Life is Unexpected. The IRS Has Got Your Back?

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?

Retirement Accounts and Government Coronavirus Relief

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27. It’s a massive relief package designed to help Americans get through these difficult economic and financial times. Yes, this is the legislation that also includes the one-time payments from the government for those below a certain annual salary. While most of the reporting on the CARES Act tends to focus on helping those of working age who find themselves without a job, it does have some advantages for retirees. First off, many retirees will be eligible to receive the highlight of the legislation–those Continue reading Retirement Accounts and Government Coronavirus Relief

Money In, Money Out: The SECURE Act and Age Restriction Changes

If you’ve been reading up on the SECURE Act, then you are probably well aware of the fact that it eliminated the age restriction on contributions to traditional IRAs. This is a big deal for those Americans planning to work into their 70s by allowing them to put money into their traditional IRAs while they continue working. It should be noted, though, that removal of the age restriction does not remove required minimum distribution (RMD) age requirements. That means that people will still need to begin taking RMDs from a traditional IRA at 72, even as they are still making Continue reading Money In, Money Out: The SECURE Act and Age Restriction Changes

Understanding RMDs Under the SECURE Act

As many of you may be aware, the SECURE Act that was recently signed into law made some big changes to retirement for many Americans. Along with opening up opportunities for small businesses to band to together to offer retirement benefits, it raised the age for required minimum distributions (RMDs) to 72. However, that new age for taking RMDs doesn’t go into effect immediately or retroactively. If you turned 70 1/2 in 2019 and thought you could wait a year an a half to take your first RMD, well, that’s not the case. The option to wait until you are Continue reading Understanding RMDs Under the SECURE Act

The SECURE Act Passed. What Does That Mean?

I’ve written about the SECURE (Setting Every Community Up for Retirement Enhancement) Act a number of times over the past year or so. I’m writing now following it’s passing Congress last week as part of the year-end spending bill. Now that President Trump has signed it into law, it goes into effect on January 1, 2020. The legislation is a relatively large overhaul to retirement savings accounts. The two biggest changes are to contributions and required minimum distributions (RMDs). First off, the new law eliminates the age limit for traditional IRA contributions. This means that if you are still working, Continue reading The SECURE Act Passed. What Does That Mean?

Be Sure to Keep Inherited IRAs and Your Own IRAs Separated

If you have more than one IRA, you can aggregate the required minimum distributions (RMDs) and take them from one IRA. Most IRA owners are familiar with this allowance. However, not everyone is aware of that fact that you cannot include inherited IRAs as part of that aggregation. It can be easy to overlook. It should be noted though, that if you inherited multiple IRAs of the same type (Roth vs. traditional) from the same person, you can aggregate the RMDs from those. In short, if you have multiple IRAs, one of which is an inherited IRA, you will need Continue reading Be Sure to Keep Inherited IRAs and Your Own IRAs Separated

Spousal Inherited IRA: Take It or Leave It

If you are married, you may have discussed with your spouse what you plan to do with each others estates should one of your pass before the other. This discussion–and other similar ones–is important and can make the period after the passing of a spouse less difficult than it needs to be. As part of those discussions, you may want to talk about what you both will do with an Inherited IRA, if you or your partner have one. There are really three main options for the spouse inheriting the IRA. The first is to leave the IRA as it Continue reading Spousal Inherited IRA: Take It or Leave It

Miss an RMD? Don’t Panic, But Don’t Brush It Off, Either.

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.

Got a Side Gig? Get Yourself a SEP IRA!

Life–let alone, retirement–can be expensive. Thus, it’s not uncommon for many Americans to hold down a side hustle to earn a few extra dollars. For some, that may mean getting a legitimate second job, while others may look to turn a hobby into a source of extra income. If you decide to go the way of turning a hobby or interest into a business, be sure that you take advantage of the retirement savings benefits. Yes, you can use a small business, side gig to help bolster your nest egg, thanks for SEP IRAs. A SEP (Simplified Employee Pension) IRA Continue reading Got a Side Gig? Get Yourself a SEP IRA!

Taking Advantage of the Retirement Sweet Spot

As you move through your career towards retirement, you will inevitably spend time planning for the future. As part of that planning, you should make sure to take advantage of the IRA “sweet spot” that exists between ages 59 1/2 and 70 1/2. What makes that time period so sweet? Well, for starters, you can start taking distributions from your IRA and not get hit with a early distribution penalty. Now, you will have to pay taxes on that money, but nothing more. You are not required to take money out during that period, but it’s an option. It’s also Continue reading Taking Advantage of the Retirement Sweet Spot