I am over age 59½ and have had a Roth IRA account for more than 5 years. Starting in 2025, I designated all of my contributions into my employer’s 401(k) plan as Roth contributions. If I decide to retire before I have met the 5-year requirement for the Roth 401(k) and roll over this balance to my existing Roth IRA account, which 5-year clock applies to those former Roth 401(k) dollars?
If you’re in a 457(b) plan and are nearing retirement, you may want to consider an often-overlooked rule that could allow you to defer twice the usual annual elective deferral limit (for 2025, $23,000 x 2 = $47,000) in the three years before retirement.
You are not alone if you have concerns that your IRA or workplace plan savings could be lost if you are forced to declare bankruptcy or wind up on the losing end of a civil lawsuit. After all, we all count on those savings for a financially secure retirement. Fortunately, there is usually some degree of creditor protection for retirement accounts. Unfortunately, that doesn’t seem to be the case for SEP and SIMPLE IRA plan funds. Those accounts may not always be protected against creditors.
Question:Recently, I’ve received dozens of emails suggesting that traditional IRA owners can convert to a Roth IRA and somehow avoid all or some tax. Is this a scam?Thank you in advance.
Like Neapolitan ice cream, most company retirement savings plans come in three flavors:401(k) plans if you work for a for-profit company or you’re a business owner with no employees;403(b) plans if you work for a tax-exempt employer, a public school or a church; and457(b) plans if you work for a state or local government.
Question:Our client is 75 years old. He just retired on January 1, 2025. The company has recognized his retirement date as being January 1, 2025.When must he take his first required minimum distribution (RMD)?Rick
Many retirement plans base employer contributions on employee compensation. For many years, Congress has limited the compensation that can be taken into account for those contributions. Fortunately, this dollar limit only applies to very highly paid employees.
The April 23, 2025, Slott Report article, "After-Tax 401(k) Contributions Shouldn't Be an Afterthought," discusses how 401(k) after-tax contributions can be moved into Roth accounts through in-plan Roth conversions, the “mega backdoor Roth IRA,” or split rollovers. This article will explain the tax implications of these strategies.
Question:At age 71, I’m not yet subject to required minimum distributions (RMDs) from my IRA or workplace retirement accounts. However, I am required to take annual RMDs from a pre-2020 inherited IRA and a pre-2020 inherited Roth IRA.
With the popularity of Roth 401(k) contributions, after-tax (non-Roth) employee contributions have gotten short shrift. But, if your plan offers them, after-tax contributions are worth considering. They can significantly boost your retirement savings and can sometimes be funneled into Roth accounts while you’re still working.
