As a result of widespread job loss during the coronavirus pandemic, many suddenly-unemployed persons who dipped into retirement accounts are saddled with outstanding loans from company savings plans. Advisers can play a valuable role in helping these clients by understanding how the “loan offset” rules work, how the CARES Act affects loan offsets, and how offsets differ from “deemed distributions.”
Does your employer offer both a traditional and Roth 401(k) and does your employer allow you the opportunity to do what’s called an in-plan Roth conversion? That’s a tactic whereby you would convert some or all the money in your traditional 401(k) into your Roth 401(k). If so, it’s important to know the do’s and don’ts?
The age when older Americans must start making withdrawals from retirement accounts could change yet again.
Under a provision in proposed retirement legislation pending in Congress, required minimum distributions, or RMDs, would start at age 75 by 2032, up from age 72 — which only took effect last year after the 2019 Secure Act raised it from age 70½.
I figure Ed Slott has been asked this question a million times, “How much do I need to retire?”, but I ask it anyway. Like anything in life, the true answer is a little more nuanced. My guest, Ed Slott, is a CPA and accomplished author of financial and retirement-focused books, including his latest, The New Retirement Savings Time Bomb.
Any IRA owner turning age 72 this year will have a required minimum distribution due for 2021, but the due date for taking that RMD will depend on the half of the year in which they were born. June 30 is the cut-off date when the transition to the SECURE Act age 72 RMD rule becomes complete. The SECURE Act raised the RMD age for owners of individual retirement account owners and certain retirement plan participants from 70½ to 72, but only for those who turned 70½ in 2020 or later.
Can you explain how a special-needs trust works? We have an adult child on disability and have been told we can set up a special-needs trust for her. We have an individual retirement account that we could assign to the trust, but we aren’t sure what the tax requirements are or if there has to be a required minimum distribution.
The real estate market is hot. It is a seller’s market in much of the country and buyers face challenges. They may need to move quickly or come up with cash fast to make a better offer. They may also need to show adequate resources to get financing. Realtors and mortgage brokers eager to close a deal may encourage buyers to tap any available resource to secure a dream property.
The issue involves the 10-year rule that most non-spouse designated beneficiaries (like adult children or grandchildren, and certain qualifying trusts) who inherit individual retirement accounts will be subject to under the SECURE Act. It was expected that the 10-year rule would work the same way as the 5-year rule: There wouldn’t be annual required minimum distributions, but the entire inherited IRA account balance would have to be withdrawn by the end of the 10-year term.
Searching for "retirement planning rules" produces 221 million results on Google. Yes, there's a lot of advice out there. But even the most common tips can put you on the wrong path, leading to retirement planning mistakes. Here are some of the leading legends, and why they should be taken with a large helping of salt:
Taxes don’t go away when you retire. In fact, for many of you reading this post, taxes may be even more onerous in the future once you are retired. Ignoring the ticking time bomb of taxes in retirement could dramatically lower your standard of living in retirement.