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?

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?

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!

Trusting in a Trust

There’s a good chance that you have a will, especially if you have assets that you want to share once you have passed on. If you don’t have many assets or few family and friends to share them with, then you can get by with a simple will (i.e. maybe a page or two long saying who gets what). However, if you have young children–or grandchildren–a simple, boilerplate will probably won’t cut it. Furthermore, if you find that your will may end up leaving a large inheritance to a child or young adult, you will want to consider guidelines and Continue reading Trusting in a Trust

How to Prepare for Retirement as a Sole Proprietor

Owning your own small business or sole proprietorship can be a lot of work. Depending on what industry you operate in and what your overhead costs are, it can be tough to eek out a profit or pay yourself what you really think you’re worth. Thus, planning for retirement as a small business owner can seem like a fruitless endeavor, especially if you are struggling to keep your business afloat. However, that doesn’t mean you can’t save for retirement. You can open an IRA and will have options regarding what type of IRA you open regardless of how much you Continue reading How to Prepare for Retirement as a Sole Proprietor

Retirement Account Mistakes Happen. Just Make Sure You Correct them.

The rules surrounding retirement savings accounts can be complicated. As such, it’s not uncommon for people to make mistakes when it comes to saving for retirement. Luckily, the rulemakers realize this also and allow for corrections of many retirement savings account errors and mistakes. It should be noted however, that many mistakes are not penalty free, regardless of whether you correct the error in a timely fashion or not. However, taking the steps to correct an error can keep those penalties to a minimum and potentially save you thousands of dollars in both taxes and penalty fees. Furthermore, the corrective Continue reading Retirement Account Mistakes Happen. Just Make Sure You Correct them.

Make Sure You Understand Early Distribution Exceptions

Thinking about taking an early distribution from your retirement plan and believe you can do so without getting hit with a penalty? You should be very, very careful in doing so. Yes, there are times when taking an early distribution is appropriate and you can avoid an early distribution penalty, but such situations are often few and far between. Aside from avoiding early distributions at all costs, you should really speak with a certified financial planner or retirement expert as part of the consideration process if you are fairly serious about doing so. While there are a number of ways Continue reading Make Sure You Understand Early Distribution Exceptions

Self-Directed IRA? Make Sure You Read the Custodial Agreement

A self-directed IRA can be a unique way to fund your retirement. If you are considering investments that are most often outside purview of the traditional asset classes–which are usually stocks, bonds, or mutual funds–then a self-directed IRA might be a great option. With a self-directed IRA, you can hold alternative investments–such as real estate or futures–which can help fund your retirement. While there are IRS rules that rule out certain investments when it comes to self-directed IRAs (i.e. most collectibles, investing in life insurance, etc.), what can really trip you up is the custodial agreement. While IRS rules govern Continue reading Self-Directed IRA? Make Sure You Read the Custodial Agreement

401(k) RMD? It’s the First Yearly Distribution That Counts

When you have to take required minimum distributions (RMDs) from a 401(k), don’t forget that the rules state that the first money paid out of the account for that year is considered an RMD. This is big, especially if you are interested in doing a qualified charitable distribution (QCD) or planning on taking other distributions from your 401(k). Thus, if you are over age 70 ½ and are taking your first distribution from your 401(k) account for the year, you need to be wise and really think about what you want to do with the money and how much you Continue reading 401(k) RMD? It’s the First Yearly Distribution That Counts