Thinking about a 2023 SEP IRA Contribution? Here Are 6 Rules You Need to Know
Are you thinking about making a Simplified Employee Pension (SEP) IRA plan contribution for 2023? If so, here are 6 rules you need to know.
SEP IRA
IRS Gives the Holiday Gift of SECURE 2.0 Guidance
On December 20, the IRS gave us the holiday gift of some guidance on a few provisions from the SECURE 2.0 Act. Notice 2024-02 is in a question-and-answer format and provides much needed clarification on SECURE 2.0 provisions, some of which are already in effect, and others which will come online in just a few short days in 2024.
IRA Contribution Limit Raised to $7,000 for 2024
The IRS has released cost-of-living adjustments (COLAs) for 2024. Many IRA limits will increase next year.Higher IRA ContributionsThe limit on annual contributions to an IRA is increased to $7,000 for 2024, up from $6,500 in 2023. The IRA catch up contribution limit for individuals aged 50 and over was changed to now include a COLA under the SECURE 2.0 but remains $1,000 for 2024.
Inherited Roth IRAs and Backdoor Roth IRAs: Today’s Slott Report Mailbag
Question:Greetings,There seems to be a lot of conflicting information on Inherited Roth IRAs, for which I was hoping to get a definitive answer from the experts.My understanding was that a non-spouse beneficiary (who is not an eligible designated beneficiary), who inherits a Roth IRA wouldn’t be subject to annual RMDs but would be subject to emptying the account within 10 years of the original account owner’s death (for account owners who died after 2019, that is). I thought this exception was predicated on the original account owner of a Roth IRA not being subject to a required beginning date (RBD).
Roth-O-Mania!
SECURE 2.0 is now the law of the land and one thing is very clear. Roth-O-Mania is here! In their quest for more revenue, Congress has created more options to save with Roth accounts. These accounts bring in the immediate revenue that Congress desperately needs. For retirement savers, these Roth options offer the promise of potential tax-free earnings and withdrawals down the road.
Random Real-Life Questions and Answers
Each day we receive dozens of retirement-related questions from advisor members of the Ed Slott Elite IRA Advisor Group. Conversations range from incredibly complex to obscure to, “I just need you to confirm what I was thinking.” Whether a long explanation is required or a quick comment, our members have our undivided attention. We take every question seriously and proactively fill in any information gaps. Here is a random sampling of some recent communications:
Inherited IRAs and SEP Accounts: Today’s Slott Report Mailbag
Question:I have a non-spousal inherited IRA account. Once I take out my RMD for the year, am I able to take out excess funds and roll those into a Roth account?Thank you.Answer:Inherited IRA accounts do not follow all the same rules nor do they have all the same benefits as your own IRA. For one, inherited IRA dollars are not permitted to be converted to a Roth IRA. This is true even if you have satisfied your RMD for the year on that inherited IRA account.
Your First RMD and SEP IRAs: Today’s Slott Report Mailbag
Question:Hi,I turn 72 this year and have to take my first required minimum distribution (RMD). I am also in the process of converting most of my IRA into a Roth IRA. I know I have to take my RMD first before the conversion. Since this is my first year of RMDs, I know one of the options is to delay the RMD until April of next year.
Is it Too Late to Open Up a Small Business Retirement Plan for 2021?
As we move into 2022, small business owners may be wondering whether they still have time to establish a new retirement plan for 2021. The short answer is: “It depends.”There are several retirement plan options especially designed for small business owners, including the self-employed. These include SEP IRAs, SIMPLE IRAs and Solo 401(k)s. All three can be opened up and maintained easily and inexpensively, and all allow tax-deductible contributions that can be significantly higher than the IRA contribution limit.
Retirement Planning for the Self Employed
Not everyone has a boss. In an economy upended by COVID, individuals, sometimes by choice and sometimes not, are striking out on their own and starting new businesses or becoming part of the gig economy. A critical issue for these workers is how to save for retirement.
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