The Stretch IRA is Dead. Does That Mean More Freedom?

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?

Organize Your Retirement Accounts Through Consolidation

Yesterday, I wrote about diversifying your retirement savings by having more than one type of retirement account. While such a concept is a good idea, it also needs to be done reasonably. While it’s okay to have more than one retirement account, it’s not a good idea to have multiple types of the same account or to have so many retirement accounts that you can’t keep track on them. If you find yourself in such a situation, you should consider streamlining your retirement accounts by doing a conversion or rollover so that you only have two, maybe three, accounts. Thus, Continue reading Organize Your Retirement Accounts Through Consolidation

A Creative Way to Avoid RMDs From an Inherited Account

Do you know your options should you inherit an IRA from a spouse? There are often multiple choices regarding what you can do with the money. Furthermore, your options may be impacted by your spouse’s age when they passed, especially if they are under the age of 70½. Your age may also play a factor into your decision. One common option is to roll the IRA money into your own IRA and begin taking required minimum distributions (RMDs) either immediately if you are over age 70½ or when you turn 70½ if you are under that age at the time of Continue reading A Creative Way to Avoid RMDs From an Inherited Account

RMD and Small Business Retirement Plan Changes Could Be Coming

President Trump is expected to sign an executive order today that will direct the Treasury to review the rules on required minimums distributions (RMDs). The initiative directs the Treasury Department to review the rules regarding whether investors can keep more money in 401(k)s and IRAs for longer periods of time, most likely beyond the account owner turns 70½. If changes are made, they could allow for retirees to have more control over when they are required to begin taking money out of their retirement accounts. The executive order also focuses on small businesses and their ability to offer retirement savings plans Continue reading RMD and Small Business Retirement Plan Changes Could Be Coming

Inherit an IRA? Don’t Forget About RMDs!

If you inherit an IRA from someone–most likely a parent–who has passed away and that person was taking required minimum distributions (RMDs) at the time of passing, then you must take the RMD for the year in which the person passed, if they hadn’t already taken it. This can be easy to forget. Even if you properly title the IRA as an “inherited IRA,” you will still need to take that RMD. Thus, you should check with the IRA custodian if you ever inherit an IRA and stay on top of whether an RMD must be taken, which would be Continue reading Inherit an IRA? Don’t Forget About RMDs!

Divide and Conquer: The Benefits of Dividing an IRA

You’ve heard a lot of talk on this blog over the years about consolidating IRAs, particularly as you move through retirement and as a means of maintaining efficiency and control over your money. What we have rarely talked about is actually splitting up your IRAs, which is also a thought you may want to consider–especially if you want to leave money behind for a spouse or children. If that is the case, you should consider dividing your IRA into two, so that the spouse is named as the sole beneficiary of one of those IRAs and your child (or children) Continue reading Divide and Conquer: The Benefits of Dividing an IRA