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The Slott Report

Disability and the Exception to 10% Early Distribution Penalty

Distributions taken from an IRA before attaining the age of 59 ½ are generally subject to an early distribution penalty of 10% of the taxable amount of the distribution. Congress put the penalty in place to deter IRA owners from using their funds before their retirement. However, Congress also realized that sometimes we really do have a need for these funds so they made some exceptions to the penalty. One of these exceptions is the disability exception. But there is a catch.

Can I Open a Roth IRA and Fund it with my IRA?

This week's Slott Report Mailbag examines ERISA creditor protection differences for 401(k)s and IRAs and answers a consumer's question on funding a Roth IRA.

6 Things to Know if You Are Thinking about a 2016 Conversion

Are you considering converting your traditional IRA to a Roth IRA in 2016? If you are making this important decision, here are 6 things you will want to know.

A Tale of Two IRAs: Using a Series of Substantially Equal Periodic Payments to Fund an Early Retirement

Multiple studies suggest that we often end up retiring earlier than initially anticipated or hoped. One study by JPMorgan Asset Management found that although two-thirds of current workers plan to continue working until age 65, fewer than one in four actually manage to do so. Although the reasons vary, premature retirement poses a two-fold portfolio stress - a shorter accumulation time and a longer withdrawal period. It also presents a potential tax complication when you've not reached 59 ½ - that magic age at which you can withdraw retirement money without an additional 10% premature distribution penalty.

Social Security and The Election: Jeffrey Levine on Wall Street Journal Podcast

Ed Slott and Company Chief Retirement Strategist Jeffrey Levine sat down with The Wall Street Journal's Veronica Dagher to discuss how the presidential candidates - Hillary Clinton, Donald Trump and Gary Johnson - want to handle Social Security and other retirement planning issues.

What Now? A Widow's Story About Making the Right Financial Decisions

In 2006, Alan, a strapping young man who had just turned 50, collapsed and died of a massive heart attack while attending Sunday morning Mass with his wife Karen. Alan and Karen co-owned a business. Alan was a contractor and Karen handled the accounting and billing. Karen was fairly savvy financially. However, because she felt she had to get everything settled “right away” after Alan’s passing, she made several costly mistakes. It's a story you and your clients can learn from.

Excess IRA Contributions - Too Much of a Good Thing

You can have too much of a good thing. A contribution to your IRA is a great way to save for retirement, but there are limits. If you exceed those limits you will end up with an excess IRA contribution and a tax mess. This was the fate of two taxpayers in a recent court case, where mega IRA contributions resulted in excess contributions and penalties.

Too Many Roth IRAs? It's Time to Consolidate

A common strategy is to go through with smaller Roth IRA conversions or to convert different assets to different Roth IRAs. If you have done this over a number of years, you probably have more Roth IRAs than you know what to do with. Maybe it is time to consolidate. Here's why.

Defining "Children" For Estate Planning Purposes Is More Complicated Than You Might Think

"I leave the remainder of my assets to my children." Of all the provisions that may be found within your will or trust, this would seem to be one of the more straightforward of such items... right? Well, you might think so, but that’s not always the case.

Widows Can Now Take Control of RMDs When Spouse Passes Away

According to the US Census Bureau, approximately 800,000 people are widowed each year in the United States, and “nearly 700,000 of them are women who lose their husbands.” One of the greatest economic challenges for a large portion of widows in America is higher income taxes when their spouse passes away. Don Rasmussen, member of Ed Slott's Elite IRA Advisor Group, outlines how widows can take control of required minimum distributions when their spouse passes away ... lowering their tax bill.

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