Most 401(k) plans (as well as 403(b) and 457(b) plans) offer hardship withdrawals while you are still employed. If the withdrawal comes from a pre-tax account, it will be taxable. And, if you’re under age 59½, it will also be subject to the 10% early distribution penalty – unless one of the exceptions to that penalty applies. For example, hardship withdrawals are allowed for medical expenses.
It’s August and that means it is back-to-school time! The 2025-2026 school year is upon us. Kids are already back in the classroom and ready to learn.Any parent will tell you that back-to-school time is an expensive time of the year. You cannot afford to miss out on any possible option that may help you save to cover education costs. There are often discussions about tax credits and 529 plans savings plans, but one tool that that you might overlook is the Coverdell Education Savings Account (ESA). Here is what you need to know.
Question:I recently retired in January and rolled over a lump sum pension from my previous employer into my IRA. Next month, I'm planning to roll over my 401(k) from the same employer into the same IRA as well. Would these two actions run afoul of the once-per-year rollover rule? Thanks.
The Ed Slott team has answered literally tens of thousands of IRA and retirement plan questions over the past few years. That is not hyperbole—we track it all. The questions we’re asked run the gamut from basic to extremely complex. Most inquiries are honest and straightforward: “What is the rule about this?” “How do I do that?” and so on. On occasion, however, we get some zingers. Just off the top of my head, here are some of the craziest questions and scenarios I’ve encountered.
At Ed Slott and Company, we continually stress how important the beneficiary designation form is. Because it’s that form – and not the retirement account owner’s will or other estate planning documents – that usually dictates who will receive the owner’s IRA or 401(k) account after death.
QUESTION:I turn age 73 on December 1, 2026. I would like to do a Roth IRA conversion on January 1, 2026, prior to turning 73 years old. Does my first required minimum distribution (RMD) begin January 1, 2026, the year that I turn age 73? Am I correct that my RMD must be satisfied before a conversion?
From a tax perspective, a Health Savings Account (HSA) can offer the best of all worlds. Like traditional IRA contributions, HSA contributions are made by the individual with pre-tax dollars. Contributions made by an employer are excluded from income, like with a 401(k) plan. And, distributions are tax- and penalty-free, similar to Roth IRA earnings, if they are used for qualified medical expenses. HSA contributions are only available for those covered by a High Deductible Health Plan (HDHP).
Are the current tax brackets, made “permanent” by OBBBA, really here forever?Not necessarily. The One Big Beautiful Bill Act (OBBBA) did extend the tax rates established by the 2017 Tax Cuts and Jobs Act “permanently.” But that word has a different meaning when it comes to tax law. Yes,
Question:I am 70 years old and do not have to start taking required minimum distributions (RMDs) for three years. Can I do a qualified charitable distribution (QCD) from my IRA now? Or, do I have to wait until age 73 when I have to start taking RMDs?
A recent Slott Report article discussed “Trump accounts,” the new savings vehicle for children created by the One Big Beautiful Bill Act (OBBBA). As with most new laws, there are a number of unanswered questions about Trump accounts that need to be addressed by the IRS. Fortunately, since Trump account contributions can’t be made before July 4, 2026, the IRS should have enough time to issue guidance. Here are the some of the outstanding questions:
