Many Americans are still working long beyond what has traditionally been retirement age. This may be a choice or a necessity. If this is your situation, you may be keeping funds in your employer plan well into your seventies and maybe even later. This can bring big benefits. You can still make contributions to your retirement account, and you may even be able take advantage of the “still-working exception” that allows required minimum distributions (RMDs) to be delayed.
Question:Can an RMD from an inherited IRA be taken out of you own traditional IRA?Jack
The Investment Company Institute (ICI) is an association representing mutual fund companies and similar investment companies. Recently, the ICI issued the results of a survey on traditional and Roth IRAs.
When moving retirement money from IRA to IRA, or from a workplace retirement plan like a 401(k) to an IRA, there are essentially three methods to relocate those dollars. Two of them are similar, and the third opens all kinds of potential problems. Knowing how to properly move retirement dollars is imperative to produce the desired outcome.
Question:Someone participates in a 401(k) through his regular employer and has a solo 401(k) for a side job (self-employed). That person maxed out his 401(k) pre-tax deferrals for 2021 through the regular 401(k) and utilized the remaining limit up to $58,000 for a Mega Backdoor Roth contribution via after-tax contributions. Is he eligible for any solo 401(k) contributions for 2021 (not catch-up eligible)? What am I missing here?
Back in 2020 when COVID first became our new reality, Congress enacted the CARES Act. The CARES Act allowed qualified individuals who were affected by COVID to take penalty-free distributions from their retirement accounts of up to $100,000. The taxation on these distributions could have been paid in 2020 or spread over three years.
Like most everything else these days, the price for receiving an IRS private letter ruling (PLR) has recently gone up.A person will request a PLR to receive the IRS’s blessing that a specific tax transaction won’t violate the tax code or IRS regulations. A PLR is specific to the particular tax situation of the person requesting it. This means that PLRs shouldn’t be relied on by anyone other than that person.
Question:Is there a required minimum distribution (RMD) on a self-directed IRA?Answer:A “self-directed IRA” is nothing more than an IRA that invests in unconventional items that not all custodians will handle – like maybe crypto currency, real estate, or a hard-to-value assets. Otherwise, self-directed IRAs follow the same rules as every other IRA. As such, yes, self-directed IRAs do have RMDs.
Conduit IRAs, sometimes called “rollover IRAs,” typically contained only money rolled over from a company plan - and subsequent earnings on those dollars. But a 2001 tax law (Economic Growth and Tax Relief Reconciliation Act of 2001) opened all sorts of rollovers and plan portability. So, for the most part, a person could commingle his IRA contributions and rollovers from plans in the same IRA. The result was that, beginning in 2002, conduit IRAs were no longer necessary for most people rolling over plan funds.
A qualified charitable distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity income-tax free. If you are thinking this might be a good strategy for you, here are 4 QCD rules that may surprise you.
