “tax-qualified.” That sounds reassuring, but what exactly does it mean? In other words, what qualifies a qualified plan to be qualified? (And, while we’re at it, how much wood can a woodchuck chuck …?)The carrot and the stick: The concept of a qualified plan resulted from Congress’s desire to incentivize companies to establish retirement plans. So, Congress enacted certain tax breaks for employers who set up those plans, but required the plans to satisfy a number of rules designed to make sure the plans don’t take advantage of rank-and-file workers. Here are the most important of those rules:
Question:I have read your updates and shared information regarding the SECURE bill that is in the Senate currently. The information discusses the non-spouse beneficiaries of IRAs will need to take distributions over 10 years as a lifetime stretch will not be an option anymore.Do you have any information on existing Inherited IRAs that are already in the stretch phase? My wife inherited an IRA in 2007 and we are stretching it over her lifetime. Does the bill grandfather existing and focus on future inherited IRAs? I realize we will not know the final answer until the bill is passed by both chambers and signed by the President, but wondered if you had any preliminary information.
When driving your car, most of the time you’re going forward. But sometimes, like when you back into a parking spot in anticipation of beating the traffic after a sporting event or concert, you must shift gears to reverse.So it is with rollovers between 401(k) plans (or other employer plans) and IRA’s. Most of the time you’ll be considering a rollover from the 401(k) plan to an IRA. But sometimes it makes sense to consider a “reverse rollover” – from an IRA to a 401(k).
‘Tis the season for bee stings and mosquito bites.Just like those summer irritations, 401(k) plan loans have their own annoying rules that can make them risky transactions. Fortunately, a provision of the 2017 tax reform law applied a little hydrocortisone to help relieve the itch.One advantage that 401(k) plans have over IRA’s is that 401(k)’s (as well as many other employer-sponsored plans) can allow participants to borrow against their accounts. 401(k) plans are not required to allow loans, but most do.
With the year half over, it’s prime time to huddle, refocus your team and commit to reaching your 2019 goals—for your clients and your advisory business.Here are 7 strategies advisors can leverage now to notch a win for clients in the 2019 retirement planning game:1. Analyze the Film: Review 2018 Tax Returns The 2018 tax season is now over for most taxpayers, and it has been a learning experience for many. This is the first time both advisors and clients will know the actual effects of the Tax Cuts and Jobs Act. Review clients’ 2018 returns and use these results to plan for 2019. Assess the effect of the Qualified Business Income (QBI) Deduction on 2018 tax returns to plan for 2019 results. Did retirement plan contributions affect the client’s QBI deduction or their tax bracket?
Happy 4th of July to all the loyal readers of the Slott Report! This summer holiday is a time for barbeques. This is a time when all ages come together to celebrate. Families will gather to grill hot dogs, roast marshmallows and watch fireworks. If the conversation around the grill should happen to turn to retirement savings, here are 4 IRA tips, one for each generation of guests, to share while you celebrate:It’s never too early to start to save. Here is a tip to share with younger guests who might be just starting their careers. With student loans and the high cost of housing, the last thing on a millennial’s mind is saving for retirement. However, when it comes to retirement, young people have a huge advantage – time.
Question:Your advice, articles, publications and books I’ve purchased over the years have been great and most informative. Great job! My question is with regards to NUA – I retired recently (age 66) and had a company 401(k) to which I contributed over the years and will likely not make any withdrawals until required RMD’s. Within the company 401(k) plan I invested in selected bond funds, stock funds, small cap, a value fund, target funds, mid cap funds, international funds and our company stock fund option. (Some of the company stock I purchased and some was a company gift over the years).
he road to retirement is long. Along the way you may need or want to move your retirement funds. Maybe you are leaving a job or maybe you are just looking for a new investment strategy. When the time comes to make a move, you will want to be sure that everything is done correctly. Rolling over retirement funds can be tricky and the consequences of a mistake can be serious. Here are 6 things about rollovers that every IRA owner needs to know.1. How rollovers workA 60-day rollover starts with a distribution from a retirement plan payable to you. The distribution can be from a company plan or an IRA. You will have receipt of the funds.
Every single month since January of 2014, Billy Joel has headlined a sold-out show at Madison Square Garden. Demand for tickets to see the Piano Man has not waned. Ticket sell out quickly. Millions of fans will attest that Billy Joel, who’s music career spans decades, still puts on an incredible show.It’s hard to believe that Billy Joel just recently celebrated his 70th birthday on May 9, 2019. We don’t know for sure that Billy has an IRA, but if like millions of Americans he does, then 2019 is an important year for him.
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