As Roth IRA conversions become more popular, questions and misconceptions abound. In no particular order, here are a dozen Roth IRA conversion facts, issues, and mistakes to avoid:1. Anyone with an IRA can do a Roth conversion. There are no income limits. You can have $0 earned income and do a Roth conversion. You can make a million dollars and convert.
You have done the right thing for years. You have diligently saved and accumulated funds in your IRA. At some point, the funds that you have put away for years must come out. Uncle Sam wants his share. When you reach age 70 ½, you must take a required minimum distribution (RMD) for that year and for every year thereafter.
This week's Slott Report Mailbag examines ERISA creditor protection differences for 401(k)s and IRAs and answers a consumer's question on funding a Roth IRA.
Are you considering converting your traditional IRA to a Roth IRA in 2016? If you are making this important decision, here are 6 things you will want to know.
This week's Slott Report Mailbag answers a consumer's question about how much community property rules tie into his and his wife's retirement accounts and works through Tom's brother-in-law's delicate strategy involving pre- and after-tax retirement funds.
This week's Slott Report Mailbag answers a consumer's question on how to handle taxes with charitable gifts and walks a husband through the complicated process of moving IRA funds to a Roth IRA while facing required minimum distributions (RMDs). As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure.
Have you ever made non-deductible IRA contributions? Or, rolled over after-tax funds from your company plan to your IRA? If so, you will want to know about the pro-rata rule. The pro-rata rule is a rule that almost always determines the taxation of an IRA distribution when the IRA owner has any IRA containing after-tax amounts. However, some IRA distributions are not subject to the pro-rata rule. These exceptions may provide an opportunity for you to lower the tax bill that comes with an IRA distribution or conversion.
There is a lot of information out there about how converting to a Roth IRA is a great move for younger people. This is no surprise. A younger person who converts may pay taxes on a smaller IRA balance and have years to accrue tax-free earnings in their Roth IRA. But what about older people? Older individuals should not overlook the potential tax benefits of converting later in life.
This week's Slott Report Mailbag answers a popular required minimum distribution (RMDs) question - can my sister take the inherited IRA RMD for both of us? - and another consumer's inquiry on Roth conversion tax reporting.
You took a distribution from your employer plan or another IRA and the receiving company put it in the wrong account. Your IRA company did not process your 72(t) distribution in the correct amount. An advisor/salesman told you that the company offering a “great” investment could hold it as an IRA. Someone at the bank told you that you could do a rollover in 90 days, or that you could roll over more than one IRA distribution in a year. You get the idea. So who is at fault for these issues?
