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Roth IRA

5 Takeaways from Ed Slott’s Instant IRA Success Workshop

On July 15 and 16, financial advisors from around the country gathered virtually for Ed Slott and Company’s Instant IRA Success workshop. We took a deep dive into the rules governing retirement accounts and engaged in some lively discussions of issues that advisors on the front line are facing regularly as they help their clients plan for a secure retirement. Here are five takeaways to share from our recent meeting:

The Pro-Rata Rule & IRA Beneficiaries: Today's Slott Report Mailbag

Hi. My name is John and I have a Roth question. I have read your most recent book but did not find the answer to this question. I have made non-deductible contributions to a traditional IRA for many years, so about half of the account is basis. I have no Roth account (yet). I recently left my job and rolled over my 401(k) into a separate rollover IRA. Will I have to include this rollover IRA along with the traditional IRA as part of the pro-rata rule in order to take advantage of Roth conversions? Hopefully, I did not screw up by removing funds from my prior employer.

The 10-Year Rule and Roth Conversions: Today's Slott Report Mailbag

A client of mine born in 1952 passed away in March 2021 and the IRA passed to her mother who is 91 years old. So, the 10 year rule applies to liquidate the IRA as she is not an eligible designated beneficiary (EDB). If the mother passes away at age 95 and leaves the inherited IRA to her son – how long does the son have to liquidate the account??? All the best

Roth Conversions Under the SECURE Act: Today's Slott Report Mailbag

Question: I am 83 years old with an IRA rollover account, regular IRA account and a small Roth IRA. If I convert a portion of either the rollover or regular IRA to a Roth IRA and die before 5 years after the conversion, is there any penalty to me or the beneficiaries? Also, can I convert to the existing Roth IRA or should I start a new Roth IRA? I do not plan to make any withdrawals from any Roth IRA. Does it make a difference from which IRA I convert funds? Thank you for your response, George

The Roth Conversion Conversation: A Must-Have!

When visiting the doctor, does he or she ask foundational questions to help determine your medical condition? Of course. “How are you feeling?” “Are you a smoker?” “What hurts?” Does the doctor take some basic measurements – height, weight, blood pressure? Does he listen to your heart and lungs? Most assuredly. The doctor is establishing an overall picture of health so as to make informed medical decisions. Without such elemental knowledge, how could a proper diagnosis be made? How could “next steps” be recommended with any confidence? It is not possible to provide appropriate care or guidance simply by looking at a person. Assumptions could be a death sentence.

IRA Rumors and Conspiracy Theories

With all the recent changes to IRAs under the SECURE Act [i.e., required minimum distribution (RMD) age raised to 72, new rules for beneficiaries, etc.], combined with the CARES Act waiver of RMDs last year, it comes as no surprise that we are hearing rumors and conspiracy theories about what will happen next. Here are a couple of the more popular speculations: Will RMDs be waived again in 2021?

Falling Within the Phaseout, Part 1 - Determining Your Reduced Roth IRA Contribution Limit

When it comes to contributing directly to a Roth IRA, an individual must have modified adjusted gross income below a certain level. This income level cutoff is not a “cliff,” meaning if you go one dollar over the level, you do not immediately become ineligible for a Roth IRA. There is a phaseout range where the amount of the direct Roth IRA contribution is gradually decreased. For 2021, the Roth phaseout limits for contributions are $198,000 - $208,000 for those married/filing joint, and $125,000 - $140,000 for single filers.

ROTH CONVERSIONS OF ILLIQUID ASSETS AND ROTH CONVERSIONS TO SATISFY RMDS: TODAY’S SLOTT REPORT MAILBAG

I have self-directed traditional and Roth accounts at an SDIRA Custodian. Can I do a Roth conversion of an illiquid asset from the traditional to the Roth account? The investment I want to convert is a debt-only asset (no equity component) generating a fixed 8% dividend. It has a consistent FMV from year to year. I know I will pay tax on the conversion. I am 75 and retired. Thank you,

Roth IRA Contributions and Your Tax Return

Have you contributed to a Roth IRA for 2020? If you have not, you still have some time. The deadline for making a prior year contribution is the tax-filing deadline, not including any extensions you might have. For 2020, that deadline is April 15, 2021.

Transferring a Roth IRA After Divorce – 3 Logical Considerations

Surprisingly, the rules governing what happens when an ex-spouse acquires a Roth IRA after divorce are unclear. There are no specific directions in the Tax Code or in the regulations. However, there is definitive guidance for a spouse who inherits a Roth IRA due to death. It makes sense to look to these rules after death for direction on how to process a Roth IRA transfer after a divorce. Of course, with no definitive route, this is only speculation until the IRS provides a roadmap.

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