Financial Ducks In A Row • Independent financial advice: IRA, Social Security, income tax, and all things financial

Beyond 401(k) and IRA

Feb 19th, 2020

Photo credit: malomar

You’re contributing as much as you’re allowed to a 401(k) or other employer-sponsored retirement plan. If your income allows it, you’re also contributing the maximum annual amount to your Roth or traditional IRA. But you still want to set aside more money beyond 401(k) and IRA, to make sure your retirement is everything you hoped for. What options do you have? Here are some things to consider…

Before moving beyond – are you really maxing our your 401(k) and IRA?

IRAs and employer-sponsored retirement plans like 401(k)s have some real advantages when it comes to saving for your retirement. So, before you go any further, make sure you’re really contributing all you can.

In 2020, most individuals can contribute up to $19,500 to a 401(k) plan, and up to $6,000 to a traditional or Roth IRA (subject to income limitations). If you’re age 50 or better, though, you can make up to an additional $6,500 in “catch-up” contributions to your 401(k) in 2020, and an additional $1,000 to your traditional or Roth IRA. What’s more, if you file a joint tax return with your spouse, your spouse may be able to make a full IRA contribution, even if he or she has little or no taxable compensation. (See Spousal IRAs for Stay at Home Parents for more details.)

Above and beyond the deductible limit described above, most 401(k) plans also allow for non-deductible contributions. The limit for all contributions to your 401(k) plan, including deductible and non-deductible contributions and the over-50 catch-up, is $63,500 for 2020. The great benefit to the non-deductible contributions is that you can be eligible to rollover these non-deducted contributions directly to a Roth IRA (subject to plan restrictions). This is known as the mega-backdoor Roth IRA contribution, and it can really be a big deal.

Taxable investment accounts

Your other primary option is to invest through a taxable investment account. The lower federal income tax rates that apply to long-term capital gains and qualifying dividends go a long way toward taking the bite out of holding investments outside of a tax-advantaged retirement account like a 401(k) or IRA. And, a taxable investment account offers one enormous advantage: You have a tremendous amount of flexibility. You can choose from a virtually unlimited selection of investments, and there’s no federal penalty for withdrawing funds before age 59½.

Investment options worth mentioning:

Mutual funds or separately managed accounts (SMAs) managed for tax efficiency intentionally minimize current taxable distributions
Indexed mutual funds and exchange-traded funds (ETFs) trade infrequently and therefore tend to have low annual taxable distributions
Tax-free municipal bonds and municipal bond funds generate income that is free from federal and/or state income tax

The other big benefit of a taxable account is that if you don’t use the money in the account and it is invested in appreciating assets (like growth stock funds, for example), when you die, your heirs will be eligible for a step-up in basis on the asset value. This way, when the heirs sell the assets, they will only be taxed on growth of the assets after your death. The growth from the time you purchased the asset until your death is completely tax-free (subject to possible estate taxation at state and federal levels).

Always keep the big picture in mind

Your investment decisions should be based on your individual goals, time frame, risk tolerance, and investment knowledge. You should evaluate every investment decision with an eye toward how the investment will fit into your overall investment portfolio, and whether it will meet your general asset allocation needs. A financial professional can be invaluable in helping you evaluate your options.

For many, it can be useful to have some of your money invested in the three different types of tax-treated accounts: tax-deferred, such as a 401(k) or traditional IRA; ultimately tax-free, such as Roth IRAs; and taxable investment accounts, which take advantage of the flexibility of withdrawal and low capital gains rates. With a three-pronged approach you can plan your tax impact when you need to withdraw money. Instead of only having purely taxable withdrawals from a 401(k) plan, you might take only a portion of the withdrawal to be taxed in that fashion, and a portion to be taxed at capital gains from your non-deferred account. This provides you with the best of all worlds!

Posted on Feb 19th, 2020

by author: jblankenship.

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Posted in: 401k, capital gains, capital gains rate, investing, IRA, retirement savings, Roth IRA.

RMDs From IRAs

Feb 17th, 2020

by jblankenship.

4 comments

Photo credit: jb

I’ve made the observation before – IRAs are like belly-buttons: just about everyone has one these days, and quite often they have more than one.

Wait a second, maybe they’re not quite like belly-buttons after all.

Oh well, you get the point – just about everyone has at least one IRA in their various retirement savings plans, and these accounts will eventually be subjected to Required Minimum Distributions (RMDs) when the owner of the account reaches age 72. (This just changed with the passage of the SECURE Act in 2019 – it used to be 70½.)

So what are RMDs from IRAs, you might ask? When the IRA was first developed, it was determined that there must be a requirement for the account owner to withdraw the funds that have been hidden from taxes over the lifetime of the account. Otherwise the IRS would never benefit without the taxes that are levied against the account withdrawals. To facilitate the forced withdrawals, a schedule was prepared approximating the life span of the account owner year after year. This schedule prescribes a minimum amount to be withdrawn each year that the account owner is alive, until the account is exhausted.

A participant in a traditional IRA (Roth IRAs are not subject to RMD rules by the original owner) must begin receiving distributions from the IRA by April 1 of the year following the year that the participant reaches age 72. In other words, assuming that the participant reaches age 72 during the 2021 calendar year, 2021 is the first RMD year. Therefore, the first RMD must be withdrawn before April 1, 2022.

If you were born before July 1, 1949, you are subject to the old rule, which indicates that your first RMD year is the year that you reach age 70½.

After that first year’s RMD is withdrawn, the second year’s RMD must be taken by December 31 of the same year. For all subsequent years, the RMD must simply be withdrawn by December 31 in order to be credited for that year.

If you don’t want to double up the distributions for your first and second RMDs, you can take the first RMD by December 31 of the year you reach age 72. By taking your first and second RMDs as originally described (first one by April 1 and then another by December 31), you will be taxed on both distributions in a single year. This might result in adverse taxes to you.

Calculation of RMDs from IRAs

Calculation of the RMDs from IRAs is fairly straightforward, although there is some math involved. For the first year of RMD, the participant is age 72. IRS determines your applicable age based on your age at the end of the year. According to the Uniform Lifetime Table (See IRS Publication 590 for more detail on other tables), the distribution period for a 72-year-old is 25.6.

Jerry has IRAs worth $100,000 at the end of the previous year and will be 72 at the end of the current year. Jerry will divide the balance of $100,000 by 25.6 to produce the result of $3,906.25 – the RMD for his first year.

Each subsequent year, Jerry reviews the balance of his accounts on December 31 of the previous year. Jerry looks up the distribution period from the Uniform Lifetime Table for his attained age for the current year. He then takes the balance and divides by the factor for his current year, producing the RMD amount. Then Jerry just has to take a distribution of at least that amount (the RMD) during the calendar year.

Note, I made a point of indicating that you calculate your RMD based on the balance of all of your IRAs. This is because the IRS considers all of your traditional IRAs as one single account for the purpose of RMDs. You are required to take RMD withdrawals based on the overall total of all IRA accounts (only traditional IRAs, not Roth IRAs). This withdrawal can be from one IRA account, evenly from all IRA accounts, or in whatever combination you wish as long as you meet the minimum distribution for all IRA accounts that you own.

It’s different for RMDs from non-IRA retirement accounts. With the exception of 403(b) plans, employer plans cannot be aggregated to determine RMDs. But that’s a subject for another time.

Another point that is extremely important to note: taking these distributions is a requirement. Failing to take the appropriate distribution will result in a penalty of 50% (yes, half!) of the RMD that was not taken. As you can see, it really pays to know how to take the proper RMDs from IRAs.

Understand that the examples I’ve given are for simple situations, involving the original owner of the account and no other complications. In the case of an inherited IRA or other complicating factors, or if the account is an employer’s qualified plan rather than an IRA, many other factors come into play that will change the circumstances considerably. If you need help on one of these more complicated situations, it probably would pay off in the long run to have a professional help you with the calculations.

Posted on Feb 17th, 2020

by author: jblankenship.

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Posted in: IRA, required minimum distribution, rmd, rmds.
Tagged: IRA

2019 Social Security Survey Results

Feb 10th, 2020

by jblankenship.

4 comments

In November and December, 2019, I sent out a survey covering Social Security filing strategies. The survey was sent to a closed Facebook group (dealing primarily with Social Security filing strategies), as well as to my blog readership and Twitter followers.

If anyone would like to see the actual unscrubbed survey data, please send me a note at admin@financialducksinarow.com and I’ll set you up. I’ll be interested in hearing your insights after reviewing the data!
– jb

Given the sources of respondents, it’s safe to assume that this group of people is on the higher end of the scale of knowledge about Social Security rules and the like when compared to the general population. When you add in the ages of the respondents (median was the 60 to 65 range), I’d say this group is probably as educated as most folks can expect to be about Social Security. This is a strong factor, in my opinion, in the results that we saw.

After scrubbing the data, there was a total of 412 respondents, and 351 of those reported on both their own strategy and their spouse (or ex-spouse, or late spouse). The age of the group was as follows:

It’s not surprising that the lion’s share of the respondents are in the range of 60-70 (approximately 70% overall) given the audience and the topic of Social Security filing.

Of those surveyed, we asked who had already filed (along with whether their spouses had filed). Roughly 2/3 of the group has not filed, as shown below (this includes both the survey taker and his or her spouse):

Next question was about Social Security filing age. I combined the responses together for all filing strategy ages and statuses for the following information. By this I mean that the following three charts include all respondents, regardless of whether the individual had already filed or was still planning to file. This first chart includes all filing ages as well (we’ll break down the ages a bit in the next two charts after this one):

Splitting the chart above between those over age 60 and those under age 60, gives us a different perspective. First, the intended or actual filing of for those over age 60:

Next is the intended filing age for those surveyed that are under age 60:

The younger group isn’t looking to file at age 66 hardly at all compared to the older group – and of course they wouldn’t be, since the FRA is up to age 67 for those who are reaching 60 in 2020 or later (i.e., those age 59 or younger). What is surprising is that the younger group is twice as likely planning to file at 62 versus the older group. I wonder if this is a trend, or if the perspective of age will cause a change to strategy as these folks get closer to filing age(s)?

The next breakdown I did was between those who have already filed, and those that have not filed yet. First, we’ll look at the actual filing ages of those who have already filed:

And here are the expected filing ages for those who have not already filed:

Interesting results between these two groups. The group that has already filed did so at age 66 or FRA more than one-third of the time. Contrast that with roughly 28% of those who have not filed yet who are planning to file at age 66, 67, or FRA. On the other hand, 36% of the group that has not already filed is planning to file at age 70, compared to only 13.6% of the respondents who already filed and did so at age 70. This is nearly triple the rate.

Again I’m not sure whether this is a trend or if when the chips are down, the actual filing ages may be closer to FRA for a portion of that group who presently indicates a plan to file at age 70. Or perhaps the remaining group (those who have not yet filed) is just more inclined to delay in order to maximize benefits. That could be the reason they were involved in the communities that were targeted and surveyed. Also, keep in mind that the respondents over age 70 in the survey only amounted to approximately 9% overall.

We next polled the group regarding their reasons for filing. This gives us a bit of insight into some of the “why” of filing strategies.

Below are the results of filing strategy reason for respondent and spouse – and why they chose their particular strategy. These responses were partly defined but allowed for a free-form response. The free-form responses have been summarized by general reason. The first chart is for the filing strategy reason for who have already filed:

And then here are the reasons for choosing a particular strategy for those who have not yet filed:

Delaying to FRA or to age 70 combined are the most common reasons for choosing a particular filing strategy, for either filing status. For those who are yet to file, these two represent more than 60% of the responses, but only about 36% of those who already filed. As surmised above, I believe this might indicate that filing strategies change as folks get closer to actual filing age(s).

The next most common answer in both groups was to start benefits as soon as possible. This is what we often expect as the most common answer of all, given the general perception by the public that the Social Security system is in jeopardy and they want their benefits now rather than later. Still, among the group this response only garnered 15% (already filed) and 11% (not yet filed), so it’s not as common as I would have guessed.

The closing section of the survey dealt with satisfaction – the question was “Are you satisfied with your filing strategy?” Of the 412 survey takers, 365 (88.5%) were satisfied with their filing strategy. This left 47 (11.5%) who were not satisfied. The “Why not?” question was free-form, with no multiple choice responses pre-set, so the survey takers were free to give whatever reason they wanted. It was surprising that there weren’t more reasons (after my summarization) for dissatisfaction.

The top reasons for dissatisfaction are summarized below:

As you can see, the most common response was dissatisfaction due to the complexity of the system or the fact that the rules have changed. There were so many responses which combined these two factors that it was necessary to report as a combined figure. There was just no easy way to display these two factors separately and accurately. I’ll deal with breaking these two up in a future survey.

Naturally the rule changes have caused havoc with many folks’ plans, and this dissatisfaction is well justified. Furthermore, complexity of the system compounds the issue of the rule changes, apparently causing dissatisfaction among the choices for a given percentage of respondents.

It is somewhat surprising that the next most common response is that the individual had filed (or is planning to file) earlier but would prefer to file later. Unfortunately the survey was not designed to capture the reason behind that choice. I found this a bit surprising that folks are somehow either systematically or by their own circumstances being forced into an earlier filing age than they’d prefer. Again, this is a factor to account for in future surveys.

Posted on Feb 10th, 2020

by author: jblankenship.

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Posted in: FRA, Full Retirement Age, Social Security, social security benefits.

7 Mistakes With Inherited IRAs

Feb 3rd, 2020

by jblankenship.

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The inherited IRA, when implemented properly, can be a great vehicle for transferring wealth to your heirs, maintaining the tax-deferred status until much later. The problem is, there are some very specific terms which must be met in order to achieve the stretch – and if you screw it up, there’s definitely not a do over in most of these cases.

First, let’s review the specifics for an inherited IRA. When an IRA account owner dies, the beneficiary is eligible to re-title the account as an inherited IRA in the name of the deceased owner, and then must take distribution of the entire account over the coming 10 years. This is the default rule, but as covered earlier there are longer payout periods for certain eligible designated beneficiaries.

Keep in mind, these inherited IRA rules apply to both Traditional and Roth IRAs – even though the Roth IRA’s original owner is not subject to RMD, their beneficiaries are.

7 Mistakes With Inherited IRAs

Here are some of the common mistakes that can be made when attempting to stretch an IRA:

Not properly titling the account – if the account is set up in the name of the non-spouse beneficiary with no reference to the fact that it’s inherited, the funds would be immediately taxable and the IRA would be considered distributed. There’s no remedy to this one, the account has to be titled as “John Doe IRA (Deceased January 1, 2009) FBO Janie Brown” or something very similar, making it very clear that the account is inherited. If the account is set up in the name of a non-spouse beneficiary (and not referencing that it is inherited), the funds would be immediately taxable and the IRA would be distributed – all tax deferral is lost.
Doing a “rollover” – While it may seem like a simple question of semantics, there is a technical difference between a direct trustee-to-trustee transfer and a rollover. The trustee-to-trustee transfer is, as the name implies, a transfer directly between one trustee and another – the account owner never has possession of the funds. On the other hand, a rollover is when the beneficiary receives a payment made out in his own name, which he then deposits into an IRA. A rollover is disallowed in attempting to set up an inherited IRA – you must always do a direct trustee-to-trustee transfer.
Neglecting timely transfer – sometimes estates can be tied up for years getting every-thing sorted out. IRAs and 401(k) plans should not have this problem, as generally there is a specific beneficiary or beneficiaries designated on the account documentation. It is critical to transfer the funds into a properly titled account before the end of the year following the year of the deceased owner’s death – otherwise any stretch IRA option is lost (for those eligible designated beneficiaries), and the funds will have to be paid out via the factor which applies to the oldest primary beneficiary of the account (if there is more than one beneficiary).
Failing to take RMD for year of death – if the IRA owner dies after his Required Beginning Date, or RBD, a Required Minimum Distribution must be taken for the year of his death, and cannot be included in a transfer to an inherited IRA. This one can cause some hiccups, but in general can be resolved if caught in a timely fashion by taking the distribution in the name of the decedent and paying the applicable penalties for excess accumulation. If the amount including the RMD is transferred to an inherited IRA and isn’t caught quickly, it could negate the stretch altogether, causing big headaches.
Missing or neglecting RMD payments – if the eligible designated beneficiary (EDB) forgets to take the Required Minimum Distribution payments in a timely fashion, technically the five-year rule could kick in, requiring the entire balance to be paid out within five years, rather than the beneficiary’s lifetime. However, it is possible to recover from this mistake, according to the outcome of an IRS Private Letter Ruling (PLR 200811028, 3/14/2008). What happened in this case was the beneficiary neglected to take two years’ worth of RMD, and then corrected her mistake in the third year, taking all three years’ worth of RMD, followed by paying the penalty (50%) on the missed two years. The IRS ruled the failure to make these distributions in a timely fashion does not make the five-year rule apply. Since she maintained the appropriate distributions, caught up on the “misses” and paid the penalties, she is allowed to continue stretching the IRA over her lifetime.

If the beneficiary is a regular designated beneficiary (not an EDB), subject to the 10-year rule, neglects to take distribution by the end of the 10th year following the original owner’s death, the “excess accumulations” excise tax will be applied – 50%. That’s right, 50% of the amount that should have been distributed will be assessed as tax on this account if the distribution isn’t done in a timely fashion.
Not properly designating the beneficiary(s) on the account – IRS regulations state that the beneficiary must be identifiable in order to be eligible for the stretch IRA provision. This means naming an individual or individuals as specific beneficiaries on the account forms, or designating a proper see through trust (with specific beneficiaries named) as the beneficiary. The account form cannot have something ambiguous like “as stated in will” – since this does not name an identifiable beneficiary. In addition, if the original IRA beneficiary is a trust and any beneficiary of the trust is not a person, then the stretch IRA provision is lost for all beneficiaries.
Transferring the balance to a trust – if a qualified see-through trust is the beneficiary of the IRA, the balance of the funds in the IRA are NOT transferred to the trust. Rather, the IRA is transferred directly to a properly-titled inherited IRA, and then RMDs are taken from the inherited IRA and paid to the trust. According to the trust’s provisions, the payments are then made to the trust beneficiary(s). If the payments are simply passed through the trust to the trust beneficiary(s), then each beneficiary will be responsible for any tax on the distribution. If the funds are accumulated in the trust, they are taxable to the trust as ordinary income.

Obviously this isn’t an exhaustive list, but a sampling of the more common errors that folks make when attempting to set up an inherited IRA. Done properly, this arrangement can turn an IRA of a sizable amount in your lifetime into a significant legacy to your heirs. Proper setup is very important – get a professional to help you with it if you are confused by how this works!

Posted on Feb 3rd, 2020

by author: jblankenship.

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Posted in: IRA, stretch IRA.
Tagged: IRA · stretch IRA

Inherited IRAs After the SECURE Act

Jan 27th, 2020

by jblankenship.

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There are now two sets of rules regarding how distributions to designated beneficiaries must be taken for inherited IRAs and other retirement plans, when the account owner has died in 2020 or later. For deaths in 2019 or before, the old “stretch IRA” rules continue to apply.

This bifurcation of rules for inherited IRAs came about with the passage of the SECURE Act in late 2019. There is a set group of Eligible Designated Beneficiaries now, and then all other designated beneficiaries. Each type is treated differently for inherited IRAs.

Eligible Designated Beneficiaries

There are five types of individuals who make up the group of eligible designated beneficiaries. The five are:

Spouse beneficiaries
Minor child (of the original owner) beneficiaries
Disabled beneficiaries
Chronically Ill beneficiary
Beneficiary who is not more than 10 years younger than the original owner

Each of these beneficiary classes has the option of using the old-style of required distribution of inherited IRAs, utilizing the individual beneficiary’s own lifetime as the period over which to distribute the account.

This means that you’ll go to Table I (or Table III if it’s advantageous to do so), and locate your age for the first year of distributions (the year after the year of the original own-er’s death). The factor you find in the applicable table indicates the divisor (number of years) for your distribution. Take the previous year end’s final balance in the account, and divide by your factor.

For example, let’s say you’re a disabled beneficiary of an IRA that was owned by your brother, and he passed away the prior year (for the purpose of this illustration, the year of his death was 2020 or later). You are 40 years old, and the prior year end balance in the account was $150,000. Your Table I factor (see Appendix A) is 43.6. Divide $150,000 by 43.6 and your result is $3,440.37. You must take a distribution of at least $3,440.37 by the end of the year to meet your RMD requirement.

The following year, you will take the year end balance again, but now you subtract 1 from your prior year’s factor, so you have 42.6 as your new factor. The balance of the account at year end was $154,000. Dividing by 42.6 gives us $3,615.02. For each subsequent year, subtract 1 from the prior year’s factor and repeat the process.

All Other Designated Beneficiaries

When you inherit an IRA from someone other than your spouse (and you’re not otherwise an eligible designated beneficiary as described above) , you are eligible to take advantage of certain protections or deferrals of tax inherent in the IRA, but you are restricted in your actions with the account.

Restrictions

Specifically, as a non-spouse beneficiary you are not allowed to treat the IRA as your own – in other words, the account can only be re-titled as an inherited IRA, and you cannot make contributions to this account. You can move the account to another custodian (via trustee-to-trustee transfer only) or leave it at the same custodian and change the title to read as “John Doe IRA (Deceased January 21, 2020) FBO Janie Brown” or something very similar.

In addition to the restriction on titling, the beneficiaries of inherited IRAs must take complete distribution of the IRA proceeds within 10 years, beginning with the year following the year of the death of the original owner.

The Designated Beneficiary

The designated beneficiary is generally determined on September 30 of the year following the year of the death of the plan owner. In order to be named the designated beneficiary, an individual must be named on the plan documents as of the date of death (no changes can be made after death). If any person who is named the beneficiary in the plan documents is no longer a beneficiary as of September 30 of the year following the year of death, such person will not be considered as a possible designated beneficiary. This could come about if one of the original beneficiaries chose to disclaim entitlement to the account.

If an individual who is the primary beneficiary as of the owner’s date of death dies prior to September 30 of the year following the year of death, this individual is still considered to be the primary beneficiary, rather than any contingent beneficiaries. The deceased beneficiary’s estate (or per stirpes designation) would receive the account.

If the account is split (as described in Splitting Inherited IRAs), each beneficiary of the inherited account(s) will be considered the designated beneficiary of that split account. This applies if the account has been split before December 31 of the year following the year of death of the original owner.

Distribution Rules

The following distribution rules apply for inherited IRAs:

you’re allowed to spread the distribution out in monthly, quarterly, annually, or any schedule of payments as long as the account is fully distributed by the end of the tenth year following the year of the death of the original owner;
if you are the beneficiary of more than one IRA, you must determine distribution timeline for each inherited IRA individually;
there is no annual RMD for inherited IRAs (unless inherited by an eligible designated beneficiary), only the 10-year complete distribution rule.

Posted on Jan 27th, 2020

by author: jblankenship.

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Posted in: inherited IRA, IRA, SECURE Act.

Qualified 529 Expenses

Jan 24th, 2020

by sraskie.

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Money in a 529 plan may be used cover a wide range of expenses related to higher education. As we go through this section, we will also delineate between expenses allowed federally, but may not be allowed by some states.

Qualified expenses include tuition and fees related to attendance to the educational institution. It’s important to note what the IRS considers a qualified education institution. A qualified educational institution is generally a college, university, tech school, or other institution that participates in the Department of Education’s student aid program. This include public, private, non-profit and for-profit higher education institutions.

Room and board expenses also qualify, but there are certain conditions. The student must be enrolled at least half-time at the school. Expenses are also limited to the actual cost of the room and board if the student is living in housing operated by the institution, or if living off campus, expenses are limited to the allowance for room and board in the institution’s financial aid calculation for cost of attendance.

Additional expenses include lab fees, activity fees, course books, supplies and equipment that are necessary and paid to the education institution. Computers, laptops, software and programs used by the beneficiary while attending an eligible institution also qualify. However, these expenses are limited to those used in conjunction with attendance at the educational institution. Electronics such as TVs, games, etc. not specifically used for the purposes of attendance at the education institution are not considered qualified expenses.

The Tax Cut and Jobs Act now allows account owners to pay for the costs of public, private, or parochial K-12 education. The Act allows up to $10,000 per year, per beneficiary to be used to pay for these expenses. However, this is at the federal level. Some states such as Illinois currently consider these non-qualified expenses and would tax and penalize the distribution.

The SECURE Act added a few additional expenses that qualify as expenses that may be paid with 529 plan money. Tuition, fees, and related expenses for apprenticeship programs are now qualified expenses under 529 plans. Additionally, account owners may now use up to $10,000 to pay for student debt of the beneficiary, as well as up to $10,000 per sibling for each of the beneficiary’s siblings.

For example, let’s assume that a 529 owner has four children and a total account balance of $50,000. Sibling one has $15,000 in student debt, sibling two $5,000, sibling three $10,000, and sibling four $7,500 respectively. The account owner can put $10,000 to sibling one’s debt, $5,000 to sibling two, $10,000 to sibling three, and $7,500 to sibling four. Thus, the account owner can use $32,500 of plan money to pay the student debt.

Plan owners may either pay the qualified expenses out of pocket, then withdraw the exact funds from the 529 plan, or easier, pay the qualified expenses directly from the 529 plan.

Posted on Jan 24th, 2020

by author: sraskie.

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Posted in: 529, 529 plan, college savings, student loans.
Tagged: 529 · 529 expenses · 529 plan

16 Ways to Withdraw Money From Your 401k Without Penalty

Jan 20th, 2020

by jblankenship.

504 comments

*NOTE: if you’re looking for information about the CARES Act withdrawal, see the article 401k Distributions Due to Coronavirus (CRDs) for more details.

When hard times befall you, you may wonder if there is a way withdraw money from your 401k plan. In some cases you can get to the funds for a hardship withdrawal, but if you’re under age 59½ you will likely owe the 10% early withdrawal penalty. The term 401k is used throughout this article, but these options apply to all qualified plans, including 403b, 457, etc.. These rules are not for IRA withdrawals (although some are similar) – see the article at this link for 19 Ways to Withdraw IRA Funds Without Penalty.

Generally it’s difficult to withdraw money from your 401k, that’s part of the value of a 401k plan – a sort of forced discipline that requires you to leave your savings alone until retirement or face some significant penalties. Many 401k plans have options available to get your hands on the money (like a hardship withdrawal), but most have substantial qualifications that are tough to meet.

Your withdrawal of money from the 401k plan will result in taxation of the withdrawal, and if you do not meet one of the exceptions, a penalty as well. See the article Taxes and the 401k Withdrawal for more details about how the taxation works.

In addition to withdrawing money from a 401k plan, many plans offer the option to take a loan from your 401k. This can be a better alternative than the withdrawal. A loan is often the only way you can access the money in a 401k if you’re still employed by that company. The article at this link explains the differences between a 401k loan and a 401k withdrawal.

The list below is not all-inclusive, and each 401k plan administrator may have different restrictions or may not allow the option at all.

We’ll start with the obvious methods, all of which generally require the plan participant to leave employment:

1. Normal – Begin after age 59½ after leaving employment at any age

2. Age 55 Exception – Begin after age 55, having left employment after age 55 (also read about the potential Downside to the Age 55 Rule for 401k Plans)

3. Age 50 Exception – Begin after age 50, having left employment after age 50 from a job in a public safety profession, such as police, firefighters or emergency medical services for a governmental unit

4. Required Minimum Distributions – technically this one is covered by #1 above for most circumstances, but sometimes RMD is required of a person who has inherited a 401k, regardless of age.

5. Death – If you die, your beneficiaries are able to take distributions from your 401k without penalty.

6. Disability – If you are “totally and permanently disabled” by IRS definition, you may be able to take distributions from your 401k without penalty.

Now we’ll move into some of the not-so-obvious methods, starting with SOSEPP.

Series Of Substantially Equal Periodic Payments

This is the classic Section 72t (IRC Section 72(t)) method for early withdrawal exceptions to the penalty. Essentially you agree to continue taking the same amount from your plan for the greater of five years or until you reach age 59½. There are three methods of SOSEPP:

7. Required Minimum Distribution method – uses the IRS RMD table to determine your Equal Payments.

8. Fixed Amortization method – in this method, you calculate your Equal Payment based on one of three life expectancy tables published by the IRS.

9. Fixed Annuitization method – this method uses an annuitization factor published by the IRS to determine your Equal Payments.

Section 72(t) provides additional methods for premature distribution exceptions which can occur before leaving employment (if the plan allows):

10. High Unreimbursed Medical Expenses – for yourself, your spouse, or your qualified dependent. If you face these expenses, you may be allowed to withdraw a limited amount (the actual expenses minus 10% of your AGI) without penalty.

11. Corrective Distributions of Excess Contributions – under certain conditions, when excess contributions are made to an account these can be returned without penalty.

12. IRS Levy – when the IRS levies an account for unpaid taxes and/or penalties, this distribution is generally not subject to penalty.

And lastly, here are a few additional ways that you can withdraw your 401k funds without penalty:

13. Auto-Enrollment – within time limits, when you are automatically enrolled in a 401k plan and you do not wish to be enrolled, permissive distributions may be allowed without penalty.

14. Qualified Reservist – If you were called to duty after September 11, 2001 and serve for at least 6 months, you may be allowed to make a withdrawal from your 401k during your active duty period without penalty.

15. Divorce – If a Qualified Domestic Relations Order (QDRO) is drafted as part of a divorce decree with the order to assign or divide and assign a portion of the assets of your 401k plan with your former spouse, this withdrawal is penalty-free

16. Roth IRA or Roth 401k Conversion – when you convert your funds from a 401k plan to a Roth IRA or Roth 401k, although you pay tax on the distribution, there is no 10% penalty applied. Usually you must have left employment to enact a conversion to Roth IRA, but not a Roth 401k.

17. (a bonus!) Birth or Adoption – With the passage of the SECURE Act of 2019, a new qualified exception is now available – to offset expenses for the birth of a child or an adoption. Each taxpayer may withdraw up to $5,000 (within one year of the birth or when the adoption is finalized) to pay for expenses associated with a birth or adoption. You are not allowed to take the distribution prior to the birth of the child or the adoption is finalized, only after the fact. You also have the option of paying this back (rules for the payback are still being developed at this time).

*18. (2020 bonus!) CARES Act withdrawal – With the passage of the CARES Act in early 2020, there is a new option available for 401(k) withdrawal without penalty: If you are impacted by COVID-19 (and the list of impacts is pretty comprehensive), you can withdraw up to $100,000 from your 401(k) plan in 2020 without penalty. Plus you can waive the standard 20% withholding, and furthermore, you can spread out the tax burden over three years (2020, 2021 & 2022). On top of that, you have the option of repaying (rolling back) the withdrawal at any point during those same 3 years.

Posted on Jan 20th, 2020

by author: jblankenship.

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Posted in: 401 k, 401 k 403 b, 401k, 457, 72t, irs, qrp, qualified retirement plan.
Tagged: 401k · 403b · 72t · qrp

QCD after the SECURE Act

Jan 13th, 2020

by jblankenship.

13 comments

We’ve been reviewing the changes that the SECURE Act (Setting Every Community Up for Retirement Enhancement) has brought about. We’ve covered RMDs (just the regular kind), student loans, and contributions. Now we’ll talk about QCD – Qualified Charitable Distributions. We’ll also cover the new anti-abuse rule as well.

The original rules for QCD are that if you are over age 70½ years old (subject to RMDs under the pre-SECURE rules), you can make a direct distribution to a charitable organization from your IRA. (Only IRAs are allowed to make QCD distributions – h/t to reader Ritch!) By qualifying this direct distribution as a QCD, you do not have to include the amount of the distribution as income on your tax return. (For more on tax treatment and why this is a big deal, see this article about QCDs.)

After the SECURE Act passed, QCD now has a few differences.

First of all, even though SECURE changed the RMD age to 72, you are still allowed to make QCD distributions beginning when you reach 70½. That’s a slight departure from the old rule, which indicated that you had to be subject to RMD before you could make a QCD. Now you can make a QCD at any age after 70½, even though you may not be subject to RMD until age 72.

The other difference is more important, however: Since SECURE also made a change to the contribution rules, by allowing contributions to be made at any age (previously not allowed after 70½), there’s an anomaly that the rules address. This new rule is called the QCD anti-abuse rule, and it does exactly what you’d think, given the name.

If there wasn’t an anti-abuse rule in place, you could make a contribution to your IRA (if you have earnings) and then immediately withdraw it as a QCD. This would result in you taking a double-dip of tax preferences for that particular money.

For example, let’s say you’re single, 71 years old, and you have total income (before any dealings with your IRA) of $50,000. You make a regular, deductible contribution of $7,000 to your IRA, bringing your adjusted gross income down to $43,000. You then also direct the IRA custodian to distribute $7,000 to your favorite charity as a QCD. Since QCD distributions aren’t included as income, your adjusted gross income remains at $43,000.

But since you made a deductible contribution and a QCD, you’re getting twice the tax benefit from this activity. Enter the QCD anti-abuse rule.

With the QCD anti-abuse rule, when you make a QCD distribution, you must include in income any post-age-70½ deducted contributions to your IRA. Once the amount of your post-age-70½ deducted contributions is met with attempted QCDs, you will be eligible to have any excess amount treated as QCD, not included in taxable income.

Back to our example, let’s say at 71 you’re making the deductible contribution to your IRA, and you made a similar deductible contribution to your IRA in the previous year, when you had reached 70½. So you’ve made total deductible contributions to the IRA in the amount of $14,000.

Now you decide to make a QCD to your favorite charity, in the amount of $20,000. You are only allowed to bypass your tax return with $6,000 of the QCD distribution, since you had $14,000 of deducted IRA contributions after age 70½. So your income for that year, although you originally reduced it by $7,000 for the deductible IRA contribution, is now increased by $14,000 due to the disallowed portion of your QCD. The remaining $6,000 is still allowed as a QCD.

You can still itemize that $14,000 contribution to charity. Since (for 2020) the standard deduction for someone in your position (single and over age 65) is $13,700, you will get the full benefit of that itemized deduction, along with your other itemized deductions.

In order for this to work properly, if you’ve made deductible contributions after age 70½, you still need to attempt to make the QCD as if you had not made deductible contributions after age 70½. That is, ask your custodian to send the funds directly to the qualified charity, just the same for any QCD. Otherwise, if you bypass the QCD process and take a distribution in your own name, followed by a contribution to the charity, you won’t be able to eliminate that amount from your previously-deducted amounts.

From our prior example, if you had made $14,000 of deductible contributions to your IRA after age 70½ and later wanted to make a $5,000 contribution from your charity, you might think it’s fruitless to follow the QCD process since that amount is going to be considered a regular distribution (and therefore taxable) anyway. But if you don’t follow the QCD rules and attempt to make this $5,000 distribution a QCD, then you’ll still have a $14,000 balance in your deductions that will continue to work against your future potential QCDs. However, if you pass this $5,000 distribution through the QCD process, you’ll reduce your future deductible contribution figure for the anti-abuse rules to $9,000. Eventually, if you continue the QCD process in future years you’ll eliminate the deductible contributions balance and be able to make a successful QCD.

Just keep in mind that the post-age-70½ deducted contributions to IRAs will follow you for the rest of your life, or at least until you’ve made enough attempted QCD distributions to use up your deducted contributions from earlier. Say you waited until you were 80 years old to make a QCD – you’ll need to go back and add up all of your deducted IRA contributions from 70½ onward to this year, and subtract those deducted contributions before the QCD will be allowed the special tax treatment.

It may work out better in the long run if you were to make those IRA contributions as non-deductible, depending on your circumstances. You’ll want to run the numbers and maybe talk to your tax professional to decide which direction makes most sense for you.

Posted on Jan 13th, 2020

by author: jblankenship.

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Posted in: deductible IRA, IRA, QCD, SECURE Act.

IRA Contributions after the SECURE Act

Jan 6th, 2020

by jblankenship.

2 comments

Following our articles last week – SECURE Act RMD Rules and The SECURE Act and Student Loans – today we’ll cover IRA contributions after the SECURE Act. A big change in store here for folks who are still working later in life, but not really earth-shattering.

With the passage of the SECURE Act, the prohibition for IRA contributions after age 70½ is lifted. Previously, once you hit that magical age, you were no longer allowed to make contributions to an IRA.

Employer plans, such as the 401(k) have always allowed contributions to continue as long as the employee was still employed at that company. If the employee is also a 5% or greater owner, however, the 401(k) contributions past age 70½ are disallowed (and have been for a long time). This did not change with SECURE.

Now that SECURE has passed, as long as you have earned income, you can make contributions to an IRA (or Roth IRA), no matter what your age is.

Like I said, nothing really earth-shattering about this, although it does give some taxpayers more time to make contributions to IRAs if they’re still working.

I imagine one of the bigger questions in the minds of folks nearing (or over) age 70½ is the subject of my next article – Qualified Charitable Contributions after SECURE (QCDs). Stay tuned!

Posted on Jan 6th, 2020

by author: jblankenship.

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Posted in: deductible IRA, IRA, ira contribution limits, SECURE Act.

The SECURE Act and Student Loans

Jan 3rd, 2020

by sraskie.

1 comment

The recent passing of the SECURE Act brought about some changes that have impacted savers and retirees alike. Required minimum distributions (RMDs) from retirement account have now been raised to age 72. Also, gone is the ability to “stretch” required distributions from retirement accounts to non-spouse beneficiaries (with few exceptions).

One potentially beneficial change comes from the broadening of the expenses 529 college savings plans can cover. 529 plans are tax-advantaged savings plans that allow parent, grandparents, and other relatives to save money for education. Contributions grow tax-deferred and withdrawals for qualified expenses are tax-free. In the past, qualified expenses included, tuition, books, fees, etc.

With the passing of the SECURE Act, another provision has been added that allows account owners to pay for student loan principal and interest. This new rule allows up to $10,000 maximum to be used to pay for outstanding student loans. In addition, the SECURE Act also allows an additional $10,000 to pay for the student loans of any sibling of the plan beneficiary. In other words, each sibling of the beneficiary is allowed up to $10,000 to pay down student debt – from the same 529 plan.

This new rule can help parents with left over money in the 529 plan pay down the debt of beneficiaries and their siblings. It should be noted, however, that any student loan interest paid from the 529 plan is no longer eligible for the student loan interested deduction at tax time (sorry – no double dipping).

The impact of this new rule may see more money flow into 529 plans as it removes some of the uncertainty of what to do with leftover funds once a beneficiary graduates. One word of caution: grandparents who own 529 plans may want to wait to distribute funds for the beneficiary until after the student graduates (assuming the graduate has outstanding loans).

The reason being is that a distribution for a non-parent owned 529 plan negatively impacts any financial aid the beneficiary may be eligible to receive. A distribution while the beneficiary is in college counts against the student’s financial aid as income to the student – likely reducing their eligibility for a higher financial aid award. After graduation, however, this dilemma no longer exists.

The Tax Cut and Jobs Act passed a few years ago allows 529 owners to pay for expenses related to elementary and secondary education. This new rule is only at the federal level. As of this writing, some states (such as IL) do not consider elementary and secondary school expenses as qualified expenses. In other words, federally, the expenses are qualified, but in some states they are not. This means that some states (IL) will tax and penalize this type of distribution.

The explanation above is mentioned because as of this writing, it has yet to be determined whether states (such as IL) will treat the payment of student debt from a 529 plan as a qualified expense. It’s allowed federally, but remains to be confirmed among state plans.

Posted on Jan 3rd, 2020

by author: sraskie.

1 comment already - add to the conversation!

Posted in: 529, 529 plan, college savings, fafsa, student loans.
Tagged: SECURE Act · student loan interest

SECURE Act RMD Rules

Dec 30th, 2019

by jblankenship.

8 comments

Now that the SECURE Act (Setting Every Community Up for Retirement Enhancement) has been signed into law, there are several things that you need to know. The first that we’ll tackle are the SECURE Act RMD rules (Required Minimum Distribution) for original owners of IRAs. The change that went into effect (beginning with calendar year 2020) is that the age to begin RMDs has been pushed back to 72, where before it was 70½.

This part of the SECURE Act is beneficial for folks who don’t need the money from their IRAs and other retirement plans, giving them more time before this required withdrawal must begin. It’s not a huge change, but it’s still beneficial for some.

What this means is that you now have an extra 18 months (actually more for about half of you, less for the other half) before you have to start taking RMDs from your IRAs, 401(k)s and other retirement plans.

The change is more helpful to folks who have a birthday in the first half of the year, because in the past (under the 70½ rule), your first year of RMD occurred in the year that you reached age 70. With the new rules, your first year of RMD is always the year you reach 72, giving you two full years to delay that first RMD. If you were born in the second half of the year, under the old rules your first year of RMD occurred in the year that you reached age 71, so you only effectively get a one-year delay with the new rules.

The old rule about the first year’s distribution having a delayed deadline (by April 1 of the year following the year you reach the required age) still applies. So, if your 72nd birthday occurs on July 15, 2022, your first RMD deadline is April 1, 2023. You’d still have to take another RMD for 2023 before December 31, 2023 as well.

Current RMD folks

If you’ve been taking RMDs prior to the end of 2019 – that is, if you reached age 70½ during the 2019 calendar year – you must continue your RMDs as if nothing changed. The new rule applies for folks born any time on or after July 1, 1949 – who would reach 70½ on January 1, 2020. Starting with that date, July 1, 1949 and for any birthdate after that, you fit into the new age 72 rule, and your first RMD will be for the year 2022, with the first year’s deadline being April 1, 2023.

Life expectancy tables to use

Although there is an effort under way to make changes to the current IRS life expectancy tables, these have not been published yet. So you would continue to use the applicable life expectancy table as in the past. Table I (Single Life Table) is primarily for inherited IRAs, Table II (Joint and Last Survivor Table) is for taxpayers who are married to someone more than 10 years younger, and Table III (Uniform Life Table) is for everyone else. Most folks will use Table III to determine their RMDs for their common, non-inherited IRAs and other retirement plans. You can find these tables in IRS Publication 590B, Appendix B.

Posted on Dec 30th, 2019

by author: jblankenship.

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Posted in: 401 k, 401k, IRA, required minimum distribution, retirement accounts, rmd, SECURE Act.

The Outrageous Effect of Taxation of Social Security Benefits

Dec 23rd, 2019

by jblankenship.

3 comments

(jb note: Astute reader JH pointed out an error in the calculation below, which I’ve corrected. The end result of the taxation increase is the same, but there was a problem in the calculated taxable income in the previous version.)

As you may be well aware, Social Security retirement benefits can be taxable to you, depending upon how much other income you have. What you may not be aware of is how this can seriously increase your tax rate for small amounts of additional income.

Provisional Income

So – in order to calculate how much of your Social Security benefit is taxable, it is necessary to determine the amount of your “provisional income” – which is your Modified Adjusted Gross Income (MAGI) plus 1/2 of your Social Security benefit plus any tax-exempt income you’ve received. If you are married and filing jointly (MFJ) and this amount is greater than $32,000, at least part of your Social Security benefit is taxable. The lower limit for all other filing statuses – single, head of household, qualifying widow(er) and married filing separately while living apart from your spouse – is $25,000. If your filing status is married filing separately and you continue to live with your spouse, the lower limit is zero.

The amounts mentioned above are just the first limit – if your provisional income is above those levels, up to 50% of your Social Security benefit is taxable – that is, added to your gross income. If the provisional income is above $44,000 and your filing status is MFJ, then up to 85% of your Social Security benefit becomes taxable. For all other statuses, provisional income above $34,000 triggers up to 85% taxability on your Social Security Benefit. It’s actually not always fully 85%; rather, it’s 85% of the amount that you’re over the limit or 85% of your Social Security benefit, whichever is less. (see the example below)

The Effect

Where this really hurts folks is when provisional income is just barely above the upper limit. See the example below – this is a married couple who earn a total of $40,000 in income (MAGI), plus a total of $16,000 in Social Security benefits:

Modified Adjusted Gross Income	$40,000
Plus 1/2 of Social Security Benefit	$8,000
Provisional Income	$48,000
Less base amount	$44,000
Excess above base	$4,000
85% of excess	$3,400
Plus 50% of the excess above the first base ($6,000)	$9,400
85% of Social Security Benefit	$13,600
To include in gross income (lesser of previous two above)	$9,400
New Gross Income	$49,400

So now watch what happens if these folks earn $1,000 more:

Modified Adjusted Gross Income	$41,000
Plus 1/2 of Social Security Benefit	$8,000
Provisional Income	$49,000
Less base amount	$44,000
Excess above base	$5,000
85% of excess	$4,250
Plus 50% of the excess above the first base ($6,000)	$10,250
85% of Social Security Benefit	$13,600
To include in gross income (lesser of previous two above)	$10,250
New Gross Income	$51,250

Normally, when someone of this income level (12% tax bracket) increases their income by $1,000, their tax would only increase by $120 – as you might expect. But with this provision to tax Social Security benefits based upon the provisional income that you bring in, when they add $1,000 to their annual income, their gross income is effectively increased by $1,850. As a result, this $1,000 increase in income has caused an increase in tax of $222 – for a rate of 22.2% on that $1,000 increase!

As you can see, for folks that are right in the edge of these taxation limits, this can be an outrageous impact on financial livelihood. If you happen to be in this position, it might be helpful to plan income (if you can) so that in one year you might not be impacted as much by this taxation, and then take the tax hit the following year. This can only be accomplished if you are somewhat in control of when you earn income or recognize gains.

As your MAGI increases, this effect becomes less and less, but it still is worth paying attention to – if you can plan around it, you might save yourself some extra tax!

Posted on Dec 23rd, 2019

by author: jblankenship.

3 comments already - add to the conversation!

Posted in: Social Security, tax.
Tagged: Social Security · tax

Holiday Gifting Ideas for Kids

Dec 20th, 2019

by sraskie.

1 comment

With the Holidays coming up and the giving spirit in full motion, I wanted to share something I heard on a radio show regarding giving that stuck with me.

It’s common for people to have a budget for the Holidays and the best laid plans to stick to it. Often, those plans get blown to bits as emotions come into play and wanting to give as much as they can to their kids. I’ve been guilty of it myself.

Here’s what the show recommended: give a total of four gifts per child.

A gift they want – this could be something your child has been asking about quite often such as a toy, pet, etc.
A gift they need – this could be music, dance, karate lessons. Or something practical and useful for school, college, etc.
A gift they can wear – not a ton of explanation here.
A gift they can read – a good book can go a long way. Additionally, a magazine subscription based on their interests, or age may also be beneficial.

You may also consider a combination of gifts from the above. You could combine the something to wear with something they want – such as a designer piece of clothing, etc.

Though not fool proof, this may help as a guide to not overspend this Holiday Season.

Posted on Dec 20th, 2019

by author: sraskie.

1 comment already - add to the conversation!

Posted in: spending.
Tagged: gift ideas

11 Ways You Can Fund Your Roth IRA

Dec 16th, 2019

by jblankenship.

2 comments

grapes of roth by filtran With due regards to Natalie Choate for initially putting together this list, below are the currently-legal methods for funding a Roth IRA account:

Contributions from compensation income. These are your regular annual contributions to the Roth IRA account. You are allowed (in 2019 and 2020) to contribute up to the lesser of your actual earned income compensation or $6,000 – provided your Modified Adjusted Gross Income (MAGI) is below the limits. The limit for 2019 is $193,000 if you are married filing jointly, or $122,000 if filing single or head of household. For 2020 the MAGI limits are a bit higher, $196,000 for MFJ and $124,000 for single and head of household filers.
Catch up contributions. If you are over age 50 during the tax year, you are eligible to make an additional contribution of $1,000 (for 2019 and 2020) above and beyond the “regular” contributions (#1 above). This figure would be reduced if your compensation income for the year is less than the total of the regular contribution plus the catch up contribution for the year.
Conversion from a traditional IRA. This is a special sort of taxable rollover from your traditional IRA account to a Roth IRA account. Ordinary income taxes are owed on the amount converted – but no penalty will be applied to all monies converted successfully from the traditional IRA to the Roth IRA.
Conversion from a Qualified Retirement Plan such as a 401(k). Much the same as #3 above, you may be eligible to convert funds from your QRP to a Roth IRA account. See this article for more details on how to accomplish this type of conversion.
Rollover from another Roth IRA. Ok, this one is a cheapy, but it represents another option. Rollovers from other Roth IRAs is always an acceptable option for funding a Roth IRA.
Rollover from a Roth 401(k). If you have a Roth 401(k) through your employer, within plan-specific limits you may be eligible to rollover the funds from the Roth 401(k) to your Roth IRA. Your own contributions to the account plus the growth can be rolled over tax-free to the Roth IRA account. There are no income limits on such conversions; however there can be limits on when you would have access to the rolled-over funds, depending upon your age at the time of the rollover, the age of the accounts, and other factors. See this article about Roth 401(k) distributions for more details.
Rollover from an inherited Qualified Retirement Plan (QRP). As detailed here, if you’ve inherited a Qualified Retirement Plan (such as a 401(k) plan) you may be eligible to convert those funds to a Roth IRA.
Failed rollovers or conversions. If you have attempted to make a rollover or a conversion into your Roth IRA and for some reason it is disallowed – such as you inadvertently had a higher MAGI than anticipated – the amount contributed to the account will be considered a regular contribution, subject to the following tax consequences:
- a 6% excise tax per year for any excess contribution that is not removed from the account
- the distributions from the traditional IRA or QRP (if a conversion) must be included in your gross income
- the distributions will be subject to the additional 10% penalty for an early distribution not covered by an exception, successful conversion, or rollover
Certain military death benefits. As a result of the HEART Act, certain payments of Servicemember’s Group Life Insurance (SGLI) benefits can be rolled over into a with no tax or penalty. This article provides more details.
Qualified reservist distributions. A member of any of the US military reserves that has received compensation during active duty is eligible to place those funds in a Roth IRA at any time during the two years following active duty, without regard to normal contribution limits.
Exxon Valdez settlements. Certain individuals who received settlement compensation in connection with the Exxon Valdez oil spill can contribute up to $100,000 of the settlement into a Roth IRA without regard to normal contribution limits. Individuals include both the original plaintiffs and the heirs of the original plaintiffs. To be eligible for this contribution, the settlement would be claimed as income in the year received, and the contribution must be made during the same tax year as it is claimed as income.
Certain payments to employees of bankrupt airlines. Within 180 days of receipt of payments made in connection with bankruptcy of an airline, these payments or a portion of the payments, can be contributed to a Roth IRA without regard to regular limitations.

Note: #11 has some fairly narrow requirements; you can find more about these in IRS Publication 590. #12 has been eliminated and is no longer a valid option for funding a Roth IRA.

If you know of any other ways to contribute to a Roth IRA that I have not covered here, please leave a comment!

Posted on Dec 16th, 2019

by author: jblankenship.

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Posted in: Early Distribution, IRA, magi, qrp, qualified retirement plan, roth 401 k, roth conversion, Roth conversion, roth ira account, tax.
Tagged: IRA · tax

IRS warns of gift card scam

Dec 2nd, 2019

by jblankenship.

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Recently there has been a new scam going around, with a twist – the caller, impersonating an IRS agent, requests payment in the form of gift cards. The IRS recently released a Tax Tip (2019-167) regarding this scam and what you should do about it. The complete Tip is listed below.

Taxpayers should watch out for gift card scam

Taxpayers should always be on the lookout for scams. Thieves want to trick people in order to steal their personal information, scam them out of money, or talk them into engaging in questionable behavior with their taxes. Scam attempts can peak during tax season, but taxpayers need to remain vigilant all year.

Gift card scams are on the rise. In fact, there are many reports of taxpayers being asked to pay a fake tax bill through the purchase of gift cards.

Here’s how one scenario usually happens:

Someone posing as an IRS agent calls the taxpayer and informs them their identity has been stolen.
The fake agent says the taxpayer’s identify was used to open fake bank accounts.
The caller tells the taxpayer to buy gift cards from various stores and await further instructions.
The scammer then contacts the taxpayer again telling them to provide the gift cards’ access numbers.

Here’s how people can know if it is really the IRS calling. The IRS does not:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
Demand that taxpayers pay taxes without the opportunity to question or appeal the amount they owe. All taxpayers should be aware of their rights.
Threaten to bring in local police, immigration officers or other law-enforcement to have the taxpayer arrested for not paying.
Revoke the taxpayer’s driver’s license, business licenses, or immigration status.

People who believe they’ve been targeted by a scammer should:

Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their IRS Impersonation Scam Reporting web page. They can also call 800-366-4484.
Report phone scams to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. They should add “IRS Telephone Scam” in the notes.
Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov. The sender can add “IRS Phone Scam” to the subject line.

More information:
IRS Impersonation Scam Reporting
Consumer Alerts
Report Phishing
Phone Scams

Posted on Dec 2nd, 2019

by author: jblankenship.

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Posted in: internal revenue service, irs, scams, tax scams.

Information on Umbrellas

Nov 22nd, 2019

by sraskie.

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Most of us know that umbrella policies cover us in the case of exceeding the liability limits in our auto or home insurance policies. While this is true, there are other reasons to hold umbrella insurance.

Umbrella insurance provides excess liability above and beyond the coverage amounts on underlying policies. That is, if we are liable for damages in excess of what our policies provide, the umbrella provides the excess.

In addition to auto and home policies, umbrella insurance also provides coverage on motorcycles, boats, ATVs, as well as a second home, land, etc. Naturally the more items that are insured under the umbrella, the more the premium increases.

What about coverage for things not covered by an underlying policy?

Less thought about but still covered under umbrella policies are occurrences such as libel, slander, certain lawsuits, and personal liability. This could include dog bites or defending yourself from personal injury (self-defense). Umbrella insurance will also provide for your legal defense in a lawsuit – assuming it’s covered under the policy.

An umbrella policy does not negate the necessity for high liability limits on your underlying policies. For example, an individual may think that they can reduce the liability on their auto or home insurance because they have $1 million in umbrella coverage. This would be a mistake.

What would happen in this situation is the policyholder would be responsible for the difference between the coverage they should have had, and what they currently carry. For example, let’s assume that an umbrella policy requires $300,000 of liability on the home insurance policy and the policyholder reduces the limit to $100,000 to save a few bucks.

The policyholder then has a loss where they are liable for $500,000 worth of personal injury. They are required to have liability of $300,000 on the home before the umbrella kicks in, yet they only have $100,000.

The insurance company will require the policyholder to personally cover the difference between what they have and what they should have – in this case the difference between $300,000 (required) and $100,000 (current coverage) – $200,000. This is a significant amount; and not worth the few dollars saved by reducing the liability on the original policy.

Should you have questions about specific events or coverages/exclusions, it never hurts to ask your insurance provider. Certain activities or events may require supplemental insurance coverage or a standalone policy.

Posted on Nov 22nd, 2019

by author: sraskie.

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Posted in: umbrella insurance.

Survivor Benefits Do Not Affect Your Own Benefits (and vice versa)

Nov 18th, 2019

by jblankenship.

4 comments

I’ve had a few questions about this topic over the years, so I thought I’d run through a few examples and explain it.

When you eligible for a Social Security Survivor Benefit and a Social Security retirement benefit based on your earnings, you can maximize your lifetime benefits by coordinating the two and planning out your strategy for taking each benefit.

As we’ve covered in other articles, it often is best to delay receiving your own benefit as long as possible. This is because you will receive Delayed Retirement Credits (DRCs) for every month after you’ve reached your Full Retirement Age (FRA, which is age 66 if you were born between 1943 and 1954, and increasing gradually up to age 67 if you were born in 1955 or later). This DRC amounts to 8% per year, or 2/3% per month.

In addition, it can be beneficial to delay receiving a Survivor benefit past the earliest age it is available (age 60, or age 50 if permanently disabled) as this benefit can be reduced to as little as 71.5% of it’s potential amount if started early.

Plus – this is the really important point to note – neither benefit has an impact on the other. I’ll illustrate this below in a couple of examples.

Survivor Benefit is Less Than Own Benefit

John, age 60, just lost his wife Priscilla at her age 66. Priscilla had just started receiving her Social Security benefit in the amount of $1,000 per month. John has a PIA of $2,000 per month available to him – meaning he will receive $2,000 at his FRA, age 66. He could otherwise file early to begin receiving his own benefit at age 62, in the amount of $1,500 due to the early start reduction.

Since John is 60 years old, he is eligible to receive a Survivor Benefit based upon Priscilla’s record. John could receive $715 per month in Survivor benefits beginning right now, and continue to receive this amount until he decides to draw benefits based on his own record. So this means John could receive this amount for 6 years, and then file for his own benefit at the $2,000 per month level. Using the delay option, he could wait while receiving the Survivor Benefit for up to 10 years, and then file for his own benefit at age 70, for the DRC-enhanced amount of $2,640 (32% increase for 4 years of delay).

It’s important to note that John isn’t required to begin receiving the Survivor Benefit at age 60, he could delay to age 62 (for example) and then the benefit would be approximately $810 per month. If he waits until he is age 66, the Survivor Benefit would be $1,000.

Survivor Benefit is Greater Than Own Benefit

Lucy, age 58, just lost her husband David, who was 65. David had not begun to receive his Social Security benefits as of his date of death. Had he lived to age 66 (his FRA) he would have been eligible for a Social Security benefit of $1,800 per month. Lucy is due to receive a Social Security benefit of $1,500 per month at her age 66.

When Lucy reaches age 60 she has a choice: if she files for the Survivor Benefit, it will be reduced to $1,287 per month (71.5% of David’s full benefit of $1,800). She could receive this amount until she decides to file for her own benefit ($1,500) at a later date. On the other hand, if she waits until she is age 62, she could receive her own benefit in the amount of approximately $1,113, due to the reduction factors. She could receive that amount until she reaches age 66, at which point she could begin receiving the Survivor Benefit at the maximum rate, or $1,800.

Going back to the first hand, Lucy could file for the Survivor Benefit right away at age 60, receiving $1,287 per month, and then wait to age 70 to file for her own benefit. This would give her the maximum benefit based on her own record, of $1,960, greater than the maximized benefit from David’s record. If she has the resources, she could wait until age 66 and file for the Survivor Benefit at the $1,800 rate and then at age 70 file for her own benefit at $1,960.

Because taking one type of benefit or the other has no impact on the other benefit, she can choose which strategy works best for her own situation. She cannot, however, file for one benefit, switch to the other, and then switch back. The switching between benefits can only be done once.

Hope this helps to clear up some of the confusion around these benefits.

Posted on Nov 18th, 2019

by author: jblankenship.

4 comments already - add to the conversation!

Posted in: Social Security, social security benefits, social security retirement, social security survivor benefits, survivor benefits.
Tagged: retirement benefits · Social Security · survivor benefits

529 Plan Beneficiaries

Nov 15th, 2019

by sraskie.

2 comments

Owners (usually parents) of 529 plans set them up for the purpose of funding future college education expenses for beneficiaries (usually their children). However, 529 plans allow for beneficiaries other than the owner’s children. Beneficiaries may be changed on 529 plans at the owner’s discretion.

Who qualifies as a beneficiary for a 529 plan? According to IRS Publication 970, the following may be beneficiaries of 529 plans:

The account owner.
Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
Brother, sister, stepbrother, or stepsister.
Father or mother or ancestor of either.
Stepfather or stepmother.
Son or daughter of a brother or sister.
Brother or sister of father or mother.
Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
The spouse of any individual listed above.
First cousin.

529 plans only allow one beneficiary per plan. Owners with multiple children or beneficiaries will need to determine their plan of action when it comes to funding in this situation.

While it would be easy to make a blanket recommendation on what to do, it depends on the goals of the owner, the age difference between beneficiaries, and the aspirations of the beneficiaries. For example, a 529 owner could have two children – let’s say their twins. Since 529 plans can only have one beneficiary, it may make sense in this situation to fund two plans, one for each beneficiary. When the funds are needed, each beneficiary has their own account for expenses.

Another example would be an owner with two children that are four years apart in age. In this situation the owner could consider funding one plan, with one beneficiary – say the oldest child. The owner could fund the plan based on funding college for two children, yet only have one beneficiary. When the oldest child starts college, money from the plan would fund his or her expenses. Then, when the oldest child graduates, the owner can make the youngest child beneficiary and continue to use the plan money to fund his or her education.

In some situations, college may not be for everyone. An owner could have college aspirations for the beneficiary, but the beneficiary may have other aspirations after high school. While the owner may be disappointed, all is not lost. One thing the owner can do is change the beneficiary to any of the options listed above and continue to use the money to fund higher education expenses.

Posted on Nov 15th, 2019

by author: sraskie.

2 comments already - add to the conversation!

Posted in: 529, 529 plan, beneficiary.
Tagged: 529 · 529 beneficiaries · 529 beneficiary · 529 plan · 529 plans

Are Social Security Benefits Changing in 2021?

Nov 12th, 2019

by jblankenship.

No comments yet

Chances are you’ve seen an advertisement or some sort of article talking about how Social Security benefits will be changing in 2021. Usually these articles have a very dramatic headline, such as “After 2021, you’ll never be able to get as much benefits from Social Security! Act Now!” – followed by information to attend a seminar or contact a firm to help you out.

I understand a lot of folks are concerned about this, but I believe it’s misguided concern brought about by sensationalists who have something to sell. The truth is that the much ballyhoo’d changes in 2021 have been in place since 1983, and nothing you can do will avoid the application of these rules.

The Rule Change

In 1983, Congress made changes to the way Social Security works, in order to increase the probability of the system maintaining solvency. This was brought about by the crisis situation that was occurring in 1982, which was the last time Social Security’s trust fund was in danger of running short of money (as has been projected to occur 2035, per the 2019 Social Security Trust Fund Report).

At that time, the Full Retirement Age (FRA) for Social Security beneficiaries was 65. This had been the FRA since the inception of the system, and had been in place for approximately 50 years at that point. In order to help the system out, FRA was gradually increased over time.

It started with folks who were born in 1938 – who were 45 years old in 1983. FRA increased by 2 months for these folks, and increased by another two months for the following birth years up to the birth years of 1943 thru 1954. The FRA for these folks was set at 66 years. Beginning with birth year 1955, FRA is increased again by 2 months. For each subsequent birth year after that, FRA is increased by another 2 months, until it reaches 67 for folks born in 1960 or later.

In 2021, the first people born in 1955 will be reaching their FRA – which for the first time in 11 years has increased. These people reach FRA at age 66 years and 2 months. But this isn’t new! These rules have been in place since 1983.

No rules are changing in 2021. There are different factors being applied for folks who reach FRA in 2021 and thereafter, but the rules have been in place since 1983.

The Rules

Here’s how the rules apply – for everyone: For all birth years after 1943, the Delayed Retirement Credit is 2/3% per month, which works out to 8% per full year of delay. The reduction calculation for starting benefits before your FRA is also the same for all – 20% (5/9% per month) for the three full years (36 months) closest to your FRA, and 5% per year (5/12% per month) for any months more than 36 before your FRA.

First, a quick definition: PIA – Primary Insurance Amount – This is the unreduced (and not increased) benefit that you will receive if you file at your Full Retirement Age.

Let’s look at each year of birth in order. Here are the factors used to calculate your benefits:

Birth year 1943-1954
– FRA is age 66
– minimum benefit is 75% of your PIA (48 months of reduction)
– maximum benefit is 132% of your PIA (48 months of delay increase)

Birth year 1955
– FRA is age 66 years, 2 months
– minimum benefit is 74.17% of PIA (50 months of reduction)
– maximum benefit is 130.67% of PIA (46 months of delay increase)

Birth year 1956
– FRA is age 66 & 4 months
– minimum benefit is 73.33% of PIA (52 months of reduction)
– maximum benefit is 129.33% of PIA (44 months of delay increase)

Birth year 1957
– FRA is age 66 & 6 months
– minimum benefit is 72.5% of PIA (54 months of reduction)
– maximum benefit is 128% of PIA (42 months of delay increase)

Birth year 1958
– FRA is age 66 & 8 months
– minimum benefit is 71.67% of PIA (56 months of reduction)
– maximum benefit is 126.67% of PIA (40 months of delay increase)

Birth year 1959
– FRA is age 66 & 10 months
– minimum benefit is 70.83% of PIA (58 months of reduction)
– maximum benefit is 125.33% of PIA (38 months of delay increase)

Birth year 1960 and thereafter
– FRA is age 67
– minimum benefit is 70% of PIA (60 months of reduction)
– maximum benefit is 124% of PIA (36 months of delay increase)

Practical Application of the Rules for YOUR Situation

Perhaps it might help to visualize a timeline of the 96 months between age 62 and age 70. For folks born between 1943 and 1954, the FRA point is at age 66. At that point, there are 48 months to the left of FRA (maximum number of months before FRA that you can file, therefore 48 months worth of reductions can be applied). On the right of FRA, there are 48 months before age 70, so that there are a maximum of 48 months’ worth of increases by delaying. See below:

However, for someone born in 1955, the FRA point is at 66 years and two months. This leaves 50 months to the left, and 46 months to the right. So the decreases are greater at the minimum filing age, and the increases are less at the maximum filing age. See below:

Since increases and decreases are based on how many months before or after FRA that you file, when there are more months to the left the maximum decrease will be greater. Likewise when there are fewer months to the right the increases will (at maximum) be less.

To calculate the minimum benefit for 1955 birth year, as indicated above there are 50 months of possible reductions. The closest 36 months determine a 20% decrease, and the remaining 14 months (at 5/12% per month) determine an additional 5.83% decrease, multiplying 14 by 5/12%. Adding these two together we come up with 25.83%, so the minimum benefit is 74.17% for birth year 1955.

Calculating the maximum benefit amount for 1955 birth year is more straightforward – every month of delay produces a 2/3% increase. Multiplying 2/3% by the 46 possible months of increase results in a total maximum increase of 30.67% for birth year 1955.

Nothing is Changing in 2021

If you’re reaching FRA in 2021, these factors have applied to every calculation done to project your benefits. NOTHING CHANGES AS OF 2021, it’s already in place (since 1983), determined by your year of birth. So again I say, the year 2021 should have no impact on your filing decisions.

In fact, if you’re reaching FRA in 2021, these factors began applying to your situation in 2017, when you reached age 62. If you calculated the minimum benefit for starting at age 62, you’d have found that the benefit amount was 74.17% of your PIA – not 75%, which was the case for folks born the year before. The same applies to anyone born in or after 1955 – the minimums have been in place all along (since 1983).

Hope this clears up any misconceptions that may have arisen from the drama that is being promoted as if it were a crisis.

Posted on Nov 12th, 2019

by author: jblankenship.

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Posted in: Delayed Retirement Credit, DRC, Full Retirement Age, Social Security, social security administration, social security benefits.

Financial Recordkeeping – How Long Do I Keep This??

Nov 6th, 2019

by jblankenship.

5 comments

Photo credit: jb

I often get the question – how long should I keep my _________ (fill in the blank)? So I thought I’d put together a list of the most common types of documents with some guidelines as to how long you should keep those documents. I’ll try to keep this as simple as possible – but obviously, if you have other documents that I have not covered here, please contact me and I can give you a recommendation for your particular situation.

Keep in mind that these are only guidelines. If you have a special situation, such as a lawsuit (even if it’s been settled) or a sticky inheritance or insurance claim situation, you should probably keep that sort of documentation forever plus 1 day. You just never know when it will be necessary to dredge up that information again to prove how it was handled, when it was handled, or who was involved, as well as the circumstances.

With litigation and insurance claims especially, it is helpful to put all of the pertinent documentation into a larger folder, envelope, or other self-contained filing apparatus, along with a brief description (in your own words) of the circumstances and the outcome. This information would go in your permanent file. Unless the documentation takes up too much space, you can get a fairly inexpensive fire-proof safe to hold this kind of information, along with the permanent documents that I’ll list below.

In addition, given that identity theft is so pervasive any more, it probably makes good sense to put your most sensitive information behind lock and key, or better yet, scanned onto an encrypted hard drive. Otherwise, if everything is in a simple file cabinet in your home, a thief can help themselves to all of your information quickly and easily, and make your life hell in the process.

The Financial Stuff Organizer (FSO)

If you’d like a head start on gathering and organizing all of this information, I have a set of templates (written in Microsoft Word for easy editing) that you can customize to create your own Financial Stuff Organizer (FSO). A colleague of mine created these templates several years ago, and I think you’ll find the FSO pretty useful as you organize your financial documentation.

Permanent

Your permanent file should either be stored in a fire-proof safe in your home or place of business, or in a safe deposit box at your bank. In your permanent file, you’ll want to keep the following documents:

Social Security card(s)
certified copy of your birth certificate(s)
passport(s)
life insurance policies in force
homeowner’s insurance policies in force
auto insurance policies in force
liability insurance policies in force
annuity policies
wills and trusts, including living wills
community property agreements
prenuptial agreements
military discharge papers
marriage certificates
death certificates
divorce decrees and related paperwork
power of attorney documentation (healthcare and otherwise)
citizenship paperwork
copies of property deeds and descriptions, along with mortgage closing documentation, title insurance, and records of major improvements to the property
any litigation-related or complex insurance claim-related information as mentioned above
retirement plan documentation, including beneficiary designation forms (a copy of the form submitted to the custodian)
personal health record – including dates of any procedures or major illnesses and treatments
any bond, stock or other investment documents that are original certificates – such as Series EE or I savings bonds
any partnership agreements, buy-sell arrangements or other continuation documents
automobile titles
union cards
deeds to cemetery plots, along with any pre-arrangement information
adoption papers
diplomas
licenses that you don’t need to carry
documentation on any property inherited – including fair market value assessment, and any other information used to establish the basis for the inherited property

In addition to these specific documents, it is a good idea to scan copies of the front and back of your credit cards, driver’s licenses, and any other hard-to-replace documents that you carry in your wallet or purse. This way, if your purse is stolen, you have ready access to the emergency phone numbers to report the stolen information and to request replacements. The permanent file, if located in your home, is also a good place to keep the key to your safe deposit box.

If scanning documents to your computer, it might make good sense to make a copy of the files (encrypted) and put your copy in a safe deposit box as well.

Long-Term (7 to 10 years)

Your long-term file will ideally be a filing cabinet in your home or office and your computer. When you first start scanning your important documents into the computer it will take a while, but if you set aside a few hours or do it in small batches, you’ll soon have everything you need scanned. Then you can scan new documents into your computer when you receive them in the future. Your computer records should be backed up at least quarterly, as well as any time you add new information to the file. Back up the computer files onto an inexpensive flash drive and keep the flash drive in your permanent file, safe deposit box, or perhaps at a relative’s house. In general this long-term file will include the following documentation:

tax returns – if you use a tax preparer (like me, for example) your returns and copies of all supporting documentation will be kept for at least three years by law, and the really good preparers (like me, for example) will keep all of your documentation permanently
documentation used to create the tax returns, including:
- W2’s
- 1099’s
- canceled checks and bank statements
- credit card statements (if used for deductible items, such as charitable contributions or medical expenses)
- year-end brokerage statements
- rental property documentation
- self-employed business documentation
- major home improvement documentation
health insurance records – claims, policy information, premiums paid and reimbursements
home insurance records – policy information, payments, and claims
home repair bills and contracts for major repair/remodel projects
warranty documents and manuals for all home appliances (keep until you no longer use the appliance)
realty and personal property tax assessments
rental agreements
receipts for high-dollar items (keep these until you dispose of the item)

Short-Term (1 to 3 years)

Your short term file can also be a filing cabinet – and in general these documents won’t need to have a computer scanned copy, although if you’re a belt-and-suspenders type, go ahead and scan these as well. This sort of documentation can be readily re-created if necessary, and has a much shorter useful life. Keep the following information in your short-term file:

loan payment records (non-mortgage)
pay stubs – keep the last one from each year, for a reference to compare with your W2 if necessary.
year-end bank and brokerage statements. These are usually available from the company, but this way you’ll have the document on hand when you need it.
budgets and actual results – many folks don’t track their expenses very closely, but if you do, it’s a good idea to save previous years’ final results to compare and see how you’ve done with regard to the budget over the years.

Close At Hand (Reference file)

It’s also a good idea to have a ready binder that has some critical information documented for your family members in the event of your incapacitation. The FSO (mentioned earlier) is a good start for this information. Depending upon the nature of the information that you keep in your Reference File, you might want to store this folder with your permanent files. Keep the following information in the close at hand Reference file:

health-care providers, including phone numbers and specific health matters dealt with
financial professionals – accountant, insurance professionals, attorneys, financial planners, bankers, tax preparers, stock brokers, etc.
emergency instructions for death or disability, including who to contact to deal with various situations
all family names, addresses, Social Security numbers, birth dates, and driver’s license numbers
contents of your safe deposit box and/or permanent file – including where the file is located, how to access it, etc..
a brief “What’s Where?” document which explains how to locate various documents that may be required in the event of your incapacity
description of and passwords to your various computer files relating to important documentation
any loan documents – including personal “word of mouth” loans made to or by you by or to others
current and past resume’s

What You Don’t Need to Keep

We often keep lots of extra “stuff” around that we just don’t need to keep. Hopefully this list will help you to eliminate some of the excess junk and open up space for some of the really important stuff. I would get a paper shredder that you can use to destroy these documents, as you don’t want even the smallest amount of personal information floating around in these days of rampant identity theft. You can eliminate the following documents from your personal “paper farm”, keeping only three months’ worth:

utility bills (unless you need them for tax documentation)
credit card bills
bank statements
pay stubs
bank deposit slips and ATM slips
receipts for small items (check against your credit card or bank statement, then pitch)

There you have it. Don’t let the length of this article cause you to throw up your hands in despair at the size of the task – it doesn’t have to be daunting. You probably have much of this information pretty well organized already. Just go at it in batches and get everything in it’s place. And start with a copy of the FSO I mentioned earlier to help you with the process (linked earlier).

Posted on Nov 6th, 2019

by author: jblankenship.

5 comments already - add to the conversation!

Posted in: financial planning, tax.
Tagged: financial planning · tax

Before moving beyond – are you really maxing our your 401(k) and IRA?

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