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IRA BLOG

Ed Slott’s Elite IRA Advisor Group (Ed Slott Group) is a membership organization owned by Ed Slott and Company, LLC. Qualifying criteria for membership includes completing specified educational courses offered by Ed Slott Group. Ed Slott Group membership requirements include the payment of annual dues. Logos and/or trademarks are property of their respective owners and no endorsement of (Pivotal Financial) or (Greg Lynch) is stated or implied. Ed Slott Group and Ed Slott and Company, LLC are not affiliated with Pivotal Financial.

For the detailed requirements of Ed Slott’s Elite IRA Advisor Group, please visit: https://www.irahelp.com/EliteGroup

MORE ON THE ROTH CATCH-UP CONTRIBUTIONS DELAY

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport The August 28, 2023 Slott Report summarized IRS Notice 2023-62, where the IRS delayed the effective date of the SECURE 2.0 rule requiring catch-up contributions by higher-paid older employees to be made on...

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THE 10-YEAR RULE AND 529 PLANS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Question: My name is Bruce. I am 65 years old, and I have a question about the SECURE Act. My mother died at age 89 on April 19, 2023, and I inherited her IRA. She had been receiving...

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IRA BENEFICIARY PAYOUT RULES – THE MADNESS CONTINUES

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport   The lunacy of IRA beneficiary payout rules continues to boggle the mind. As I guide advisors through the options available to their clients, various nuances present one unique scenario after...

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3-YEAR STATUTE OF LIMITATIONS – MISSED RMDS

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport When an IRA or retirement plan owner reaches a particular age, that account owner typically must begin taking required minimum distributions (RMDs.) The RMD is calculated based on the year-end...

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RMD RELIEF? NO THANK YOU!

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport The IRS unleashed massive confusion last year. To the surprise of many, it released proposed SECURE Act regulations requiring beneficiaries (on some occasions) to take required...

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ANOMALIES AND EXCEPTIONS

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport As already-complicated IRA rules spiral further into an abyss of confusion, it comes as no surprise that irregularities exist. Up is down and left is right. Green means stop, red means throw your...

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INHERITED IRAS AND RMDS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Greetings, If I have the beneficiaries on my IRA listed as my wife (50%) and two children over 21 (50%), is my wife still able to move her half of the IRA into her existing IRA when I...

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ROTH CONVERSION CONFUSION – TAXES WITHHELD WHEN UNDER 59 ½

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   There is no doubt we have written about this topic in past Slott Report entries. Possibly many times. There is also no doubt that people continue to make this same error, over and over...

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HELP A YOUNG PERSON USE SUMMER EARNINGS TO START A ROTH IRA

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Is your child or grandchild working hard this summer? A summer job can be a valuable experience for a young person. Whether it is making smoothies, serving tables, or being a...

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Q&AS ON RECENT IRS RMD RELIEF

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport On July 17, we reported that the IRS had issued required minimum distribution (RMD) relief in two situations. First, the Service excused 2023 RMDs for certain IRA (and plan) beneficiaries subject to...

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TRUST AS IRA BENEFICIARY – A POTENTIALLY CATASTROPHIC PROBLEM

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport We say in our training manuals that “the SECURE Act obliterates IRA trust planning.” That’s an aggressive word – “obliterates” – but it is accurate. We also shout from the mountain top that...

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5 WAYS EXCESS IRA CONTRIBUTIONS HAPPEN

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport   You can have too much of a good thing. While it is a good strategy to contribute to an IRA, some contributions are not allowed. When a contribution is not permitted in...

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SUMMERTIME SIMILES & METAPHORS – NO SHIRTS OR SHOES REQUIRED

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Oftentimes with these articles, I compare certain retirement account rules to arbitrary items. A creative metaphor or simile can help the reader grasp a concept. For instance, past entries have...

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WHY YOU SHOULD NOT ROLL OVER YOUR COMPANY FUNDS TO AN IRA

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport In her June 28, 2023 Slott Report post, Sarah Brenner discussed several reasons why it pays to roll over your retirement plan savings to an IRA. Another option is to keep your funds in the plan. Keep...

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WHY YOU SHOULD ROLL OVER YOUR RETIREMENT FUNDS TO AN IRA

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport If you are like most American workers, you will change jobs many times during your lifetime. With a job change, you will have a decision to make. What should you do with the...

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DEATH OF AN IRA BENEFICIARY – BEFORE CLAIMING THE ACCOUNT

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   When an IRA owner dies, we look to the beneficiary form to determine who should receive the IRA funds. After death, there is a transition process as assets are moved into an inherited...

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THE TWO TYPES OF 457(B) PLANS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Some of you are aware that there are two types of section 457(b) retirement plans – governmental plans for state and local municipal workers, and “top hat” plans for highly-paid and managerial...

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NUA AND SILVER IN YOUR IRA: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   Question: I have a large amount of stock from a previous employer in my 401(k).  I had been reinvesting the dividends for the last 23 years since I left the company.  I no longer want to...

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IF THE IRS ASK QUESTIONS, CAN YOUR ACTIONS BE JUSTIFIED?

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport A couple of years ago I was asked what the tax consequences are when a Roth IRA is split in divorce. After a pause, I answered honestly: “I have no idea…but will find out.” In fact, there is no...

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FIVE QDRO Q&AS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Although the U.S. divorce rate is in a steady decline, it’s still one of the highest in the world. And with divorces often come QDROs – “qualified domestic relations orders.” A QDRO is a state court...

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SPOUSAL ROLLOVERS

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Probably the biggest advantage that a spouse beneficiary of an IRA has over other beneficiaries is the ability to do a spousal rollover. Only a spouse beneficiary can do a...

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ALAR – THE “AT LEAST AS RAPIDLY” RULE

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport For deaths in 2020 or later, we know that a non-eligible designated beneficiary (NEDB) of an IRA is subject to the 10-year rule. Meaning, the account must be emptied by the end of the tenth...

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IRS DELAYS EFFECTIVE DATE OF IRA SELF-CORRECTION PROGRAM

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport It looks like IRA owners will probably have to wait awhile to take advantage of a new program that allows them to self-correct IRA errors that previously couldn’t be fixed. In Notice 2023-43, the IRS...

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POISON IVY: IRA SCENARIOS TO AVOID

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport I got into some poison ivy and am suffering the consequences. It takes a few days for the welts to appear, but they are in full bloom. While I did take precautions before starting my yardwork...

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A BETTER WAY OF UNDERSTANDING THE ONCE-PER-YEAR ROLLOVER RULE

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport The “once-per-year” rollover rule is one of those IRA rules that has serious tax consequences and cannot be fixed if violated. Breaking the rule results in a taxable distribution and a 10% early...

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REQUIRED MINIMUM DISTRIBUTIONS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Hello and thank you for all the great, helpful information you continue to send out. I am due to take my first RMD (required minimum distribution) in 2024 which would...

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HSA BENEFITS THAT MAY SURPRISE YOU

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport   You have likely heard of Health Savings Accounts (HSAs), and you may even understand the basics of how an HSA works. These accounts are really not too complicated. If...

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INHERITED ROTH IRA: RMDS OR NO?

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport QUESTION: Do required minimum distributions (RMDs) apply to inherited Roth IRAs? ANSWER: It depends on who the beneficiary is. Owners of traditional IRAs must start taking RMDs when they reach...

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MANDATORY ROTH CATCH-UP CONTRIBUTIONS REQUIRED FOR 2024

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport   One of the more controversial provisions of the new SECURE 2.0 law concerns 401(k) catch-up contributions. Most 401(k) plans – as well as 403(b) and governmental 457(b) plans – permit employees...

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CONVERSION AS A GIFT TO YOUR BENEFICIARIES

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Do you have an IRA you are thinking about converting to a Roth IRA? There are many benefits to converting. You trade an immediate tax bill for the promise of tax-free earnings...

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THE 3 IRA BENEFICIARY CATEGORIES – AGAIN AND AGAIN AND AGAIN

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport This past week the Ed Slott team hosted another successful conference for our Elite IRA Advisor Group members. Well over 300 advisors from across the country descended on Washington D.C. for...

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HOW THE RETIREMENT PLAN COMPENSATION LIMIT WORKS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport It’s certainly not a bad problem to have. But employees with very high compensation cannot have their retirement plan benefits based on all of their pay. Instead, the tax code allows only compensation...

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THE 5-YEAR RULE FOR CONVERTED ROTH IRA FUNDS

By Sarah Brenner, JD Director of Retirement Education If you recently converted your traditional IRA to a Roth IRA and you under 59 ½, you will want to know about the five-year rule for penalty-free distributions of converted funds from your Roth IRA. Many people are...

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5 REASONS WHY YOU SHOULD NOT OPEN A ROTH IRA

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport In my April 12 Slott Report entry (“5 Reasons to Open a Roth IRA Immediately!”), I included a handful of points as to why it was imperative to open a Roth IRA, especially before the tax filing...

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DO SPOUSES HAVE ANY RIGHTS TO RETIREMENT PLAN ACCOUNTS?

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport One important way that IRAs differ from company retirement plans is with respect to spousal financial rights. Most married IRA owners do not need spousal consent before designating a beneficiary other...

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ROTH IRA VS. ROTH 401(K)

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport More 401(k) plans are starting to offer Roth options. If you now have this option, you may be wondering what the difference is between a Roth IRA and a Roth 401(k). Which...

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5 REASONS TO OPEN A ROTH IRA IMMEDIATELY!

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Time is running out! The tax filing deadline is Tuesday, April 18. Why is this important? Because that is the last day an IRA can be opened and/or funded for the previous year. Even if a...

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IRS SIGNALS THAT IT WILL STILL WAIVE MISSED RMD PENALTIES

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Despite the reduction in the penalty for missing required minimum distributions (RMDs) in the new SECURE 2.0 law, it looks like you will still be able to get the IRS to waive the penalty altogether....

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5 HSA RULES YOU NEED TO KNOW

Health Savings Accounts (HSAs) are rapidly growing in both size and in number. These accounts offer deductible contributions and tax-free distributions for qualified medical expenses. An HSA can be a valuable tool not only for paying for medical expenses but also for...

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FACTS OF THE QUALIFIED HIGHER EDUCATION IRA PENALTY EXCEPTION

Higher education expenses can be steep. Fortunately for those under the age of 59 ½ who need to dip into retirement savings to cover these costs, there is an exception to the 10% early withdrawal penalty. Before tapping your IRA, be sure to understand the fundamentals...

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VESTING IN COMPANY PLANS AND NEW IRS FORFEITURE RULES

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport When you leave your job and aren’t fully vested in your company plan account, the plan will forfeit your unvested portion. Recently, the IRS issued new guidance clarifying the forfeiture rules....

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FIVE FACTS YOU NEED TO KNOW ABOUT FDIC INSURANCE AND YOUR IRA

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport The Federal Deposit Insurance Corporation (FDIC) has been in the news recently as bank failures have made headlines. The FDIC is an independent agency created by Congress. It...

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3 TIPS FOR MAKING YOUR 2022 IRA CONTRIBUTION

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is in full swing. That means that the 2022 tax-filing deadline is not far away. Are you considering making a 2022 IRA contribution? Time is quickly running out. Here...

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BLOODY MARY AND A 401(K)

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Spring break. Warm breezes and ocean waves and fancy cocktails are top of mind. The aroma of coconut suntan lotion entwined with barbecue smoke floats on salty air. And when morning light...

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CAN I REACH MY 401(K) FUNDS WHILE STILL WORKING?

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport We continue to get questions about the ability of employees to withdraw from 401(k) plans while still working. The tax code includes certain restrictions on these in-service withdrawals. Plans must...

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3 TIPS FOR MAKING YOUR 2022 IRA CONTRIBUTION

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is in full swing. That means that the 2022 tax-filing deadline is not far away. Are you considering making a 2022 IRA contribution? Time is quickly running out. Here...

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THE INTERNET SAID SO

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport People on TikTok create investment advice videos? And I’m supposed to trust whatever this talking head is telling me? No chance. Of course, the person on TikTok could hold a number of higher...

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SECURE 2.0 GLITCHES AND UNANSWERED QUESTIONS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Considering that it made 92 new IRA and retirement plan changes and is 357 pages long, it’s not surprising that the new SECURE 2.0 law has several unintended drafting errors and lots of unresolved...

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NAMING A MINOR AS YOUR IRA BENEFICIARY

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport If you want to leave your IRA to an adult, you simply name that person on the IRA beneficiary form. Unfortunately, when it comes to minors, it is not that easy. When a minor...

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RBD – PROACTIVE SALLY AND OBLIVIOUS JERRY

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Last week the Ed Slott team hosted another highly successful and sold-out 2-day advisor training program at Caesar’s Palace in Las Vegas. Over 250 financial professionals from across the...

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SECURE 2.0 ELIMINATES PENALTY ON NIA

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport SECURE 2.0 is a mammoth piece of legislation that contains over 90 provisions that affect retirement accounts. While many of these provisions are not game changers, they still...

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EDBS HAVE A CHOICE: STRETCH VS. 10-YEAR

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport By now, most are aware the SECURE Act created a new class of beneficiaries called “eligible designated beneficiaries” (EDBs). This group includes surviving spouses, minor children of the...

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5 THINGS TO KNOW WHEN MAKING A 2022 ROTH IRA CONTRIBUTION

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is upon us. This is the time when you might be thinking about contributing to a retirement account. You may be interested in the Roth IRA, which offers the promise...

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AGE 50 EXCEPTION QUESTION

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport When IRA or retirement plan assets are withdrawn prior to age 59 ½, an early distribution penalty of 10% applies - in addition to any taxes owed on the distribution. However, there are...

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SECURE 2.0 ALLOWS ROTH EMPLOYER CONTRIBUTIONS IN 401(K) PLANS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Up to now, employer contributions to 401(k) (and other plans) had to be made to pre-tax accounts. One of the SECURE 2.0 changes already in effect allows employer contributions to be made to Roth...

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SECURE 2.0 MODIFIES RULES FOR SPECIAL NEEDS TRUSTS

By Sarah Brenner, JD IRA Analyst Follow Us on Twitter: @theslottreport The SECURE Act changed the game for inherited IRAs. For most beneficiaries, the stretch IRA is gone and has been replaced by the 10-year payout rule. However, the SECURE Act carved out some rules...

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SECURE 2.0 CHANGES ALREADY IN EFFECT

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport The SECURE 2.0 Act, enacted into law on December 29, 2022, makes over 90 changes to the IRA and employer plan tax rules. If that isn’t enough, many of these provisions aren’t immediately effective and...

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ROTH-O-MANIA!

By Sarah Brenner, JD IRA Analyst Follow Us on Twitter: @theslottreport 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...

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529 PLANS AND ROTH IRAS: TODAY'S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Hello Ed, I have a question concerning Secure 2.0 pertaining to transferring “leftover” 529 plan account balances into a Roth IRA, beginning 2024. If I have no income in 2024, can I...

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SECURE 2.0 ELIMINATES RMDS ON ROTH PLAN DOLLARS IN 2024

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport If a person has a Traditional IRA and is of the age when lifetime required minimum distributions (RMDs) apply, then that person must withdraw a portion of that account annually. The amount to...

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SECURE 2.0 ALLOWS ROLLOVERS OF 529 FUNDS TO ROTH IRAS

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport We’re getting a lot of questions about the SECURE 2.0 provision allowing tax-free rollovers from 529 plans to Roth IRAs. Although this new rollover opportunity sounds exciting, there are a number of...

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QCDS AND 60-DAY ROLLOVERS: TODAY'S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I am confused regarding the requirements for making a qualified charitable distribution. Is it necessary for the donation to be sent directly from the financial...

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WHO CAN DELAY THEIR RMD UNDER SECURE 2.0?

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport One of the provisions of the recently passed SECURE 2.0 that has gotten the most attentions is the one that allows some retirement account owners to delay their required...

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