QUESTION:I have a client where we did a 60-day rollover this past January. The proceeds were put back into the account in less than 60 days. The client has asked me to rollover the 403(b) plan he’s had sitting with his former employer. Is this a second rollover violating the once-per-year rollover rule?
An advisor called to discuss Roth IRA conversions. His new client made some decisions before speaking with him, and he was trying to untangle her self-inflicted knot. She was 69 years old, a single tax filer, still employed, and had a $1 million traditional IRA. Based on advice from her brother (who is not a financial professional), she had already ripped through Roth conversions of $200,000 for both 2021 and 2022. The brother’s only consideration in making his recommendation was, “The market is down.”
August is winding down and September is just around the corner. That means that it is back to school time! Education can be expensive. This year, with inflation raging, that seems even more true than ever. If you have children looking to further their education, you will need to explore every possible option out there that can help you save. One savings tool that many parents overlook is the Coverdell Education Savings Account (ESA).
Question:Hi,My wife (68) inherited a traditional IRA and a Roth from her sister (71) in 2021. Both accounts have been moved to inherited IRAs.I’m trying to do some tax planning. Can you please confirm the following from my confusing research?
Here’s a line from one of the manuals we use in our education seminars for advisors: “Missed stretch IRA RMD by an EDB, when the IRA owner dies before the RBD.”An old baseball expression says: “You can’t tell the players without a scoreboard.” In the world of retirement accounts, you can’t understand the rules without knowing the abbreviated terms. Here’s 18 common ones you should know:
Lifetime required minimum distributions (RMDs) start in the year when an IRA owner turns 72. (Technically, the “required beginning date” for RMDs is April 1 of the year after a person turns 72.) Once begun, RMDs must be withdrawn annually on a calendar year basis. If you miss an RMD, the penalty is steep – 50% of the amount not taken.
Question:When converting an IRA to a Roth IRA, do the investments (stocks, bonds, ETFs, etc.) have to be sold or can they be transferred directly from the IRA into the new Roth account?
Are you nearing retirement age and not looking forward to taking unwanted required minimum distributions (RMDs) from your retirement account? You may be looking for a strategy to delay those distributions. The “still working” exception allows RMDs to be delayed. Will this exception help you? Here is what you need to know.
If a retirement account transaction becomes a taxable distribution, you probably know you will owe taxes and possibly the 10% early distribution penalty (if under age 59 ½) on the distribution. But what you may not know is there might be an unexpected surprise. On top of the additional taxes and 10% penalty, you might also be liable for what’s called the “accuracy-related penalty.” Here’s what you need to know about this unpleasant revelation.
Question:My husband is the sole beneficiary of a Traditional IRA owned by his cousin, who recently passed away. From my research, I believe my husband fits the exception criteria of "eligible designated beneficiary" in that he is not more than 10 years younger than the deceased (he is 9 years younger…he is age 72 and the deceased was age 81). As such, from what I read, he does not have to empty the inherited IRA account within 10 years and can withdraw his RMDs using the stretch IRA method.
