Year after year, many of the same IRA errors happen again and again. Based on the volume of times these mistakes occur, it seems appropriate to create a short list of repeat offenders…and offer some advice on how to properly move forward. In no particular order, here is a handful of common IRA mistakes, along with the proper corrective measures.
Question:
Starting in 2024, if you have a 529 plan you can potentially roll it into a Roth IRA if certain requirements are met. Could the 529 plan also go into a Roth employer plan?
Thank you.
Question:
Starting in 2024, if you have a 529 plan you can potentially roll it into a Roth IRA if certain requirements are met. Could the 529 plan also go into a Roth employer plan?
Thank you.
An estate can become the beneficiary of a person’s IRA in a couple of ways. First, the estate could be named outright as the beneficiary on the beneficiary form. This is not recommended. Why? One reason is that a non-designated beneficiary (like an estate), must follow certain restrictive payout rules.
Many IRA assets will ultimately go to nonspouse beneficiaries. When these beneficiaries inherit the funds, special rules kick in. Inherited IRAs are not like your own personal IRA account. Here are seven rules for inherited IRAs that may surprise you if you are a nonspouse beneficiary:
Question:
Dear Mr. Slott,
I really enjoy your publications, website and educational programming on Public Television. You provide a tremendous service and information for investors and advisors alike. My questions pertains to distributions from an Inherited IRA and an Inherited Roth IRA for a non-spouse (daughter).
The Internal Revenue Code is over 4,000 pages of often unintelligible tax jargon. So, it shouldn’t surprise anyone that the law contains more than its share of baffling and inconsistent provisions.
Here are four examples pertaining to IRAs and company retirement plans:
Did you inherit an IRA from someone who is NOT your spouse? This is not uncommon. Maybe you inherited from a sibling or a parent or a friend. If this is your situation, you will want to proceed with caution. For nonspouse beneficiaries a wrong move can result in disastrous consequences. So, take your time and do it right.
Step one is to carefully explore your options. What are a nonspouse beneficiary’s options when it comes to the inherited IRA?
Under the tax code, nonspouse beneficiaries can take advantage of the “stretch” IRA. This means you can set up a properly titled inherited IRA and then take required minimum distributions (RMD)s based on your life expectancy.
This week's Q&A mailbag answers two reader questions about RMDs.
This is the story of Al, Bob and Carl. Each cousin is the non-spouse beneficiary of his father’s 401(k) plan. Their fathers worked together at the local automotive factory for their entire lives and were all covered by the same plan. The default distribution option in the plan for non-spouse beneficiaries is a five-year payout.
