A loan from your IRA can be a tempting and seemingly easy way to get money in a pinch, but it also comes with serious risk. Continue reading An IRA Loan? Yea, Don’t Do That.
Is your paperwork up to date? It could be quite costly if it isn’t. Continue reading Get Your Paperwork Right!
Life can be unpredictable. What might seems like a good idea today can become a bad idea tomorrow. Thus, it can be hard to truly plan for the future when you don’t know what it holds. It’s also what makes life so unpredictable. Luckily (or should that be surprisingly), the IRS realizes this and has allowed some flexibility with what you can do with your IRA(s). For example, they know that there may be times when you need more money than your annual required minimum distribution (RMD). Therefore, they allow for you to take about more than your RMD amount. Continue reading Life is Unexpected. The IRS Has Got Your Back?
If you’ve been staying on top of retirement news over the past 12 months, then you’ve probably read about the passage of the SECURE Act and it’s termination of the stretch IRA as an estate planning tool. Just a quick refresher, but a stretch IRA was an IRA inherited by a beneficiary in which the beneficiary then took required minimum distributions (RMDs) according to his/her life expectancy and not that of the original IRA owner. If the IRA was inherited by a young beneficiary, that meant the funds could grow, possibly over decades, before the inheriting beneficiary reaches 72 and Continue reading The Stretch IRA is Dead. Does That Mean More Freedom?
If you have an IRA, you are probably familiar with the one rollover per year rule it comes to rollovers between the same type of IRA (i.e. traditional to traditional IRA). As stated, the rule only allows one rollover per year between the same type of IRA, regardless of how many IRAs you have. If you have 3 traditional IRAs, you only get one rollover between them all. That’s it. It’s important to know when that 365 day period begins. It does not begin when the money ends up in the final retirement account, but rather when the distribution from Continue reading When Does the 365 Rule Start?
The IRS recently announced retirement account contribution limits for 2020. The quick take away: 401(k) contribution limits are going up, IRA contribution limits stay the same, and just about all other retirement account contribution limits are also going up. Per usual, the increases are minimal. The 401(k) contribution limit is up $500 to $19,500, while the catch-up contributions will increase to $6,500 from $6,000 last year. IRA contributions remain topped out at $6,000 with a $1,000 catch-up contribution for those over 50. Contribution limits have been increasing just about every year in recent memory, so these should really come as Continue reading 2020 Retirement Limits: Some Things Go Up, Some Stay the Same
It can be easy to forget about required minimum distributions (RMDs), especially as you move into retirement or if you inherit an IRA. Now, forgetting to take an RMD isn’t the absolute end of the world, but it should not be taken lightly. The penalty to missing an RMD is half the amount that was to be distributed, which is quite harsh and can be a substantial amount of money depending on the size of your retirement savings. So, what should you do if you forgot to take an RMD or you learned that you needed to take one from Continue reading Miss an RMD? Don’t Panic, But Don’t Brush It Off, Either.
A backdoor Roth IRA conversion can be tempting if you are considering retiring early and are currently over the income limits for a Roth IRA contribution. In case you are unfamiliar, a backdoor Roth IRA conversion is where you contribute money to a traditional IRA and then convert that money into a Roth IRA. This is a useful transaction for those who earn too much income to contribute to a Roth IRA as Traditional IRAs have no income limits. It’s also a perfectly legal transaction. However, when doing a backdoor conversion, keep in mind that the taxman will get his Continue reading The Cautions of Backdoor Roth IRA Conversions
There’s a good chance that you’re familiar with what a Health Savings Account (HSA) is. You may not have one, but you may have considered opening one at some point in recent years as it has become a common offering by many employers. If you are unfamiliar with HSAs, they are tax-free accounts that can be used to pay for qualified medical expenses and are used in conjunction with high deductible health plans. Distributions used to pay to medical expenses are tax free and there are no income limits for contributions. Furthermore, HSAs can be a great long-term investment as Continue reading Going Up? 2020 HSA Limit Increases Announced
Not all income is treated the same by the IRS. There are actually multiple types of income that you could generate and which are taxed differently from one another. For example, the income your generate from working is looked upon differently by the IRS than income generated from the sale of stock. Thus, it’s important that you understand the different types of income and how they are taxed. I’m not going to get into a detained examination in the blog post, but I will describe them in a nutshell. The first type of income is ordinary income, which includes things Continue reading Do You Know the Different Types of Income?