Question:HiCan we contribute backdoor Roth IRA money to my husband’s Roth IRA since I have existing traditional IRA accounts, but my husband has none? Thank you very much for answering my questions.Pinan
On December 20, 2023, the IRS issued Notice 2024-02, which includes guidance on 12 provisions of the SECURE 2.0 legislation. The December 27 Slott Report, written by Sarah Brenner, has a summary of the guidance on several of those provisions. This article will address the guidance on Roth employer contributions to 401(k) and other plans.
Last Friday afternoon (August 25, 2023), the IRS gave employer plans two more years to comply with the controversial SECURE 2.0 rule requiring “catch-up contributions” for high-paid employees to be made on a Roth basis. The effective date of the rule was postponed from January 1, 2024 to January 1, 2026. The delay is set forth in IRS Notice 2023-62.
Question:Hello,I am involved with a traditional non-spouse inherited IRA that was passed from my mother to myself and two siblings in 2022. My mother was 84 when she passed and was taking RMDs.I understand the new legislation passed under the SECURE Act requires any such traditional inherited IRA requires full distribution by the end of the 10-year period following her death. I fully understand the law change.
More 401(k) plans are starting to offer Roth options. If you now have this option, you may be wondering what the difference is between a Roth IRA and a Roth 401(k). Which account is right for you?These accounts have a lot in common. Both offer the ability to make after-tax contributions now in exchange for tax-free earnings down the road if the rules are followed. However, there are some important differences between the two plans that you will want to understand.
Considering that it made 92 new IRA and retirement plan changes and is 357 pages long, it’s not surprising that the new SECURE 2.0 law has several unintended drafting errors and lots of unresolved questions.The drafting errors will have to be fixed, either by Congress in “technical corrections” legislation or by the IRS. The first concerns the delay in the age when RMDs (required minimum distributions) must start. The way SECURE 2.0 now reads is that someone born during 1959 will have two RMD ages: 73 and 75.
The Ed Slott team hosted a highly successful training program for members of our Elite and Master Elite Advisor groups last week in Las Vegas. Over 300 financial advisors from across the country attended. Feedback on the educational material provided was positive, with one attendee saying he “never felt more empowered” in his 18-year career.
More and more 401(k) plans now offer Roth contributions. At the same time, Americans are changing jobs and receiving 401(k) distributions in record numbers. So, it’s a good time to review the tax rules that apply to Roth 401(k) withdrawals. (The same rules also apply to Roth 403(b) and Roth 457(b) withdrawals.)
Both Roth 401(k)s and Roth IRAs offer the ability to make after-tax contributions now in exchange for tax-free earnings down the road if the rules are followed. However, there are some important differences between the two retirement accounts that you will want to understand.1. Contributions limits are higher for Roth 401(k)sOne major difference is in the amount that you may contribute. Your Roth IRA contribution is limited to a maximum of $6,000 for 2020 if you are under age 50.
With more 401(k) plans offering Roth contributions and more folks taking distributions from their plans, now’s a good time to review the tax rules governing Roth 401(k) distributions.
