By Ian Berger, JD IRA Analyst Question: Hi, I have a client that needs funds for a short period of time, so he plans to use the 60-day rollover rule to borrow money from his IRA and return it within 60 days. He has a Traditional IRA and a Roth IRA. He is under the...

By Sarah Brenner, JD Director of Retirement Education Most IRA distributions will be taxable. However, if you have ever made nondeductible contributions to your IRA or rolled over after-tax funds from your company plan to your IRA, then the rules can get a little bit...

By Ian Berger, JD IRA Analyst When you file for bankruptcy, one thing you usually don’t have to worry about is protecting your IRA funds from creditors. That’s because, in just about every case, all of your IRA (and Roth IRA) monies are off limits. Under the federal...

By Sarah Brenner, JD Director of Retirement Education Question: I established a Roth IRA in 2011 and needed to withdraw $ 30,000 in 2021 to pay for my daughter’s first year of college tuition. I am under 59 1/12 and the 1099-R has a code of J meaning early...

By Andy Ives, CFP®, AIF® IRA Analyst Here we go again. In my March 14 Slott Report entry (“Monitoring Concurrent Life Expectancies? – SMH”), I railed against the IRS for a seemingly pointless rule in the new SECURE Act regulations directed at elderly IRA...

By Sarah Brenner, JD Director of Retirement Education It may be hard to believe it but the countdown to the 2021 tax filing deadline is on. The deadline is April 18, 2022, for most filers. That is really only a few weeks away. Time is running out. Is your IRA ready?...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Hey Ed- Long time reader and listener of yours…and have bought a few copies of your latest book to share with clients! Prior to us being involved, my client made a Backdoor Roth contribution in 2021. He did this despite...

By Ian Berger, JD IRA Analyst With many 401(k) (and 403(b) and 457(b) plans) offering multiple participant accounts, your plan statement is probably more complicated than ever. Here’s a brief primer to help you understand what each account represents: Pre-tax deferral...

By Andy Ives, CFP®, AIF® IRA Analyst I am usually patient with the IRS. I understand the massive workload they have, and there are tax cheats lurking around every corner. The IRS does its best to ensure no loopholes exist for bad actors to circumvent tax laws to avoid...

By Ian Berger, JD IRA Analyst Question: Ed, I read your 2/28/22 Slott Report on the updated SECURE Act information for non-eligible designated beneficiaries (non-EDBs) that requires annual RMDs to continue if the original owner was taking them prior to his death and...

By Sarah Brenner, JD Director of Retirement Education Roth IRAs have always been a great retirement savings tool. While pre-tax retirement accounts allow tax deferred savings, a Roth IRA promises tax-free benefits. They allow you to receive years of earnings in...

By Ian Berger, JD IRA Analyst The part of the new IRS SECURE Act regulations causing the most reaction is the one requiring annual required minimum distributions (RMDs) for some IRA or workplace plan beneficiaries subject to the 10-year payment rule. Under the SECURE...

By Sarah Brenner, JD Director of Retirement Education Question: Hello. I was reading the 2/28/22 edition of the Slott Report and noticed the section titled “Beneficiaries Hit w/Annual RMDs and the 10-Year Rule.” It was my understanding that starting 1/1/20, most...

By Andy Ives, CFP®, AIF® IRA Analyst The 275 pages of proposed SECURE Act regulations, released by the IRS on February 23, are chock full of little details. Each of these tidbits will have some impact on particular IRA owners and retirement account participants. One...

By Sarah Brenner, JD Director of Retirement Education On February 23, 2022, the IRS released the long-awaited proposed SECURE Act regulations. The new regulations clock in at 275 pages and offer guidance on many SECURE Act rules. They also include a few surprises....

By Andy Ives, CFP®, AIF® IRA Analyst Question: If an 80-year-old converts his IRA to a Roth account and dies the following year, when can the beneficiaries begin withdrawing money tax-free from the Roth?  Do the beneficiaries have to wait for the expiration of the...

By Ian Berger, JD IRA Analyst The amount of annual pre-tax deferrals and Roth contributions you can make to a 401(k) plan is limited by the tax code. If you exceeded that limit in 2021, time is of the essence to correct the error. If you don’t act quickly, the tax...

By Ian Berger, JD IRA Analyst The federal ERISA law gives spouses of plan participants in ERISA-covered plans certain rights to the participant’s account. There are two types of ERISA financial protection for spouses. Spouses of IRA owners usually don’t have similar...

By Ian Berger, JD IRA Analyst Question: I am 66 years old and live on Social Security and other retirement income. Additionally, I have about a half million dollars in pre-tax 457(b) funds that I do not need for current expenses. Are these funds in the pre-tax...

By Sarah Brenner, JD Director of Retirement Education The pandemic has upended the workforce. Many workers lost jobs. Some workers resigned by choice. Others were forced to leave jobs due to childcare issues. If you are not working outside the home, you may believe...

By Ian Berger, JD IRA Analyst Towards the end of each year, the IRS announces cost-of-living increases for several retirement-related dollar limits that will become effective for the next year. For example, last November, the IRS said that the limit on employee...

By Sarah Brenner, JD Director of Retirement Education Question: I turn 72 this year. I am getting notices from my many IRA custodians that they want a waiver on file if I am NOT using my account for the RMD (i.e., I am taking it somewhere else). They make it sound...

By Andy Ives, CFP®, AIF® IRA Analyst For IRA owners and retirement plan participants who are under age 59 ½, taking a distribution from a retirement account is typically off limits. The distribution will most likely be taxable, and there is a good chance that a 10%...

By Sarah Brenner, JD Director of Retirement Education If you are under age 59 ½ and you converted your traditional IRA to a Roth IRA, you will need to watch out for the five-year rule for penalty-free distributions of converted funds. Not understanding how the rule...

By Andy Ives, CFP®, AIF® IRA Analyst The “Martin Scenario”: Martin, age 40, has never done an IRA rollover before. He took a distribution from his traditional IRA in December 2021 for $10,000 and deposited it into his checking account. Martin took another distribution...

By Ian Berger, JD IRA Analyst Question: My question relates to an IRA withdrawal that is then deposited as a Roth conversion. Will this withdrawal count as a once-per-year IRA rollover? Thanks in advance for your wonderful advice. Regards, Peter Answer:  Hi Peter,...

By Sarah Brenner, JD Director of Retirement Education The rollover rules can be especially challenging at the end of the calendar year. If you took a distribution from your IRA at end of 2021 and are considering a rollover in 2022, here is what you need to know....

By Ian Berger, JD IRA Analyst 72(t) payments have suddenly become a better deal for IRA owners and company plan participants. Also known as “substantially equal periodic payments,” 72(t) payments are advantageous because they are exempt from the 10% early distribution...

By Sarah Brenner, JD Director of Retirement Education Question: Hello.  Thanks in advance for fielding my question. My mother died in 2021 in her 90's. She was using $100,000 of her traditional IRA RMD as a QCD. In order to fulfill her 2021 charitable commitments, I...

By Andy Ives, CFP®, AIF® IRA Analyst A person is allowed only one IRA-to-IRA or Roth-IRA-to-Roth-IRA 60-day rollover per year. This 12-month period is a full 12 months – it is not a calendar year. Accordingly, we refer to this as the “once-per-year rule.” For example,...

By Sarah Brenner, JD Director of Retirement Education Did you take your RMD from your IRA for 2021? Hopefully, the answer is yes because for most IRA owners and beneficiaries the deadline for taking a 2021 RMD was December 31, 2021. There is an exception. If you...

By Andy Ives, CFP®, AIF® IRA Analyst 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...

By Ian Berger, JD IRA Analyst 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...

By Andy Ives, CFP®, AIF® IRA Analyst Less than two weeks into the new year seems like a good time to provide a few reminders and warnings when it comes to Qualified Charitable Distributions (QCDs). As a quick refresher, remember these QCD facts: Only available to IRA...

By Ian Berger, JD IRA Analyst Question: Has the IRS clarified the 10-year rule on inherited IRAs? Do you have to take RMDs each year or can you wait until the 10th year? Also, does this rule apply to inherited Roth IRAs? Thanks, Daniel Answer: Hi Daniel, Yes, the IRS...

By Sarah Brenner, JD Director of Retirement Education The IRS has released new life expectancy tables for calculating required minimum distributions (RMDs) for 2022. The most commonly used tables are the Uniform Lifetime and the Single Life Expectancy Tables.  The...

By Ian Berger, JD IRA Analyst Welcome to 2022! One of the big changes in the retirement account world this year will be the calculation of required minimum distributions (RMDs). RMDs for IRA owners and plan participants are calculated using life expectancies from IRS...

By Sarah Brenner, JD Director of Retirement Education Question: Ed, Since the Build Back Better bill is still in legislative limbo, does that mean that backdoor Roth IRA contributions are still available for 2022? If so, what do you suggest if someone makes a backdoor...

By Andy Ives, CFP®, AIF® IRA Analyst SCENARIO: Teddy, age 60, has an existing Traditional IRA with a current balance of $93,000. This is all deductible, pre-tax money. Teddy would like to contribute to a Roth IRA, but his income level exceeds the Roth IRA income...

By Andy Ives, CFP®, AIF® IRA Analyst In 2021, the Slott Report produced roughly 100 diverse retirement-related articles and answered approximately 100 reader questions in our weekly Mailbag. We do our best to present topical IRA and retirement plan issues in the most...

By Sarah Brenner, JD Director of Retirement Education Pop the champagne! It is almost time to turn the page on the calendar to a new year. What will 2022 mean for your retirement accounts? All signs point to a very busy year ahead. Here is what we may expect for...

By Sarah Brenner, JD Director of Retirement Education Thanksgiving 2021 is upon us. This is the time of the year when we gather together and express our gratitude. When it comes to our retirement accounts, we often complain about the negatives. There are restrictions...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Hi Mr. Slott: I enjoy your website's very helpful information! I know that the IRS rules limit us to one indirect (60-day) IRA rollover every 12-month period. Are Health Savings Account (HSA) indirect rollovers counted as...

By Ian Berger, JD IRA Analyst As 2021 draws to a close, many of us will naturally look back and try to make some sense of the past year. On the whole, it would be hard to classify 2021 as an “uneventful” year. But in the world of IRAs and workplace plans, it actually...

By Andy Ives, CFP®, AIF® IRA Analyst A “life hack” is any trick, shortcut or simple and clever technique for accomplishing a familiar task more easily and efficiently, in all walks of life. For example, tie a colorful ribbon to your luggage to make it more easily...

By Ian Berger, JD IRA Analyst Question: I have a client, age 65, who passed away and left her IRA to her estate. Two nephews and a niece are beneficiaries of the estate.  Is there a way to add beneficiaries after her passing? I spoke with a financial company, and they...

By Sarah Brenner, JD Director of Retirement Education Tis the season. Yes, it is the holiday season, and it is also the season to take RMDs. RMDs are back for 2021 after being waived by the CARES Act for 2020. With the return of RMDs come questions. One question we...

By Ian Berger, JD IRA Analyst During 2021, Congress has taken up a number of different retirement proposals, and it’s been difficult to keep track of them. Here’s an update of how things stand at the moment. Of course, new developments could occur at any time, so stay...

By Sarah Brenner, JD Director of Retirement Education Question: If the owner of an inherited IRA was required to take RMDs from the IRA prior to his death, can a beneficiary who is younger than age 70 1/2 request QCDs from the inherited IRA? Note: We understand the...

By Andy Ives, CFP®, AIF® IRA Analyst My November 29 Slott Report entry was titled “The Pro-Rata Rule Explained – You are Not Getting Taxed Twice.” I closed that article by stating there are exceptions to the pro-rata rule and ways to clean up an IRA that contains a...

By Sarah Brenner, JD Director of Retirement Education In volatile times like these, when inflation is looming, retirement savers may look to invest their IRAs in gold. Advertisements on the internet and cable tv make it look easy, but that is not the full story. The...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Good afternoon, Mr. Slott. I am trying to complete my taxes for last year, and the tax agent is stating that, because I had two 401(k) rollovers (each from a different employer), that I would be charged a penalty for one...

By Ian Berger, JD IRA Analyst Many sections of the tax code are confusing, but section 457(b) is one of the major offenders. Within that section are the rules for two different types of company retirement plans --  governmental plans, and “top hat” plans for...

By Ian Berger, JD IRA Analyst Are you considering opening up a new solo 401(k) and looking to maximize your 2021 contribution? If so, you may need to act quickly. There is a December 31, 2021 deadline for establishing a new plan if you want to make 2021 elective...

By Sarah Brenner, JD Director of Retirement Education Question: Can someone take an in-service withdrawal from their 401(k) and directly transfer it to their IRA, then take a QCD from the IRA to satisfy the RMD amount attributed to the 401(k)? I am 72 years old and I...

By Andy Ives, CFP®, AIF® IRA Analyst As we careen into the holiday season, there remains a deceitful underbelly of dirtbags operating their typical scams. Giant inflatable Christmas decorations in front of your home or a menorah in the window will not dissuade...

By Sarah Brenner, JD Director of Retirement Education The IRS has released the cost-of-living adjustments (COLAs) for retirement accounts for 2022. As expected, due to inflation in the economy, many of the dollar limit restrictions on retirement accounts will increase...

By Andy Ives, CFP®, AIF® IRA Analyst Question: When calculating my required minimum distribution (RMD) amount, is my Roth IRA balance added to my traditional IRA balance? I understand I don’t have to withdraw from my Roth - just want to know how RMD’s are calculated....

By Ian Berger, JD IRA Analyst The September 29, 2021 Slott Report summarized the rules for taking non-hardship withdrawals from 401(k) plans. This article will focus on the hardship withdrawal rules. Most company savings plans allow you to pull out your funds to take...

By Andy Ives, CFP®, AIF® IRA Analyst As Roth IRA conversions become more popular, questions and misconceptions abound. In no particular order, here are a dozen Roth IRA conversion facts to be aware of: 1. Anyone with an IRA can do a Roth conversion. There are no...

By Ian Berger, JD IRA Analyst As discussed in the October 18 Slott Report, spousal beneficiaries of IRAs can take advantage of certain payout rules that aren’t available to non-spouse beneficiaries. For example, a surviving spouse who remains a beneficiary can defer...

By Sarah Brenner, JD Director of Retirement Education Question: I have four IRAs. Does the once-per-year IRA rollover rule mean I can only take one distribution per year in total or does it mean I can only take one distribution per year from each of my four IRAs? Glen...

By Andy Ives, CFP®, AIF® IRA Analyst Charlie Brown, wearing a ghost costume full of too many eye holes cut in all the wrong spots, famously peered into his trick-or-treat bag and said, “I got a rock.” One of the best parts of Halloween remains. It is the moment at the...

By Sarah Brenner, JD Director of Retirement Education 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...

By Andy Ives, CFP®, AIF® IRA Analyst 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. I have not yet taken my distribution in 2021. I recently received a finding of disability from SSA...

By Ian Berger, JD IRA Analyst 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. If...

By Andy Ives, CFP®, AIF® IRA Analyst 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,...

By Ian Berger, JD IRA Analyst 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...

By Sarah Brenner, JD Director of Retirement Education 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...

By Ian Berger, JD IRA Analyst The Build Back Better Act of 2021, recently passed by the House Ways and Means Committee, includes a number of retirement plan provisions.  They were summarized in the September 22, 2021 Slott Report. Two of those provisions are targeted...

By Sarah Brenner, JD Director of Retirement Education 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...

By Andy Ives, CFP®, AIF® IRA Analyst 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...

By Sarah Brenner, JD Director of Retirement Education 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...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Good morning, I have an inherited IRA. I took a manual withdrawal from it in late August. I thought I had deleted my auto withdrawal on the custodian’s website. I just noticed today that another distribution was taken on...

By Ian Berger, JD IRA Analyst Congress designed 401(k) plans as retirement savings vehicles – not as checking accounts. So, there are restrictions on when employees can make “in-service withdrawals” (i.e., withdrawals  while still working). It’s important to remember...

By Andy Ives, CFP®, AIF® IRA Analyst In most states the legal age for alcohol consumption is 21. And you must actually be 21. When you hand your driver’s license to the bouncer and he shines a little flashlight on your date of birth, it is not good enough to say you...

By Sarah Brenner, JD Director of Retirement Education The House Ways and Means Committee has released a draft of proposed changes to retirement accounts, including adding income limits for conversions and eliminating the back-door Roth conversion strategy. These...

By Ian Berger, JD IRA Analyst Question: If your employer contributes to either a SEP IRA or a SIMPLE IRA, can you (the employee) also contribute to a Roth IRA? Regards, Alfred Answer: Hi Alfred, Yes, you can make Roth IRA contributions even if you participate in a SEP...

By Ian Berger, JD IRA Analyst Are you moving assets between IRAs or from a company plan to an IRA (or vice-versa)? You should know that using a direct transfer is a much better idea than doing a 60-day rollover. Direct transfers avoid all of the possible issues which...

By Andy Ives, CFP®, AIF® IRA Analyst When an IRA owner taking required minimum distributions (RMDs) dies before removing his annual RMD, that year-of-death RMD (or whatever portion remains) must still be withdrawn. Upon passing, the year-of-death RMD immediately...

By Sarah Brenner, JD Director of Retirement Education President Biden has declared September to be National Preparedness Month. The goal is to encourage Americans to be more prepared for natural disasters. Unfortunately, from flooding on the east coast to fires on the...

By Sarah Brenner, JD Director of Retirement Education Question: Ed I heard on a podcast that you are the number one authority on IRAs, so I want to go to the most informative source.  Could you answer this question for me? I have a Roth IRA and suddenly I was unable...

By Ian Berger, JD IRA Analyst What if you have an IRA with your spouse as primary beneficiary, get divorced without changing your beneficiary and then die? Who inherits your IRA benefits. If you live in one of the 26 states (as of June 2018) that have...

By Andy Ives, CFP®, AIF® IRA Analyst Question: I appreciate all of the information you pass along, both through PBS and now through the American College. In one of your recent presentations, you discussed QCDs and their often-overlooked value. I recommend QCDs to...

By Andy Ives, CFP®, AIF® IRA Analyst Yes, you are allowed to own real estate in an IRA. Of course, not every IRA custodian will accommodate such an investment, but that doesn’t mean it is forbidden. If you want to own a beach house in your IRA, or a commercial...

By Sarah Brenner, JD Director of Retirement Education The other day an advisor called us with an issue that comes up frequently, especially in these tumultuous times. His client had made an IRA contribution for 2021 and was planning on deducting that contribution....

By Ian Berger, JD IRA Analyst Question: I am 72 years old and have a Roth IRA. I have some extra cash in a bank account. Can I put that into my Roth IRA and how much can I contribute for 2021? Answer: You could potentially contribute up to $7,000 to a Roth IRA this...

By Andy Ives, CFP®, AIF® IRA Analyst Recently, I had a conversation with an advisor who wanted a second opinion. He disagreed with how a 401(k) custodian was handling his client’s required minimum distribution (RMD). To arm himself with facts, the advisor contacted us...

By Sarah Brenner, JD Director of Retirement Education Question: Ed, My client recently passed away at the age of 86 and the beneficiaries were his twin grandchildren who are six years old.  Does their 10-year clock to withdraw the funds start right away, or can they...

By Sarah Brenner, JD Director of Retirement Education It’s back to school time! Any parent will tell you that education can be expensive. You cannot afford to miss out on any possible option out there that may help you save. One savings tool that you might overlook is...

By Ian Berger, JD IRA Analyst We continue to get lots of questions about the company savings plan contribution limits. There are actually two different contribution limits – the “deferral limit” and the “overall limit.” This makes things very confusing, especially if...

By Andy Ives, CFP®, AIF® IRA Analyst Question: I read of a way to move money from an IRA to a Roth without incurring any taxes. You set up an IRA account and make a non-deductible contribution of $6,000, then you convert it into a Roth.   Is this legal and possible?...

By Andy Ives, CFP®, AIF® IRA Analyst Regardless of whether you open an IRA, participate in a 401(k) plan, buy a life insurance policy, or start a college saving plan for a child, there is a critical detail which should never be overlooked: naming a beneficiary....

Sarah Brenner, JD Director of Retirement Education A Qualified Charitable Distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity income tax free. This can be a great strategy for those who are charitably inclined and looking to save...

Ian Berger, JD IRA Analyst Question: Can you put funds into a Roth IRA for a 14 year old using money you have paid the child for doing chores? Client was told all he needed to do was keep a record of what was paid by to the child. I have always enjoyed your...

Ian Berger, JD IRA Analyst Suppose you inherit 401(k) (or other ERISA plan) funds and then file for bankruptcy before receiving those funds. Can you lose those 40(k) dollars to your bankruptcy creditors? According to a recent decision of a Bankruptcy Court in North...

By Sarah Brenner, JD Director of Retirement Educations Question: If you are an employee who participates in a 401(k) who retires at age 73, do you have to take an RMD in the year you retire, or can you take your RMD by April 1 of the year following retirement? If you...

By Sarah Brenner, JD Director of Retirement Educations You may be familiar with Health Savings Accounts (HSAs). These accounts have been around now for a while. They work with high deductible health insurance and are known for their triple tax benefits. Contributions...

By Ian Berger, JD IRA Analyst It’s that time of the year! College bills for the Fall semester are arriving, and you may be thinking of tapping into your retirement savings to help with the costs. If you’re under age 59 ½, be careful. Your withdrawal may be subject to...

By Sarah Brenner, JD Director of Retirement Education Question: Hi, I have a client who died in 2021 before taking his 2021 RMD. He designated various charities as beneficiaries of his IRA. The IRA custodian is advising the executor to take the RMD, however according...