The 10% Early Distribution Penalty Exceptions – Know the Rules
This is a reminder that not all 10% early distribution penalty exceptions apply to all retirement plan distributions. Here are the three biggest mistakes that we see.
IRA
6 Things Every Non-Spouse IRA Beneficiary Needs to Know
It is not unusual to inherit an IRA from someone who is not your spouse. Many people inherit an IRA from a parent or a sibling. If this is the case for you, here are six things you will want to know.
3 Reasons a 401(k) Deferral Beats an IRA Contribution
1) There Are No Restrictions Preventing a Tax Break
When you defer a portion of your salary into a traditional 401(k), the amount deferred will reduce your taxable income dollar-for-dollar. This is true regardless of how much income you (and your spouse, if applicable) have. In contrast, contributions to a traditional IRA are generally entitled to a tax deduction as well, but if your income is above certain limits and you (and/or your spouse, if applicable) are an active participant in an employer-sponsored retirement plan, then that deduction can be reduced or eliminated. Thus, in some scenarios, a contribution to a traditional IRA won’t help you reduce your current tax bill.
What the Trump Tax Plan Means for Your Retirement
On April 26, 2017, the Trump administration released its highly anticipated tax reform plan. The administration said the goals of the plan include growing the economy, creating jobs and simplifying the tax code. The changes proposed are significant and if passed (and that is a big “if”) could have a major impact on your retirement planning.
So You Think You Need to Name a Trust as the Beneficiary of Your IRA?
In two weeks I had three trusts come across my desk that were named as the beneficiary of the account owner’s IRA. The account owner had now died and the universal question was, “Now what?”
If You’re Over 70 1/2 Years Old and Still Working You Need to Know This
This week's Slott Report Mailbag looks into still working exceptions, RMDs, and IRA transfers.
Interesting Use of the QCD Strategy
Qualified Charitable Distributions (QCDs) are now a permanent part of the tax code. They allow individuals who are at least 70 ½ years old at the time of the transfer to directly transfer IRA funds to a qualifying charity. The individual gets no charitable deduction for these contributed funds, but, they do not have to include the funds in income. It is as if they completely disappear. It’s even better than investing with Bernie Madoff! But wait, there’s more. The QCD transaction can also satisfy a required minimum distribution (RMD) for the year. QCDs are capped at $100,000 per year, per IRA owner.
The Consequences of Breaking Rollover Rules
This week's Slott Report Mailbag looks into IRA rollovers, IRA transfers, and back-door Roth IRAs.
An IRA Rollover Quiz
Most people think it is easy to move their retirement assets. But is it? The following is a quick quiz. How many of these rollover questions can you get correct? The answers are at the end of the quiz.
The Ultimate Rainy Day Fund; The Roth IRA
A recent Pew Charitable Trusts study released in March came to the scary conclusion that roughly one-third of Americans would have trouble coming up with $2,000 in the event of an emergency. Clearly, this is a problem. Try as one might, emergencies are bound to happen from time to time. Some of them may not have an impact on your finances, but many emergencies will. With that in mind, let’s talk for a moment about the ultimate emergency fund, the Roth IRA.
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