If you are thinking about making a charitable donation for this year, you might use money from your IRA to do so. If an IRA distribution is used to make a charitable donation, the IRA distribution will be taxed even though the money went to a charity for a worthy cause. If you are under age 59 ½ on the date of the distribution, you will also be subject to the IRS 10% early distribution penalty,
unless there’s an exception such as disability. We covered that exception in an answer to a question in last Thursday's mailbag. I hear this a lot. "The contribution is to a non-deductible IRA." Or, "I have a non-deductible IRA." There is no such thing as a non-deductible IRA. There are non-deductible contributions made to an IRA. Think about it. Even if a contribution is made to a non-deductible IRA, it will not remain entirely non-deductible for long. There are some sort of earnings on the account – even if it is invested in a money market IRA. Would you make a contribution to an IRA that guaranteed no earnings for as long as you had any funds in the account?
Retirement planning is a serious issue, a technical issue, one that involves very intricate terminology and an advanced, educated financial team to make sense of it all. But, sometimes, the basics can be broken down in interesting ways, hence The Slott Report's IRA, retirement and tax planning limericks.
Hurricane Isaac, which began on August 26, 2012, did considerable flooding and wind damage to parts of the U.S., especially Louisiana and Mississippi. Some areas in those states were declared federal disaster areas by the Federal Emergency Management Agency (FEMA).
IRAs are not only different, but the rules governing them can be difficult. The Slott Report Mailbag is here to wade through the intricate details and help consumers make the right choices for their retirement plans, and steer them to able, educated financial advisors who can help them fill in the blanks. This week we received questions on the once-per-year rollover rule, buying a building with your IRA, and what qualifies has a hardship distribution.
A client is setting up a 72(t) distribution schedule – substantially equal periodic payments that will be exempt from the 10% early distribution penalty. Her first distribution won't be made until September and she would like to take monthly payments. But she also wants the full distribution for the first year, not just four payments. Can she do this? We answer this question below.
When a Roth IRA owner dies, the money belongs to the beneficiary. Although Roth IRA owners never have to take minimum distributions during their lifetime, the beneficiary must take distributions after the Roth IRA owner dies. Roth IRA beneficiaries have the same after-death stretch opportunity as if they inherited a traditional IRA. There are two options for you as the beneficiary of a Roth IRA, which we explain below.
Welcome! Ed Slott and Company believes retirement planning education is worth celebrating, so we are putting on our party hats, lighting the candles and spending the day educating YOU - offering discounted books and a free download and holding live chats so you can have a better perspective on retirement planning from various points of view.
Ed Slott and Company has a special microsite just for those who pledged to Public Television during Ed Slott's recent special, Ed Slott's Retirement Rescue!. Below are two questions contained in the FAQ section of the microsite.
We are in a now all too familiar position. We don't know what the estate tax rules will be in 2013. The exemption amount is scheduled to drop back to $1,000,000 per person, and it will not be portable. We have no idea what Congress may or may not do about the situation. And, because 2012 is an election year, they may not do anything until late in 2013 or perhaps early in 2014. Do you need a trust to protect your estate tax exemption, or don't you? Should you name a trust as the beneficiary of your IRA, or not?
