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.
Question:
If your employer contributes to either a SEP IRA or a SIMPLE IRA, can you (the employee) also contribute to a Roth IRA?
Regards,
Alfred
Are you moving assets between IRAs or from a company plan to an IRA (or vice-versa)? You should know that using a direct transfer is a much better idea than doing a 60-day rollover. Direct transfers avoid all of the possible issues which can occur with 60-day rollovers:
By Ian Berger, JDIRA AnalystFollow Us on Twitter: @theslottreport What if you have an IRA with your spouse as primary beneficiary,...
Question:
I am 72 years old and have a Roth IRA. I have some extra cash in a bank account. Can I put that into my Roth IRA and how much can I contribute for 2021?
In the August 16, 2021 Slott Report, we showed that someone participating in a 401(k) plan through a “regular” job could also establish a solo 401(k) plan through a side job and potentially contribute up to $58,000 this year in after-tax contributions to the solo plan. However, this only works if the company sponsoring the regular 401(k) plan and the entity sponsoring the solo 401(k) (e.g., a sole proprietor) are considered unrelated under IRS rules.
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.
Question:
Can you put funds into a Roth IRA for a 14 year old using money you have paid the child for doing chores?
Client was told all he needed to do was keep a record of what was paid by to the child.
I have always enjoyed your presentations.
Thank you,
Cathy
Suppose you inherit 401(k) (or other ERISA plan) funds and then file for bankruptcy before receiving those funds. Can you lose those 40(k) dollars to your bankruptcy creditors? According to a recent decision of a Bankruptcy Court in North Carolina, you don’t have to worry.
It’s that time of the year! College bills for the Fall semester are arriving, and you may be thinking of tapping into your retirement savings to help with the costs. If you’re under age 59 ½, be careful. Your withdrawal may be subject to a 10% early distribution penalty unless you are able to take advantage of an exception to that penalty. (Remember that, even if you qualify for the exception to the penalty, distributions from traditional IRAs will be taxable.) Here’s what you need to know about the higher education expense exception:
