By Sarah Brenner, JD Director of Retirement Education The SECURE Act may have upended the rules for inherited IRAs, but the rules for spouse beneficiaries remain as advantageous as ever. In fact, naming a spouse as an IRA beneficiary is a better option than ever...

By Ian Berger, JD IRA Analyst Rules governing defined benefit (DB) plans are typically more complicated than defined contribution (DC) plan rules. But required minimum distributions (RMDs) are one area where the DB plan requirements are easier to understand. If you’re...

By Ian Berger, JD IRA Analyst Question: Good afternoon. We have a client who was 19 years younger than her spouse. He passed away this year. We are planning to keep this as an inherited IRA for now. Can we move the assets to her own IRA at any time? Thank you, stay...

By Andy Ives, CFP®, AIF® IRA Analyst As we inch toward the extended 2020 tax deadline of May 17, many filers are still laboring over their returns. Some are completing the final return for a loved one lost in what was a brutal year. As is human nature, most taxpayers...

By Sarah Brenner, JD Director of Retirement Education On May 5, the House Ways and Means Committee unanimously passed the Securing a Strong Retirement Act of 2021. According to lawmakers, the proposal is designed to pick up where the SECURE Act of 2019 left off and...

By Sarah Brenner, JD Director of Retirement Education Question: I am 83 years old with an IRA rollover account, regular IRA account and a small Roth IRA. If I convert a portion of either the rollover or regular IRA to a Roth IRA and die before 5 years after the...

By Andy Ives, CFP®, AIF® IRA Analyst When visiting the doctor, does he or she ask foundational questions to help determine your medical condition? Of course. “How are you feeling?” “Are you a smoker?” “What hurts?” Does the doctor take some basic measurements –...

By Sarah Brenner, JD Director of Retirement Education Good news for retirement savers! There is more time to make your 2020 IRA contribution. On March 17, 2020, the IRS extended the 2020 federal income tax-filing deadline to May 17, 2021. The extension also extends...

By Ian Berger, JD IRA Analyst If you sponsor a solo 401(k) plan, beware! The IRS recently announced that it is targeting several employer plan areas for stepped-up auditing. One of those areas is solo 401(k) plans. The fact that solo plans made the list is a signal...

By Ian Berger, JD IRA Analyst Question: Your newsletter is so helpful, and your book was a great resource to me when my mom passed away 5 years ago and I inherited her IRA. I am 76 and have not taken my RMD for 2021. Should I pass away and my wife age 69 transfers my...

By Andy Ives, CFP®, AIF® IRA Analyst This question (or a derivation of it) has been popular as of late: “I only participated in my 401(k) for a couple of months in 2020 before I was laid off. Does that still make me a ‘covered’ employee, and can I contribute to my...

By Sarah Brenner, JD Director of Retirement Education The IRS has delayed the deadline for filing federal income taxes until May 17, 2021. This also extends the deadline for making a 2020 Roth IRA contribution. A Roth IRA offers the promise of tax-free withdrawals in...

By Andy Ives, CFP®, AIF® IRA Analyst With all the recent changes to IRAs under the SECURE Act [i.e., required minimum distribution (RMD) age raised to 72, new rules for beneficiaries, etc.], combined with the CARES Act waiver of RMDs last year, it comes as no surprise...

By Sarah Brenner, JD Director of Retirement Education Question: A new customer came to me asking for help with an IRA. Unfortunately, he had already accepted a check from the 401(k) plan made out to him personally. He sat on the check for 5 months and deposited it...

By Ian Berger, JD IRA Analyst Just a few weeks after the start of the baseball season, the IRS has thrown us a curveball by apparently interpreting the SECURE Act 10-year payout rule in a totally-unexpected way. We say “apparently” because the IRS explanation isn’t...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Hi, I inherited my husband's 401(k) when he died last year. I kept the assets with the 401(k) administrator, believing I had to do that to take distributions without 10% penalty. (I am under 59 ½ years old). If I roll...

By Sarah Brenner, JD Director of Retirement Education Required minimum distributions (RMDs) were waived for 2020 but they are back now for 2021. This includes the RMD for the year of death of the IRA owner. The rules for this RMD can be tricky. One question that comes...

George Nichols III is the 10th President and Chief Executive Officer in The American College of Financial Services’ storied history. He continues to take motivation from founder Solomon Huebner’s pioneering vision in 1927, while empowering The College to usher in the...

By Ian Berger, JD IRA Analyst Question: Hi, Ed, I am hoping I get to attend one or more of your events IN PERSON this year! If you have time for a refresher . . . . Jon’s 2021 RMD is $200k. He takes $100k as a distribution to himself in February and later, he decides...

By Andy Ives, CFP®, AIF® IRA Analyst In my blog entry from March 22, I discussed the formula for calculating the amount of a direct Roth IRA contribution when your income falls within the Roth phaseout limits. Another common phaseout covers how much of a Traditional...

By Sarah Brenner, JD Director of Retirement Education Question: Has the deadline to make an IRA contribution for 2020 been extended since the 2020 tax filing date has been extended to May 17, 2021? Robert Answer: Hi Robert, Yes. The 2020 IRA contribution deadline is...

By Ian Berger, JD IRA Analyst Fewer and fewer workers are participating in defined benefit pension (DB) plans these days. The high cost of maintaining those plans has led many employers to terminate existing plans and dissuaded many others from setting up new plans in...

By Andy Ives, CFP®, AIF® IRA Analyst When it comes to contributing directly to a Roth IRA, an individual must have modified adjusted gross income below a certain level. This income level cutoff is not a “cliff,” meaning if you go one dollar over the level, you do...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Hi, I found you by searching to find out if we can offer two SIMPLE IRA options for our employees. I don't know if that is something permitted. The idea is to have a cryptocurrency option set up as a SIMPLE in addition to...

By Sarah Brenner, JD Director of Retirement Education The CARES Act waived required minimum distributions (RMDs) for 2020, but they are back for 2021. The return of RMDs for this year has raised questions about how these distributions should be calculated. Here is...

By Ian Berger, JD IRA Analyst We’ve been getting a number of questions lately about whether it’s too late to set up a new solo 401(k) plan for 2020. The answer is “sort of.” Business owners with no employees (other than a spouse) can contribute to a solo 401(k) plan....

By Ian Berger, JD IRA Analyst Question: I have self-directed traditional and Roth accounts at an SDIRA Custodian.  Can I do a Roth  conversion of an illiquid asset from the traditional to the Roth account?  The investment I want to convert is a debt-only asset (no...

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Casinos have house rules. These rules dictate what patrons can and cannot do. They are often written down, posted, and there is no debating the validity of said guidelines. House rules govern...

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport For those just starting out, saving for retirement can be challenging. For young workers, paying the rent and buying the week’s groceries may take priority and there is only so...

By Sarah Brenner, JD Director of Retirement Education Question: I am 75 years old and am planning to retire this year.  I have a 401(k) plan with my employer and, I assume, need to roll it over into an IRA.  In this case do I need to take a 2021 RMD?  If so, how is it...

By Ian Berger, JD IRA Analyst For an area as highly regulated as IRAs and company plans, it’s not surprising that there’s a ton of abbreviated terms to keep track of. Here’s 18 common ones that you should know: CARES Act. The Coronavirus Aid, Relief, and Economic...

Thursday, February 25, 2021 A Preview of Ed Slott’s New Book: The New Retirement Savings Time Bomb By Ed Slott, CPA If you’re a dedicated Ed Slott and Company fan, at this point, you’ve likely heard about my upcoming new book, The New Retirement Savings Time...

By Sarah Brenner, JD Director of Retirement Education Have you contributed to a Roth IRA for 2020? If you have not, you still have some time. The deadline for making a prior year contribution is the tax-filing deadline, not including any extensions you might have. For...

By Ian Berger, JD IRA Analyst When we think of rollovers, we normally think of moving funds from a 401(k) (or other company plan) to an IRA. But it sometimes makes sense to consider a “reverse rollover” – from an IRA to a 401(k). Unfortunately, although 401(k) plans...

By Ian Berger, JD IRA Analyst Question: Hi, I have a client that took a $14k IRA distribution on 1/10/2021 and another $14k distribution on 2/10/2021. He wants to replace all $28k using the 60 day rollover as funds are no longer needed. Does the 60 day rollover rule...

By Andy Ives, CFP®, AIF® IRA Analyst Surprisingly, the rules governing what happens when an ex-spouse acquires a Roth IRA after divorce are unclear. There are no specific directions in the Tax Code or in the regulations. However, there is definitive guidance for a...

By Sarah Brenner, JD Director of Retirement Education Whenever there is a new administration there is a lot of uncertainty about what the change will mean for retirement accounts. In 2021, this change is happening in the middle of a pandemic that has upended the lives...

By Andy Ives, CFP®, AIF® IRA Analyst Question: I am going to turn 72 in December of 2021. When I take my RMD, what is the dollar amount I use to calculate my RMD? Is it the account value ending December 31, 2020, or December 31, 2021? Thank you for any clarification....

By Ian Berger, JD IRA Analyst One of the many unfortunate effects of the coronavirus pandemic is the number of folks who have lost their jobs. Besides the loss of income, many of these individuals also face unexpected and unpleasant tax consequences if they have an...

By Sarah Brenner, JD Director of Retirement Educations Question: Hi! I am over 60 and have had a self-directed Roth IRA for the past 15 years. I would like to roll some of it over to another self-directed Roth where I could invest in crypto-currency. Is this possible?...

By Andy Ives, CFP®, AIF® IRA Analyst It is early 2021 and two ingredients mix again: retirement money in motion, and required minimum distributions (RMDs). This may not appear to be a dangerous concoction, but when improperly combined, the results can be a bitter...

By Sarah Brenner, JD Director of Retirement Education A Simplified Employee Pension (SEP) is a popular choice for many small employers. Although these plans are in fact designed to be less complex than other types of retirement plans, there are many ways to go wrong...

By Ian Berger, JD IRA Analyst The Internal Revenue Code is over 4,000 pages of often unintelligible tax jargon. So, it shouldn’t surprise anyone that the law contains more than its share of baffling and inconsistent provisions. Here are four examples pertaining to...

By Ian Berger, JD IRA Analyst Question: I hope you can help me with this, as I cannot find the answer anywhere or from anyone. In 2019, my client Frank, passed away. His cousin, Lisa, inherited his IRA. In 2020, Lisa passed away. Her husband, Rob, inherited the IRA....

By Andy Ives, CFP®, AIF® IRA Analyst Here we go again…barreling headlong into another tax season. This year will be like no other. With all the crazy that was 2020, many tax filers will discover some new and interesting items on their tax returns. For example – did...

By Sarah Brenner, JD Director of Retirement Education The rules for rolling over IRA distributions can be complicated at any time of the year. They are especially challenging at the end of the calendar year. Surprisingly, sometimes IRA owners have doubts as to whether...

By Sarah Brenner, JD Director of Retirement Education Question: We had a client who died with no beneficiaries on his $500k 401(k). He wasn’t married and only 45 years old. His parents are disclaiming rights to the inheritance, so it’s going to his siblings. Is there...

By Ian Berger, JD IRA Analyst Coronavirus-related distributions (CRDs) are no more. Millions of Americans took advantage of the opportunity to make penalty-free withdrawals from their IRAs and 401(k) plans in 2020. But unless Congress resurrects them, CRDs are no...

By Andy Ives, CFP®, AIF® IRA Analyst As we enter tax season and consider last year’s transactions, it bears repeating: Roth IRA contributions can be recharacterized, Roth conversions cannot. A Roth IRA contribution can be recharacterized (changed) to a Traditional IRA...

By Andy Ives, CFP®, AIF® IRA Analyst Question: I recently retired and I plan to relocate to Tennessee. I would like to purchase a new home. Can I pull funds from my IRA to do so, and what would be the implications? Thank you. Edna Answer: Edna, If you are over 59 ½,...

By Sarah Brenner, JD Director of Retirement Education The SECURE Act made many changes to the rules for beneficiaries who inherit retirement accounts. One of the most significant ones is the end of the stretch IRA for most beneficiaries. However, there are some...

By Ian Berger, JD IRA Analyst There’s been some confusion about the retirement plan aspects of the COVID-19 stimulus package signed into law on December 27, 2020. One national news network has reported that the new law extends the CARES Act tax breaks for...

By Andy Ives, CFP®, AIF® IRA Analyst We are just a few days into the new year, and many people are anxious to get their full IRA contributions in for 2021. However, a common question is, “It’s only the first week of the year and I haven’t received a paycheck yet. Can...

By Sarah Brenner, JD Director of Retirement Education A new year brings a fresh start, and after 2020, we need that more than ever. You probably have a few resolutions for 2021. When making your list of goals for the new year, don’t overlook your IRA. Here are a few...

By Sarah Brenner, JD Director of Retirement Education Question: Can a retired person not working contribute to a Roth IRA? Answer: There are no age limits for Roth IRA contributions. This allows older people to contribute. However, the rules do require earned income....

By Ian Berger, JD IRA Analyst From The Slott Report, December 30, 2019: “2020 promises to be an exciting year in the IRA and savings plan worlds, as the full ramifications of the new SECURE Act begin to take shape. Beyond that, the IRS will likely finalize the new...

By Andy Ives, CFP®, AIF® IRA Analyst Ah, the end of the year. Snow is drifting, music plays quietly in the background. Ma in her kerchief, Papa in his cap, just settling down for a long winter’s nap… Nope. No time for that. ‘Tis the season of BUSY, BUSY, BUSY! Did you...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Recently, I received two checks, one for all assets in a Traditional IRA and one for all assets in a Roth. Mindful of the 60-day rollover rules, I endorsed one of them to my brokerage company to complete an IRA-to-IRA...

By Sarah Brenner, JD Director of Retirement Education We at the Slott Report would like to wish all our readers a happy and safe holiday season. 2020 has been a year like no other. Thank you for taking your valuable time to read the Slott Report during this...

By Ian Berger, JD IRA Analyst One year ago from yesterday (December 20, 2019), President Trump signed into law the SECURE Act. At that time, virtually no one had heard of the coronavirus and certainly very few (if any) could have foreseen the global pandemic that’s...

By Ian Berger, JD IRA Analyst Question: Hello, Can you still recharacterize a Roth contribution (due to income limits) to a Traditional IRA and then subsequently convert the IRA back to a Roth in the same year? Will this conflict with the new law that prohibits...

By Andy Ives, CFP®, AIF® IRA Analyst Bob is 40 years old. He is a single tax filer, participates in a 401(k) at work, and makes a healthy annual salary of $160,000. Bob has consistently contributed $5,000 each year to his Traditional IRA for 5 years ($25,000 total)....

By Sarah Brenner, JD Director of Retirement Education The end of 2020 is almost here. With the end of the year come certain retirement account deadlines. Here are 5 items you should have on your 2020 year-end retirement plan to-do list: 1. Do a 2020 conversion If you...

By Sarah Brenner, JD Director of Retirement Education Question: I am 79 and still employed. My employer has an SEP for me and I have a Rollover IRA from a previous employer. Can I transfer my Rollover IRA to the SEP account? Thank you, George Answer: Hi George, There...

By Ian Berger, JD IRA Analyst Thinking of using your IRA as a “short-term loan” to raise some extra cash for the holidays?  What could go wrong? Well, actually, two major things could go wrong. And either could lead to serious tax headaches. Let’s say Chloe started...

By Andy Ives, CFP®, AIF® IRA Analyst Recently we became aware of a multi-layered tax strategy that we think is a bridge too far when it comes to Coronavirus-related distributions (CRDs). In fact, it may even be outright tax fraud. As most readers are aware, the CARES...

By Andy Ives, CFP®, AIF® IRA Analyst Question: My father passed away in 2019 and left me an IRA. Will the SECURE Act apply, or will it be grandfathered under the pre-2020 rules? Thank you. Aram Answer: Aram, Since your father passed away in 2019, we will default to...

By Sarah Brenner, JD Director of Retirement Education The clock is ticking if you are considering converting your Traditional IRA to a Roth IRA in 2020. More IRA owners are making this move this year as historically low tax rates and COVID-related income losses have...

By Ian Berger, JD IRA Analyst Thanksgiving is behind us, and the end of the year will be here soon. (Many of us are truly thankful for that!)  This is a good time to remind you of certain tax breaks that will expire before we turn over the calendar to 2021. Many of...

By Andy Ives, CFP®, AIF® IRA Analyst We have collectively crawled into the hollow of a 2020 tree and found ourselves in the Upside Down. (That is a “Stranger Things” reference, for the uninitiated.) The SECURE Act turned beneficiary options upside down. The CARES Act...

By Sarah Brenner, JD Director of Retirement Education The IRS has recently added a new reason for self-certification of late rollovers to its list. Revenue Procedure 2020-46 modifies the list of reasons to include an IRA or company plan distribution made to a state...

By Ian Berger, JD IRA Analyst Question: Good Morning, We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year? Thank...

By Ian Berger, JD IRA Analyst We continue to get questions about the limits that apply for folks who participate in multiple company savings plans at the same time or who switch jobs in the middle of the year. What’s confusing is that there are two limits – the...

By Andy Ives, CFP®, AIF® IRA Analyst With Veterans Day being just last week, an overview of two military retirement benefits felt like an all-important and appropriate topic of discussion. One benefit pertains to a penalty exception for accessing retirement dollars...

By Sarah Brenner, JD Director of Retirement Education Question: Is there any problem with someone who is self-employed and has an active SEP making a deductible SEP contribution and an IRA QCD after age 70 1/2?  In this case, the QCD would come from the IRA while the...

By Sarah Brenner, JD Director of Retirement Education Both Roth 401(k)s and Roth IRAs offer the ability to make after-tax contributions now in exchange for tax-free earnings down the road if the rules are followed. However, there are some important differences between...

By Ian Berger, JD IRA Analyst Good news! You can look forward to somewhat smaller required minimum distributions (RMDs) from your IRA and company retirement savings plan beginning in 2022. That’s because, on November 6, the IRS released new life expectancy tables that...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Great work you all do. Been a reader of Ed for a long time. How would this scenario work? New client of mine's husband passed away in 2019 and he had not taken his RMD. The plan was to transfer the account to my firm and...

By Andy Ives, CFP®, AIF® IRA Analyst When a person under the age of 59 ½ takes a withdrawal from their IRA or company plan - like a 401(k) – there is a 10% penalty. However, this penalty can be avoided if the withdrawal qualifies for an exception. Some exceptions...

By Sarah Brenner, JD Director of Retirement Education The year 2020 has been a challenging one. With coronavirus cases rising in most of the country and economic relief stalled in Congress, many individuals may be looking to find funds to pay urgent bills. One...

By Ian Berger, JD IRA Analyst Question: Our estate planning attorney prepared trust documents a few years ago and he advised us to name the trust as a beneficiary.  This was done after discussion with him regarding a situation in case our son(s) divorce their wives. ...

By Ian Berger, JD IRA Analyst The October 19, 2020 Slott Report article, "Don't Overlook After-Tax Contributions!," explained how after-tax contributions in company plans work and discussed the dollar limits on them. This article will explain how distributions of...

By Andy Ives, CFP®, AIF® IRA Analyst Trick-or-treating in the time of a pandemic is a challenge. Social distancing while handing out candy requires some creativity. The Slott Report has elected to place a big bowl of random treats in front of our house for the kids to...

By Sarah Brenner, JD Director of Retirement Education Question: Hello, If an individual has a solo 401(k), is this considered a "retirement plan at work" that would limit the deductibility of IRA contributions? Thanks! Susan Answer: Hi Susan, Being an active...

By Sarah Brenner, JD Director of Retirement Education Question: Hello, If an individual has a solo 401(k), is this considered a "retirement plan at work" that would limit the deductibility of IRA contributions? Thanks! Susan Answer: Hi Susan, Being an active...

By Ian Berger, JD IRA Analyst With the popularity of Roth 401(k) contributions, after-tax employee contributions have gotten short shrift. But, if your plan offers them, after-tax contributions are worth considering because they can significantly boost your retirement...

By Andy Ives, CFP®, AIF® IRA Analyst Question: An 85-year-old died in 2020 and left his IRA to his 53-year-old son. Father did not take 2020 $107,000 RMD. Does the son have to take it? Does the son have to take anything in first 9 years, including this RMD? Thank you....

By Andy Ives, CFP®, AIF® IRA Analyst As Halloween approaches and the leaves change color, families gather ‘round weekend campfires, roast marshmallows, and share spooky stories. Watchful owls hoot in the dark. In the distance, a wolf howls at the moon. A rustle in the...

By Sarah Brenner, JD Director of Retirement Educations For trusts that inherited an IRA in 2019, an important deadline is approaching. October 31, 2020 is the due date to provide required trust documentation to the IRA custodian to ensure that the longest payout...

By Ian Berger, JD IRA Analyst Question: Sir, I inherited an IRA from my sister two years ago. She was collecting RMDs at 78. My question involves collecting my sister’s RMD. Does the 10-year withdrawal go into effect now or do I use the table under my age, which is...

By Ian Berger, JD IRA Analyst With the recent economic downturn, you may be more concerned than ever about keeping retirement plan funds safe from creditors. If you participate in a plan covered by the federal Employee Retirement Income Security Act (ERISA), you can...

By Andy Ives, CFP®, AIF® IRA Analyst Many years ago, my wife and I went to lunch at a pizza joint in a strip mall. The friendly gray-haired host in sensible shoes (whom I pegged for mid-to-late 60’s), tucked two menus under her arm, grabbed a couple sets of silverware...

By Sarah Brenner, JD Director of Retirement Education Question: Would you kindly clarify the rule that governs the withdrawal period and the tax implication (if any) of RMDs from an inherited IRA? The SECURE Act and the IRS document 590B are not clear. Here is the...

By Sarah Brenner, JD Director of Retirement Education Times are tough. Unemployment is high and bills are piling up for many. These realities have forced a lot of people to look for sources of extra cash. For many Americans, their IRA is their biggest, or maybe only,...

By Andy Ives, CFP®, AIF® IRA Analyst Question: Hi there! I have a quick question, so I thought I’d reach out to you to get your take on this. This year, IRA RMD’s have been waived, even for inherited IRA’s. That said, if a non-spouse inherits an IRA this year – and...

By Andy Ives, CFP®, AIF® IRA Analyst An argument could be made that the easiest financial document to complete is the IRA beneficiary form. Yet somehow this basic information consistently gets overlooked, mishandled, lost or fouled up. It’s not rocket science. Don’t...

By Ian Berger, JD IRA Analyst Think of a top hat, and you’ll likely conjure up images of Franklin Delano Roosevelt or the temporarily-deceased Mr. Peanut or Rich Uncle Moneybags from Monopoly. But a “top hat plan” is also the informal name of a type of section 457(b)...

By Ian Berger, JD IRA Analyst Question: Ed and team, I am sure my question has been asked by others.  Now under the SECURE Act with no more stretch features to an inherited IRA, if a person dies and leaves his IRA to a child and that child waits 9 years and 11 months...

By Sarah Brenner, JD Director of Retirement Education A significant percentage of IRA assets will ultimately go to nonspouse beneficiaries. When these beneficiaries inherit the funds, special rules kick in. Inherited IRAs are not like other IRA accounts. Here is what...

By Andy Ives, CFP®, AIF® IRA Analyst Gradually, the IRS is clarifying sections of the SECURE Act that require further guidance. In Notice 2020-68, released September 2, the IRS addressed a number of items in a Q&A format. For example, “Is a financial institution...