Question:
Hi,
I turn 72 this year and have to take my first required minimum distribution (RMD). I am also in the process of converting most of my IRA into a Roth IRA. I know I have to take my RMD first before the conversion. Since this is my first year of RMDs, I know one of the options is to delay the RMD until April of next year.
Less than two weeks into the new year seems like a good time to provide a few reminders and warnings when it comes to Qualified Charitable Distributions (QCDs). As a quick refresher, remember these QCD facts:
Only available to IRA (and inherited IRA) owners who are age 70½ and over.
Capped at $100,000 per person, per year. (For a married couple where each spouse has their own IRA, each spouse can contribute up to $100,000.)
In 2021, the Slott Report produced roughly 100 diverse retirement-related articles and answered approximately 100 reader questions in our weekly Mailbag. We do our best to present topical IRA and retirement plan issues in the most creative, interesting, and informative manner. We hope you enjoyed the content and learned some new things.
Question:
Hi Mr. Slott:
I enjoy your website's very helpful information! I know that the IRS rules limit us to one indirect (60-day) IRA rollover every 12-month period. Are Health Savings Account (HSA) indirect rollovers counted as one of these rollovers, or are the IRA and HSA once-per-12-month rules separate?
A “life hack” is any trick, shortcut or simple and clever technique for accomplishing a familiar task more easily and efficiently, in all walks of life. For example, tie a colorful ribbon to your luggage to make it more easily identifiable on the airport conveyor belt. Life hack!
My November 29 Slott Report entry was titled “The Pro-Rata Rule Explained – You are Not Getting Taxed Twice.” I closed that article by stating there are exceptions to the pro-rata rule and ways to clean up an IRA that contains a mix of pre-tax and after-tax dollars (basis). Included here are three exceptions to pro-rata and how IRA owners could potentially “isolate basis” – reduce an IRA to only after-tax dollars, thereby setting the stage for a tax-fee Roth conversion.
Question:
Good afternoon, Mr. Slott. I am trying to complete my taxes for last year, and the tax agent is stating that, because I had two 401(k) rollovers (each from a different employer), that I would be charged a penalty for one of these.
SCENARIO: Teddy, age 60, has an existing Traditional IRA with a current balance of $93,000. This is all deductible, pre-tax money. Teddy would like to contribute to a Roth IRA, but his income level exceeds the Roth IRA income threshold. To skirt this problem, Teddy makes a 2021 $7,000 non-deductible contribution to his Traditional IRA with the idea to then covert the $7,000 as a Backdoor Roth.
As we careen into the holiday season, there remains a deceitful underbelly of dirtbags operating their typical scams. Giant inflatable Christmas decorations in front of your home or a menorah in the window will not dissuade criminals from working a dishonest angle. “Good cheer” is the perfect cover for bad deeds. (See: The Grinch.)
Question:
When calculating my required minimum distribution (RMD) amount, is my Roth IRA balance added to my traditional IRA balance? I understand I don’t have to withdraw from my Roth - just want to know how RMD’s are calculated.
Thanks
