The Slott Report | Ed Slott and Company, LLC

The Slott Report

Inherited IRA and Roth IRA RMD Rules: Today’s Slott Report Mailbag

Question: I’m age 76. My brother died in December 2022 at 84. Do I take required minimum distributions (RMDs) for the inherited account based on my age or on my brother’s age at death?

Anomalies and Exceptions

As already-complicated IRA rules spiral further into an abyss of confusion, it comes as no surprise that irregularities exist. Up is down and left is right. Green means stop, red means throw your hands up in exasperation.

What are the Rules for Penalty-Free Higher Education Expense Withdrawals?

If you’re facing the unpleasant prospect of paying college bills for the fall semester, you may be thinking of tapping into your retirement savings to help with the costs. If you’re under age 59 ½, there is an exception to the 10% early distribution penalty for higher education expenses. But there are several rules you need to follow:

Inherited IRAs and RMDs: Today's Slott Report Mailbag

Question: Greetings, If I have the beneficiaries on my IRA listed as my wife (50%) and two children over 21 (50%), is my wife still able to move her half of the IRA into her existing IRA when I am gone? Or does having the adult children as partial beneficiaries inhibit her ability to do a spousal rollover to combine it with her existing IRA?

What You Need to Know if You Name Minor as Your IRA Beneficiary

Are you thinking of naming a child or grandchild as your IRA beneficiary? With the start of the SECURE Act in January 2020, the rules for inherited IRAs were upended. Prior to the enactment of the SECURE Act, naming a minor as a beneficiary was a good way to take advantage of the stretch IRA. A grandparent could name a young grandchild as their IRA beneficiary and distributions could be paid from the inherited IRA for decades over the long life expectancy of the beneficiary.

Roth Conversion Confusion – Taxes Withheld When Under 59 ½

There is no doubt we have written about this topic in past Slott Report entries. Possibly many times. There is also no doubt that people continue to make this same error, over and over again. Such was the case recently when the Ed Slott team visited with 150-plus financial advisors from across the nation in Boston.

Inherited IRAs and Roth Conversions: Today's Slott Report Mailbag

Question: I inherited an IRA in 2022 upon the passing of my father after he had already started his RMDs. I took a 2023 RMD from it in May 2023. Your website says I’m not required to take this RMD. I called the custodian to reverse it, but they said it can’t be done. Is this true?

Q&As on Recent IRS RMD Relief

On July 17, we reported that the IRS had issued required minimum distribution (RMD) relief in two situations. First, the Service excused 2023 RMDs for certain IRA (and plan) beneficiaries subject to the 10-year payout period. Second, it extended the 60-day rollover deadline for retirement account owners born in 1951 who erroneously received distributions in 2023 that weren’t necessary because their first RMD year had been delayed from 2023 to 2024 under SECURE 2.0.

Help a Young Person Use Summer Earnings to Start a Roth IRA

Is your child or grandchild working hard this summer? A summer job can be a valuable experience for a young person. Whether it is making smoothies, serving tables, or being a camp counselor, a summer job can teach life skills and give a first opportunity to manage finances

Backdoor Roth IRAs and Beneficiary RMDs: Today’s Slott Report Mailbag

Question: Hi, I have a question regarding solo 401(k)s. Does a solo 401(k) contribution affect the pro-rata rule when considering a backdoor Roth IRA? Best, James

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