The Slott Report

IRS has released guidance on the conversion of 401(k) and 403(b) plan assets to Roth 401(k) or Roth 403(b) accounts in Notice 2010-84. This guidance also applies to governmental 457(b) plans beginning January 1, 2011. Here are the highlights: Plan participants, spouses, and alternate payees who are current or former spouses can do the in-plan Roth conversion.

The holiday season is a time for checklists. The good news is you don't have to make this list, but make sure to check it twice. Ed Slott created this year-end IRA checklist just for ALL OF OUR LOYAL READERS. You can read about many of the often-overlooked year-end items that could lead to a retirement savings windfall. Guard the money you have worked and saved for this holiday season.

This week's Slott Report Mailbag discusses the main IRA topic that will dominate year-end planning...a 2010 Roth conversion.

This week's Slott Report Mailbag discusses some complex, timely issues involving the myths about Roth conversions and the ability to stretch the tax paid on a Roth Conversion over three years. Can that be done?

This week's Slott Report Mailbag discusses some complex, timely issues involving RMDs and what happens if someone who takes a Roth Conversion with the intent of spreading the tax over 2011 and 2012 dies suddenly.

Before we even get to the RMDs, what exactly is a successor beneficiary? Let’s say that Great-Uncle Scott dies and leaves his IRA to his daughter Rosemary. Rosemary is the IRA beneficiary. Rosemary names her nephew James as her “successor” beneficiary. If Rosemary dies with funds remaining in her inherited IRA, then James will succeed to her remaining benefit – he becomes the successor beneficiary.

This week's Slott Report Mailbag discusses some complex, timely issues involving social security benefits and required minimum distributions while working past age 70 1/2. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure.

Can an IRA be levied by IRS?The bad news is that, yes, it can be subject to an IRS levy. The good news is that such a levy will not be subject to the 10% early distribution penalty if you are under age 59 ½ at the time of the levy. The amount taken by IRS will be reported as a distribution to you and you will owe income tax on the amount taken by IRS.

Can you convert assets to a Roth 401(k)? We initially tackled this question in a September 22nd article. Well...you need an update.

Required minimum distributions (RMDs) start at age 70 ½ for all traditional IRA owners, including those who have SEP and SIMPLE IRAs set up through their employers - even if they are still working for those employers at the time.