2021 New Year's Resolutions for Your IRA
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2021 New Year's Resolutions for Your IRA

By Sarah Brenner, JD
Director of Retirement Education

By Sarah Brenner, JD

A new year brings a fresh start, and after 2020, we need that more than ever. You probably have a few resolutions for 2021. When making your list of goals for the new year, don’t overlook your IRA. Here are a few suggestions for your IRA for 2021.

1. Act sooner, rather than later. Thinking about making an IRA contribution? You have until the tax-filing deadline, including extensions, to get it done. This means you can still make your 2020 IRA contribution anytime until April 15, 2021. But why wait until the last minute? Get it done sooner. By doing so, you will not only avoid last-minute problems but also allow your IRA to grow faster. While you’re at it, why not consider making your contribution for 2021 at the same time? Making your contributions early can produce a surprising difference in the amount you will have saved in your IRA when you retire.

RMDs were waived for 2020, but they are back for 2021. If you are required to take an RMD for 2021, why not apply the same “get it done” philosophy? While some rare individuals may have valid reasons for delaying their RMD until the last minute, it usually makes sense not to wait that long. A missed RMD can result in a 50% penalty. You don’t want to mess around here. Get that RMD out sooner rather than later.



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Q: Can a retired person not working contribute to a Roth IRA?

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Q:I have heard that if you make a deductible contribution to a traditional IRA it can reduce the value of your qualified charitable distribution. Is the same thing true if you make a SEP contribution?

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Q: Do you have to pay back all of the CRD in 3 years to get any of the tax benefit? What if you fall short of paying it all back? Is it ALL still taxed?

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Q: I recently retired and I plan to relocate to Tennessee. I would like to purchase a new home. Can I pull funds from my IRA to do so, and what would be the implications?

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Q: My husband has a 401(k) that has some funds that are Roth 401(k) and some that are traditional 401(k). When he retires, will he transfer these to two different IRAs (regular and Roth) or will they go into one account where we will have to allocate withdrawals according to the percentage of the two types of funds?

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Have a question for our IRA Technical Team?
Email your questions to us at mailbag@irahelp.com. Selected questions will be featured every Thursday in the Slott Report.



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