When it comes to saving for retirement, most people understand the basics. They set up an IRA, begin making contributions, and let the balance grow. The stumbling block tends to happen later, when it’s time to move those funds. That’s when your clients hear terms like “transfer” and “rollover,” and may end up doing the exact opposite of what they should.
Read MoreThe backdoor Roth contribution works especially well if your client doesn’t have any other pretax assets in any Traditional (including those holding SEP assets) or SIMPLE IRAs.
Read MoreThe deadline for removing 2024 excess contributions and completing recharacterizations is on the horizon. An IRA owner has until his tax return due date, plus extensions, to remove an excess contribution or recharacterize a 2024 contribution.
Read MoreFinancial organizations are not required to send notices to clients or report to the IRS when an annual payment must be taken from an inherited IRA. The beneficiary is responsible for knowing and taking any required life expectancy payments.
Although not required, many financial organizations assist their clients with this calculation.
Read MoreMost pretax retirement savings are taxed as ordinary income, taxed at one’s marginal tax rate. But under specific circumstances employer securities can be taxed differently.
Read MoreThe introduction of code Y has brought up a lot of questions. Here’s what we know so far, and what information we hope to see by the end of the year.
Read MoreWhen clients bring inherited IRAs from other financial organizations to yours, your team must know which information to collect in order to ensure a smooth transition.
Read MoreNo one wants to be caught unprepared by an IRS audit. Because the best defense is a good offense, here are some tips and tricks to review your own files so you can learn what areas may need your attention.
Read MoreWhen an IRA owner dies, the assets are distributed to beneficiaries, whether named by the IRA owner or determined by IRA document defaults. This can sometimes be a complicated process for financial organizations. And further complications may arise when the original beneficiary dies, leaving the inherited IRA to a successor beneficiary.
Read MoreEveryone loves a good summer to-do list and we’re here to help. It’s the perfect time to survey your IRA department and see how you’re doing and what can be improved or implemented.
Read MoreAs your financial organization prepares to file Form 5498, IRA Contribution Information, to the IRS and send copies to your clients, it is a great time to familiarize yourself with what the form reports.
Read MoreBuried within the newly released 2025 Form 1099-R instructions is a reporting change you may have missed, but one that is important to know about if you work with IRAs.
Read MoreIRAs and qualified retirement plans (QRPs) are intended to be used for retirement. Therefore, the tax laws and regulations encourage people to leave their money in an IRA or QRP until they retire. If distributions are taken from an IRA (including an IRA holding SEP contributions) or QRP before the account owner reaches age 59½, a 10 percent early distribution penalty tax is assessed on the taxable amount of the distribution, unless a penalty tax exception applies.
Read MorePower of attorney (POA) legal arrangements are becoming a prevalent tool that retirees use to manage their finances—including their IRA assets. Under such an arrangement, an individual—including an IRA owner—may grant to another the legal authority to act on his behalf in financial or other matters. To reduce liability, financial organizations should create a process for reviewing, accepting, and responding to a POA.
Read MoreThe SECURE Act—officially known as the Setting Every Community Up for Retirement Enhancement Act of 2019—made significant changes to IRA and retirement plan rules, including to the beneficiary payout options. One of the most noteworthy changes involves the 10-year rule, which requires a total distribution of inherited assets by December 31 of the year containing the 10th anniversary of the account owner’s death.
Read MoreAn owner must begin taking money out of her 401(k) plan by April 1 of the year following the year in which she attains age 73 (also known as the owner’s required beginning date).
Read MoreTraditional Individual Retirement Accounts, better known as IRAs, were created by the Employee Retirement Income Security Act of 1974 (ERISA) and have revolutionized how Americans save for their golden years. They became available on January 1, 1975.
Read MoreAlthough IRAs are meant to provide individuals with a source of income during retirement, many clients may want to incorporate their IRAs into their overall estate planning. In such cases, while making clear that you are not providing tax or legal advice, you may find yourself discussing IRA beneficiary options with clients. Beneficiary options—especially for Roth IRAs—can be confusing.
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