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.
Question:
My situation is as follows: I am 56 years old and have an IRA which I have been taking SEPP/72(t) payments since 2008.
One question that continues to come up is whether company retirement plan dollars are protected from creditors. This becomes an issue if you are forced to declare bankruptcy or you owe money after a legal action is brought against you.
When a married IRA owner dies, the surviving spouse is oftentimes the beneficiary. Of course, there are instances where a trust might be named as IRA beneficiary, or the children or a charity or someone else is listed. Regardless, typically it is the spouse, and how that spouse treats the inherited IRA dollars is important. While at first glance this appears to be a simple decision, there are multiple variables and options to consider.
Question:
I am retired and turned 72 in September, 2021, so I must begin required beginning distributions (RMDs) by April, 2022. I have traditional and Roth IRAs as well as a defined contribution plan with a former employer. I understand I must withdraw my RMD before withdrawing an amount for anything else (e.g., Roth conversion) from both my traditional IRA and my defined contribution plan. But is that requirement limited to withdrawals within each type of plan (IRA and defined contribution)?
As you approach your golden years, you may be looking to simplify your life to wring the most out of retirement. It may be time to right size and move from a larger house with an abundance of maintenance to a smaller space that is easier to manage. It may also be time to declutter and organize years of belongings. Make a new start. Retirement accounts should not be overlooked as part of this process. Consolidating these accounts can go a long way towards simplifying life.
By Ian Berger, JDIRA AnalystFollow Us on Twitter: @theslottreport The Build Back Better Act of 2021, recently passed by the House...
Question:
Dear Ed Slott and Company,
I am a longtime subscriber, having met and talked with Ed at several industry conferences, going back well over 20 years. Which, with all of Ed’s great work and active networking, puts me in a pretty big club!
In any event, a CPA has turned to me with a problem.
A client of his passed away earlier this year with $1.7M in her IRA. Her Estate was the beneficiary of the IRA. Her 80+ year old siblings are the beneficiaries of the estate. I know, not great facts. But, it gets worse.
When it comes to taxes and the 10% early distribution penalty, do not allow the underlying investments within a Traditional IRA to confuse what is applicable. Earnings within an IRA are just earnings. It does not matter if those earnings come from appreciation, capital gains, dividends, rents, annuity income, interest, or really any other form of growth. If it happens within the IRA, it is essentially just “earnings.”
It’s hard to keep up with the news out of Washington these days! We have been getting a ton of questions on how the new tax proposals recently passed by the House Ways and Means Committee would impact Roth conversions. Here is the rundown.
