Hello Ed,I have faithfully read the Slott Report for a long time. I must thank you for sharing your knowledge. However, it is finally my turn to write you with a question.I was quite fortunate to work for a company with an employer 401(k) plan. So, I faithfully contributed for years and now have both 401(k) and Roth 401(k) — principal and earnings — to retire on. My employer’s plan rules state that after I retire, I must take it all or nothing.
From The Slott Report, December 30, 2019:“2020 promises to be an exciting year in the IRA and savings plan worlds, as the full ramifications of the new SECURE Act begin to take shape. Beyond that, the IRS will likely finalize the new life expectancy tables expected to become effective in 2021.
One year ago from yesterday (December 20, 2019), President Trump signed into law the SECURE Act. At that time, virtually no one had heard of the coronavirus and certainly very few (if any) could have foreseen the global pandemic that’s still very much with us.
Question:Hello,Can you still recharacterize a Roth contribution (due to income limits) to a Traditional IRA and then subsequently convert the IRA back to a Roth in the same year? Will this conflict with the new law that prohibits undoing a Roth conversion?Thanks you for your help,
Thinking of using your IRA as a “short-term loan” to raise some extra cash for the holidays? What could go wrong? Well, actually, two major things could go wrong. And either could lead to serious tax headaches.Let’s say Chloe started her holiday shopping early this year and, as usual, spent more than she had budgeted.
Thanksgiving is behind us, and the end of the year will be here soon. (Many of us are truly thankful for that!) This is a good time to remind you of certain tax breaks that will expire before we turn over the calendar to 2021. Many of these actions require cooperation from third-party IRA custodians and plan administrators, so you need to act fast. As that great philosopher Yogi Berra once said, “It gets late early out there.”
Question:Good Morning,We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year?Thank you,Linda
We continue to get questions about the limits that apply for folks who participate in multiple company savings plans at the same time or who switch jobs in the middle of the year. What’s confusing is that there are two limits – the “deferral limit” and the “annual additions limit,” and you need to comply with both.Deferral limit. The deferral limit is based on the total pre-tax and Roth deferrals (but not after-tax contributions) you make to ALL your plans for the year. The limit is indexed periodically and for 2020 (and 2021) is $19,500, or $26,000 if you’re age 50 or older by the end of the year.
Good news! You can look forward to somewhat smaller required minimum distributions (RMDs) from your IRA and company retirement savings plan beginning in 2022. That’s because, on November 6, the IRS released new life expectancy tables that are used to calculate RMDs. The new tables are not effective until 2022. RMDs are waived for 2020, and RMDs for 2021 will be calculated under the current tables.
Question:Our estate planning attorney prepared trust documents a few years ago and he advised us to name the trust as a beneficiary. This was done after discussion with him regarding a situation in case our son(s) divorce their wives. The trust is prepared so that our sons are designated beneficiaries.I've been reading your Slott Report article that advises against naming a trust as IRA beneficiary. Please let me know how to make sure half of the inherited IRA funds don't go to our son's divorced spouse.Thanks in advance.
