IRAs, Life Insurance & Pizza

IRAs, Life Insurance & Pizza

By Andy Ives, CFP®, AIF®
IRA Analyst

Many years ago, my wife and I went to lunch at a pizza joint in a strip mall. The friendly gray-haired host in sensible shoes (whom I pegged for mid-to-late 60s), tucked two menus under her arm, grabbed a couple sets of silverware wrapped in white paper napkins, and led us to our booth. Since the noontime rush was yet to hit, our host decided to chat. She asked how our day was going, made a pleasant comment about my wife’s shirt, and told us she was a bit tired because, “after this I need to run over to my second job at Kohl’s. Just trying to keep a roof over my head. Been pretty busy since my third husband died.”

Record scratch. Music stops.

She said she hoped we enjoyed our lunch, smiled, and returned to the front where another group was waiting to be seated. I contemplated what I just heard. Either she burned through three husbands who are now all deceased, or one (or both) of the first two are still alive and just husband number 3 is dead. Regardless, I think somebody messed up.

My financial brain started to spin. This woman should be playing canasta with her friends, not showing a stranger and his wife to their seats by a window. She could be hitting golf balls or taking care of her grandkids while the parents run errands. One husband has assuredly passed on, potentially two others have also died. Did anybody think to buy some life insurance?

Q: A client transacted a “reverse rollover” from their traditional IRA in 2020 into their corporate 401(k) plan. After doing so, but in the same year, they made a non-deductible IRA contribution, then transacted a Roth conversion with these monies. Does this Roth conversion fall under the pro rata rules due to it being done in the same year, but after the reverse rollover was completed?

Answer

Q: Under the CARES Act, can I take a temporary CRD from my Roth IRA and redeposit it within three years? I am 74.

Answer

Q: I inherited an IRA from my sister two years ago. She was collecting RMDs at 78.

My question involves collecting my sister’s RMD. Does the 10-year withdrawal go into effect now or do I use the table under my age, which is 73?

Answer

Q: If an individual has a solo 401(k), is this considered a "retirement plan at work" that would limit the deductibility of IRA contributions?

Answer

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.

Upcoming Complimentary Webinars

2:00 p.m. ET
December 1, 2020

1 CE Hour
Hosted by FA Magazine

Register Now

10:00 a.m. ET
December 2, 2020

1 CE/CPE Hour
Hosted by CPA Academy

Register Now

NEW DATES ANNOUNCED

Save $500 with Promo Code EARLYBIRD

Expires Nov. 16

50% OFF - WHILE SUPPLIES LAST!

Give the gift of financial education this holiday season with our most popular books available for half off!

Use promo code YEAREND50 at checkout.

Timely, Advanced Retirement Planning Education

For financial pros looking to gain a competitive advantage with their professional knowledge, subscribe to Ed Slott's IRA Advisor and our new Heather Schreiber’s Social Security Advisor monthly newsletters!

Learn More

Ed Slott and Company, LLC 100 Merrick Road -- Suite 200 E Rockville Centre, New York 11570 United States (516) 536-8282