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401K

12/31/21 Deadline May Loom for Starting New Solo 401(k) Plan

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 deferrals.

Bigger 401(k) Contributions Coming in 2022

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 next year.

The 401(k) Hardship Withdrawal Rules in a Nutshell

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.

Restrictions on 401(k) In-Service Withdrawals

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 that while 401(k) plans must abide by these withdrawal rules, plans are free to impose even more restrictive rules. So, you’ll need to check your plan summary or ask your plan administrator or HR rep for the particular withdrawal rules that apply to you.

Making Sense of the 401(k) Multiple Plan Limits

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 you’re in multiple plans at the same time or you change jobs in the middle of the year.

Court Decides that Bankruptcy Creditors Cannot Touch Inherited 401(k) Funds

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 Carolina, you don’t have to worry.

ROTH CONVERSIONS & 401(k) RMDs: TODAY’S SLOTT REPORT MAILBAG

Hi! I attended the February 2021 IRA seminar and had a question re: Roth conversions. he seminar discussed rolling over assets held in a company plan into a Roth IRA. I’m dealing with a client that wants to roll over a lump sum from a state pension plan into a Roth IRA. Can you tell me if in your experience this is generally permitted (assuming tax is paid on the conversion amount)?

The IRS May Be Coming After Your Solo 401(k) Plan

If you sponsor a solo 401(k) plan, beware! The IRS recently announced that it is targeting several employer plan areas for stepped-up auditing. One of those areas is solo 401(k) plans. The fact that solo plans made the list is a signal that the IRS believes there are widespread compliance issues with these plans. While solo 401(k) plans don’t have as many rules to follow as employer-based 401(k) plans, there are still several requirements. The IRS announcement should be a warning to business owners with solo plans to make sure they are obeying those rules.

Can I Still Open Up A New Solo 401(k) for 2020?

We’ve been getting a number of questions lately about whether it’s too late to set up a new solo 401(k) plan for 2020. The answer is “sort of.” Business owners with no employees (other than a spouse) can contribute to a solo 401(k) plan. Solo plans are typically used by sole proprietors but are also available if your business is incorporated or structured as a partnership or LLC.

House Rules

Casinos have house rules. These rules dictate what patrons can and cannot do. They are often written down, posted, and there is no debating the validity of said guidelines. House rules govern all those under the purview of management. I have house rules of my own when it comes to card games, darts, boardgames and any other source of competition. House rules can also apply to non-competitive situations. No swearing. Take your shoes off. Don’t sit on the good furniture in the living room.

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