IRA BLOG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport An estate can become the beneficiary of a person’s IRA in a couple of ways. First, the estate could be named outright as the beneficiary on the beneficiary form. This is not recommended. Why? One...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport The Investment Company Institute (ICI) is an association representing mutual fund companies and similar investment companies. Each year, ICI conducts a survey of the prevalence of IRAs in American...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Question: I have a client who just retired at age 80.  He has $800,000 in his 401(k) plan which is being rolled over to an IRA.  Does he have to take an RMD this year based on the...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport   Did you inherit an IRA from someone who is NOT your spouse? This is not uncommon. Maybe you inherited from a sibling or a parent or a friend. If this is your situation,...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport My biggest gripe with legislation is the same complaint held by most – the bulk of it is written in legalese – i.e., difficult-to-understand language. I am no idiot, but sometimes I sure feel dumb...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport QUESTION: On September 6th in a piece titled, “Rules for Inherited IRAs that May Surprise Nonspouse Beneficiaries,” Sarah Brenner from Ed Slott and Company wrote, “If you inherited the IRA funds in...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Earlier in my career, I worked for a company that sponsored a defined benefit (DB) pension plan. Up to now, I’ve chosen to defer payments from the plan. A few weeks ago, I received an official-looking...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport SECURE 2.0 expands qualified charitable distributions (QCDs) by allowing a one-time only QCD of up to $50,000 to a split-interest entity. As a result of this new rule, there is now a...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport The Ed Slott team answers thousands of IRA and work plan questions annually - emails, phone calls, in-person conversations, webinars, Q&A programs and texts. We accommodate all members of the Ed...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Question: I have a new inherited IRA, and I believe that I am subject to BOTH the 10-year rule and to annual RMDs. Is this true?   My situation:      Original owner was age 92 and passed in...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport If you are thinking of buying an NFT (non-fungible token) with your IRA funds, you may want to reconsider. In Notice 2023-27, the IRS said that NFTs associated with “collectibles” are prohibited IRA...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport Question: I understand that my kids will need to empty my Roth IRA in 10 years, but do they need to take RMDs in years 1 through 9? I am beyond my RMD age. Larry Answer: Larry, Assuming none of your...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport If ever I was traveling from Los Angeles to Atlanta, I would choose a direct flight with no layovers. I want the most efficient route to my destination. Point A to Point B. Take off, land. Assuming...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport The August 28, 2023 Slott Report summarized IRS Notice 2023-62, where the IRS delayed the effective date of the SECURE 2.0 rule requiring catch-up contributions by higher-paid older employees to be made on...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Question: My name is Bruce. I am 65 years old, and I have a question about the SECURE Act. My mother died at age 89 on April 19, 2023, and I inherited her IRA. She had been receiving...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Many IRA assets will ultimately go to nonspouse beneficiaries. When these beneficiaries inherit the funds, special rules kick in. Inherited IRAs are not like your own personal IRA...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport   The lunacy of IRA beneficiary payout rules continues to boggle the mind. As I guide advisors through the options available to their clients, various nuances present one unique scenario after...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Last Friday afternoon (August 25, 2023), the IRS gave employer plans two more years to comply with the controversial SECURE 2.0 rule requiring “catch-up contributions” for high-paid employees to be made on...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport QUESTION: Hello!  I recently came across one of your articles and decided to reach out to you in hopes of getting some clarification re: the Secure Act 2.0 and distributions as a qualified public...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport When an IRA or retirement plan owner reaches a particular age, that account owner typically must begin taking required minimum distributions (RMDs.) The RMD is calculated based on the year-end...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Question: I am struggling to find an answer to my situation. My wife’s 82-year old father passed away about 8 years ago and he was taking IRA distributions. A portion of his IRA was...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport If you are subject to required minimum distributions (RMDs) and have annuitized part of your IRA, a recent law change could drastically reduce your RMDs. But, without IRS guidance, it may be difficult to...

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport The IRS unleashed massive confusion last year. To the surprise of many, it released proposed SECURE Act regulations requiring beneficiaries (on some occasions) to take required...

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Question: I’m age 76. My brother died in December 2022 at 84. Do I take required minimum distributions (RMDs) for the inherited account based on my age or on my brother’s age at death? Answer: Since you’re...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport As already-complicated IRA rules spiral further into an abyss of confusion, it comes as no surprise that irregularities exist. Up is down and left is right. Green means stop, red means throw your...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Greetings, If I have the beneficiaries on my IRA listed as my wife (50%) and two children over 21 (50%), is my wife still able to move her half of the IRA into her existing IRA when I...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport   Are you thinking of naming a child or grandchild as your IRA beneficiary? With the start of the SECURE Act in January 2020, the rules for inherited IRAs were upended....

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   There is no doubt we have written about this topic in past Slott Report entries. Possibly many times. There is also no doubt that people continue to make this same error, over and over...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I inherited an IRA in 2022 upon the passing of my father after he had already started his RMDs. I took a 2023 RMD from it in May 2023.  Your website says I’m not...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Is your child or grandchild working hard this summer? A summer job can be a valuable experience for a young person. Whether it is making smoothies, serving tables, or being a...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport On July 17, we reported that the IRS had issued required minimum distribution (RMD) relief in two situations. First, the Service excused 2023 RMDs for certain IRA (and plan) beneficiaries subject to...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Hi, I have a question regarding solo 401(k)s. Does a solo 401(k) contribution affect the pro-rata rule when considering a backdoor Roth IRA? Best, James Answer: Hi James, No. 401(k) assets...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport We say in our training manuals that “the SECURE Act obliterates IRA trust planning.” That’s an aggressive word – “obliterates” – but it is accurate. We also shout from the mountain top that...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport   If you’re an IRA beneficiary subject to the 10-year payout period and would have had a 2023 RMD (required minimum distribution), you’re in luck. In Notice 2023-54 issued last Friday (July 14),...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   QUESTION: Dear Mr. Slott, I have a client who, during 2022, was separated from employment, turned 55, and took a distribution from his former employer’s 401(k) account. We properly used...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport   You can have too much of a good thing. While it is a good strategy to contribute to an IRA, some contributions are not allowed. When a contribution is not permitted in...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Oftentimes with these articles, I compare certain retirement account rules to arbitrary items. A creative metaphor or simile can help the reader grasp a concept. For instance, past entries have...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I believe we are all waiting for the IRS to issue rules related to distribution requirements (or not) for beneficiaries who are subject to the 10-year rule under the...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport In her June 28, 2023 Slott Report post, Sarah Brenner discussed several reasons why it pays to roll over your retirement plan savings to an IRA. Another option is to keep your funds in the plan. Keep...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Ed Slott and Team, I am 73 and a retired financial planner. I would like to do a partial withdrawal from my 403(b) and do a 60-day rollover back into the same 403(b)....

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport If you are like most American workers, you will change jobs many times during your lifetime. With a job change, you will have a decision to make. What should you do with the...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   When an IRA owner dies, we look to the beneficiary form to determine who should receive the IRA funds. After death, there is a transition process as assets are moved into an inherited...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Hello, I am involved with a traditional non-spouse inherited IRA that was passed from my mother to myself and two siblings in 2022. My mother was 84 when she passed and was taking RMDs. I...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Some of you are aware that there are two types of section 457(b) retirement plans – governmental plans for state and local municipal workers, and “top hat” plans for highly-paid and managerial...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport June is Pride Month. While celebrating, same-sex couples may want to take this opportunity to consider plans for their retirement accounts. Since the SECURE Act and SECURE 2.0...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport   Question: I have a large amount of stock from a previous employer in my 401(k).  I had been reinvesting the dividends for the last 23 years since I left the company.  I no longer want to...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport A couple of years ago I was asked what the tax consequences are when a Roth IRA is split in divorce. After a pause, I answered honestly: “I have no idea…but will find out.” In fact, there is no...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Although the U.S. divorce rate is in a steady decline, it’s still one of the highest in the world. And with divorces often come QDROs – “qualified domestic relations orders.” A QDRO is a state court...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I inherited an IRA from my brother back in 2019. I have been taking required distributions from it each year. Can I do a qualified charitable distribution from this...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Probably the biggest advantage that a spouse beneficiary of an IRA has over other beneficiaries is the ability to do a spousal rollover. Only a spouse beneficiary can do a...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport For deaths in 2020 or later, we know that a non-eligible designated beneficiary (NEDB) of an IRA is subject to the 10-year rule. Meaning, the account must be emptied by the end of the tenth...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: If a 76-year-old is working full time and has a SIMPLE IRA and she does not own any of the company that sponsors the SIMPLE IRA, does she still have to take a RMD (required minimum...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport It looks like IRA owners will probably have to wait awhile to take advantage of a new program that allows them to self-correct IRA errors that previously couldn’t be fixed. In Notice 2023-43, the IRS...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: In 2021, my wife inherited an IRA from her sister who was 4 years younger.  My wife therefore is an EDB (eligible designated beneficiary). Her sister was 66 years old at date of...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport I got into some poison ivy and am suffering the consequences. It takes a few days for the welts to appear, but they are in full bloom. While I did take precautions before starting my yardwork...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport The “once-per-year” rollover rule is one of those IRA rules that has serious tax consequences and cannot be fixed if violated. Breaking the rule results in a taxable distribution and a 10% early...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Hello and thank you for all the great, helpful information you continue to send out. I am due to take my first RMD (required minimum distribution) in 2024 which would...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport   You have likely heard of Health Savings Accounts (HSAs), and you may even understand the basics of how an HSA works. These accounts are really not too complicated. If...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport QUESTION: Do required minimum distributions (RMDs) apply to inherited Roth IRAs? ANSWER: It depends on who the beneficiary is. Owners of traditional IRAs must start taking RMDs when they reach...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Hello, Are you required to take out RMDs (required minimum distributions) on an inherited Roth IRA? The original owner was 82 when he passed away. The funds were left to his nephew, so I...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport   One of the more controversial provisions of the new SECURE 2.0 law concerns 401(k) catch-up contributions. Most 401(k) plans – as well as 403(b) and governmental 457(b) plans – permit employees...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Do you have an IRA you are thinking about converting to a Roth IRA? There are many benefits to converting. You trade an immediate tax bill for the promise of tax-free earnings...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Am I correct to assume if I leave my Roth IRA to my 2 adult children, they will have to take all the money out by the end of year 10 and they will have NO taxes to pay on it because...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport This past week the Ed Slott team hosted another successful conference for our Elite IRA Advisor Group members. Well over 300 advisors from across the country descended on Washington D.C. for...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport It’s certainly not a bad problem to have. But employees with very high compensation cannot have their retirement plan benefits based on all of their pay. Instead, the tax code allows only compensation...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Greetings, There seems to be a lot of conflicting information on Inherited Roth IRAs, for which I was hoping to get a definitive answer from the experts. My...

By Sarah Brenner, JD Director of Retirement Education If you recently converted your traditional IRA to a Roth IRA and you under 59 ½, you will want to know about the five-year rule for penalty-free distributions of converted funds from your Roth IRA. Many people are...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport In my April 12 Slott Report entry (“5 Reasons to Open a Roth IRA Immediately!”), I included a handful of points as to why it was imperative to open a Roth IRA, especially before the tax filing...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Can I make a qualified charitable distribution (QCD) from my IRA to pay for my grandson’s summer church camp? Susan Answer: Hi Susan, You can only make a QCD if the donation would be 100%...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport One important way that IRAs differ from company retirement plans is with respect to spousal financial rights. Most married IRA owners do not need spousal consent before designating a beneficiary other...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport More 401(k) plans are starting to offer Roth options. If you now have this option, you may be wondering what the difference is between a Roth IRA and a Roth 401(k). Which...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Both of my parents passed away last year. My mother passed earlier in 2022 and I was able to take her year-of-death RMD out of the inherited IRA before the end of the year. My dad...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Time is running out! The tax filing deadline is Tuesday, April 18. Why is this important? Because that is the last day an IRA can be opened and/or funded for the previous year. Even if a...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Despite the reduction in the penalty for missing required minimum distributions (RMDs) in the new SECURE 2.0 law, it looks like you will still be able to get the IRS to waive the penalty altogether....

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I have been told that QCDs are not allowed from local and state government 457(b) plans.  I have looked at the accountant’s IRS manual, websites etc. and I can’t find...

Health Savings Accounts (HSAs) are rapidly growing in both size and in number. These accounts offer deductible contributions and tax-free distributions for qualified medical expenses. An HSA can be a valuable tool not only for paying for medical expenses but also for...

Higher education expenses can be steep. Fortunately for those under the age of 59 ½ who need to dip into retirement savings to cover these costs, there is an exception to the 10% early withdrawal penalty. Before tapping your IRA, be sure to understand the fundamentals...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: In a recent blog post, you said that the deadline for contributing to a Roth IRA for 2022 is April 18, 2023.  Does that include converting a traditional IRA to a Roth? Answer: You can make a...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport When you leave your job and aren’t fully vested in your company plan account, the plan will forfeit your unvested portion. Recently, the IRS issued new guidance clarifying the forfeiture rules....

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport The Federal Deposit Insurance Corporation (FDIC) has been in the news recently as bank failures have made headlines. The FDIC is an independent agency created by Congress. It...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is in full swing. That means that the 2022 tax-filing deadline is not far away. Are you considering making a 2022 IRA contribution? Time is quickly running out. Here...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: My daughter had two employers during 2022. The first employer offered a matching 401(k) plan in which she enrolled. The second employer (her current employer) offers...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Spring break. Warm breezes and ocean waves and fancy cocktails are top of mind. The aroma of coconut suntan lotion entwined with barbecue smoke floats on salty air. And when morning light...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport We continue to get questions about the ability of employees to withdraw from 401(k) plans while still working. The tax code includes certain restrictions on these in-service withdrawals. Plans must...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: Hi, I’m looking forward to the July workshop in Boston but hoping you can help with this question now. What happens if an account holder who is over age 59 ½ does a...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is in full swing. That means that the 2022 tax-filing deadline is not far away. Are you considering making a 2022 IRA contribution? Time is quickly running out. Here...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport People on TikTok create investment advice videos? And I’m supposed to trust whatever this talking head is telling me? No chance. Of course, the person on TikTok could hold a number of higher...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Hello, I have an inherited IRA which falls under the 10-year rule. I understand that the IRS has tried to clear up the 10-year RMD (required minimum distribution) confusion but I am still...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Considering that it made 92 new IRA and retirement plan changes and is 357 pages long, it’s not surprising that the new SECURE 2.0 law has several unintended drafting errors and lots of unresolved...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport If you want to leave your IRA to an adult, you simply name that person on the IRA beneficiary form. Unfortunately, when it comes to minors, it is not that easy. When a minor...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: Can an Education Savings Account (ESA) be rolled into a Roth IRA under the recently enacted SECURE 2.0? 529 plans clearly can - beginning in 2024 - but I have found no reference to...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Last week the Ed Slott team hosted another highly successful and sold-out 2-day advisor training program at Caesar’s Palace in Las Vegas. Over 250 financial professionals from across the...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport The new SECURE 2.0 law fixes a glitch that has made it difficult for new solo 401(k) plans to be opened up retroactively for a prior year. A solo 401(k) plan is a great retirement savings vehicle for...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Question: I am interested in your interpretation of the RMD (required minimum distribution) rules using the following facts: Original IRA owner’s DOB is 1/21/29 Original IRA...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport SECURE 2.0 is a mammoth piece of legislation that contains over 90 provisions that affect retirement accounts. While many of these provisions are not game changers, they still...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport By now, most are aware the SECURE Act created a new class of beneficiaries called “eligible designated beneficiaries” (EDBs). This group includes surviving spouses, minor children of the...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Question: Hi, Thank you for all the helpful insight on retirement. I wish I heard about your website earlier. I turned 72 last year and followed your advice on QCDs (qualified charitable...

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport How much can you contribute when you’re in two different retirement plans at the same time or at different times in the same year (e.g., after changing jobs)? The answer is complicated because...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Tax season is upon us. This is the time when you might be thinking about contributing to a retirement account. You may be interested in the Roth IRA, which offers the promise...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport QUESTION: I just inherited my spouse’s inherited IRA (he got it from his father). He (my husband) was already taking required minimum distributions (RMDs) based on his own single life...