401(k)

Restrictions on 401(k) In-Service Withdrawals

Congress designed 401(k) plans as retirement savings vehicles – not as checking accounts. So, there are restrictions on when employees can make “in-service withdrawals” (i.e., withdrawals while still working).It’s important to remember that while 401(k) plans must abide by these withdrawal rules, plans are free to impose even more restrictive rules. So, you’ll need to check your plan summary or ask your plan administrator or HR rep for the particular withdrawal rules that apply to you.

Making Sense of the 401(k) Multiple Plan Limits

We continue to get lots of questions about the company savings plan contribution limits. There are actually two different contribution limits – the “deferral limit” and the “overall limit.” This makes things very confusing, especially if you’re in multiple plans at the same time or you change jobs in the middle of the year.

401(k) Plans & IRA Custodians: Today’s Slott Report Mailbag

Question:If you are an employee who participates in a 401(k) who retires at age 73, do you have to take an RMD in the year you retire, or can you take your RMD by April 1 of the year following retirement? If you can take your RMD by April 1 of the following year, does that mean you have to take two RMDs in that year?

ROTH CONVERSIONS & 401(k) RMDs: TODAY’S SLOTT REPORT MAILBAG

Hi! I attended the February 2021 IRA seminar and had a question re: Roth conversions. he seminar discussed rolling over assets held in a company plan into a Roth IRA. I’m dealing with a client that wants to roll over a lump sum from a state pension plan into a Roth IRA. Can you tell me if in your experience this is generally permitted (assuming tax is paid on the conversion amount)?

The IRS May Be Coming After Your Solo 401(k) Plan

If you sponsor a solo 401(k) plan, beware!The IRS recently announced that it is targeting several employer plan areas for stepped-up auditing. One of those areas is solo 401(k) plans.The fact that solo plans made the list is a signal that the IRS believes there are widespread compliance issues with these plans. While solo 401(k) plans don’t have as many rules to follow as employer-based 401(k) plans, there are still several requirements. The IRS announcement should be a warning to business owners with solo plans to make sure they are obeying those rules.

Active Participation and IRA Deductibility

This question (or a derivation of it) has been popular as of late: “I only participated in my 401(k) for a couple of months in 2020 before I was laid off. Does that still make me a ‘covered’ employee, and can I contribute to my Traditional IRA?”It seems innocent enough, but there is a heck of lot going on in this little question.

Can I Still Open Up A New Solo 401(k) for 2020?

We’ve been getting a number of questions lately about whether it’s too late to set up a new solo 401(k) plan for 2020.The answer is “sort of.”Business owners with no employees (other than a spouse) can contribute to a solo 401(k) plan. Solo plans are typically used by sole proprietors but are also available if your business is incorporated or structured as a partnership or LLC.

House Rules

Casinos have house rules. These rules dictate what patrons can and cannot do. They are often written down, posted, and there is no debating the validity of said guidelines. House rules govern all those under the purview of management. I have house rules of my own when it comes to card games, darts, boardgames and any other source of competition. House rules can also apply to non-competitive situations. No swearing. Take your shoes off. Don’t sit on the good furniture in the living room.

When a “Reverse Rollover” Makes Sense

When we think of rollovers, we normally think of moving funds from a 401(k) (or other company plan) to an IRA. But it sometimes makes sense to consider a “reverse rollover” – from an IRA to a 401(k).

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