In the article "Why You Should Take Your 2025 RMD Now," the following caught my eye ...
“Or, maybe you are charitably inclined and looking to satisfy your RMD by doing a qualified charitable distribution (QCD). This will require the custodian to send funds directly to charity and the charity must cash the check.”
If a person under age 59½ takes a withdrawal from his IRA or workplace plan, there is a 10% early withdrawal penalty…unless an exception applies. There are currently 20 exceptions, with a 21st on the way. Here are those exceptions, with some brief commentary.
We continue to get lots of questions about the new “super catch-up” contribution for retirement plan and SIMPLE IRA participants who are ages 60-63.
Here are answers to your top 12 questions:
QUESTION:
I cannot find the indexed number for IRA bankruptcy protection for 2025-2028. It is $1,512,350 currently, but it is scheduled to increase on April 1, 2025. Do you know what it will be?
The arrival of the SECURE Act means the end of the stretch IRA for many beneficiaries. Instead, a 10-year payout rule applies for most IRAs inherited by non-spouse beneficiaries. However, the SECURE Act does allow the stretch to continue for certain select groups of beneficiaries. These beneficiaries are called “eligible designated beneficiaries” (EDBs).
Here is an all-too-common situation that seems counterintuitive: A participant in a 401(k) retires and must take his required minimum distribution (RMD). This person requests that his entire 401(k) plan balance be directly rolled over to an IRA. The plan follows the participant’s direction, and the entire amount is sent to the IRA.
Question:
Hi,
In a recent blog post, you addressed the complicated rules for a 401(k) to Roth IRA rollover. I have a similar question as it relates to a pre-tax IRA conversion to a Roth IRA.
Everyone knows that April 15, 2025, is the deadline for filing 2024 income tax returns. But April 15 is also a crucial deadline if you made too many 401(k) deferrals in 2024. If you don’t fix the error by that date, the tax consequences are serious. Having a tax filing extension for 2024 does NOT give you more time.
Do you have a Roth IRA? If you do, there will very likely come a time when you want to take a distribution from that account. The distribution rules for taxation of Roth IRA distributions can be complicated, but if they are followed, the reward is tax-free withdrawals in retirement.
Hello,
If a person is turning 73 years old in March, s/he would be required to take required minimum distributions for the year. Can a person do Roth Conversion prior to turning age 73 (say in February)? Does the first money out rule still apply?
