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More Clarification on Rollovers and Transfers

I’m compelled to provide an additional update to the posts I’ve provided in the past in the article Running Afoul of One Rollover Per Year Rule and its follow-up More on the One-Rollover-Per-Year Rule. This is primarily to provide clarity to a portion of this rule that I personally was unclear on when the articles were originally written. The rule is that you are restricted to one IRA rollover in a 12-month period. So let’s define a few things for the purpose of this discussion: Rollover – this is when you move money from one IRA to another, first taking possession of the funds prior to depositing the funds into the new (or the same old) IRA account. You have 60 days to complete this process. At the end of the tax year you’ll receive a 1099R from the original custodian, with a distribution code of 1 or 7 (this […]

Required Minimum Distributions for IRAs and 401(k)s

There are differences in how Required Minimum Distributions are handled between an IRA and a 401(k). Here’s your primer.

NUA and the Roth Conversion

Can you use a Roth conversion for NUA-treated stock? Unfortunately no, and this article explains why it’s not an option.

Let It All Go – IRS gives you 11 years… (now 12½ years!)

There’s a time in your life when there are no restrictions on IRA withdrawals, how much or how little you can take.

Your Retirement Plan and Where You Live

Where you live can have a big impact on the taxation of your retirement income. Some states don’t tax retirement income at all!

Roth Conversion While Receiving 72t Payments

Can you do a Roth conversion while you are taking 72t payments from the traditional IRA? Yes, with some complications.

Should You Separate Your Rollovers From Your Contributory IRAs?

There may be a good reason to keep some of your IRA money separate from the rest. It’s all about where the money came from in the first place.

More reasons to keep on rolling (to an IRA, that is)

There are reasons in favor of rollover of 401(k) & reasons against. Here are a few reasons in favor of rollover that you might not think of.

Tax Diversification for Investments

Reviewing the benefits of tax diversification among your retirement and other investment accounts. Timing along with your lifetime taxation.

IRA Investment Planning for Taxation

The question often comes up – what types of investments are best for my IRA? Of course, any investment that you make in a tax-deferred fashion is a good one, at least in theory. But there are some investments that make the most sense for your IRA versus other vehicles… and some investments that make more sense in other kinds of investment accounts, where possible. Listed below are a couple of considerations to take into account when considering taxation of your IRA and non-IRA investments. Bonds and other interest-bearing vehicles Given the nature of the IRA – deferring taxation on current income and growth, investments that would otherwise be taxed at ordinary income tax rates would be best for your IRA. This includes the likes of interest-bearing investments, such as CDs or bonds. Since, presumably, your tax rate when you begin taking distributions will be either the same or less […]

A Cash Flow Dilemma – Should I take distributions from my IRA or from my taxable account?

If you have an IRA and a taxable account and can afford to take funds from either but don’t need all of both, how should you prioritize?

When a 60-day Rollover is Not a 60-day Rollover

Review of a PLR that provides relief for a taxpayer who did not complete a rollover within the required 60 days.

Staging Your Roth IRA Conversion

You can benefit in the long run by staging your Roth IRA conversions. This can reduce taxes and potentially eliminate RMDs.

IRA Cross Loans – Don’t Even Think About It

Don’t attempt to go around the prohibited transaction rules by using cross loans with your IRA. It won’t turn out well.

IRA Charitable Distributions – If You’re Less Than Age 70½

Can you make IRA charitable distributions before age 70½? What are the tax consequences for doing this? How does it all work?

Prohibited Transactions and Disqualified Persons

There’s a fine line when transacting business with individuals using your IRA. You need to make sure they’re not prohibited transactions.