By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport If you’re an IRA beneficiary subject to the 10-year payout period and would have had a 2024 required minimum distribution (RMD), you’re in luck. In IRS Notice 2024-35, issued yesterday (April 16), the IRS said it would excuse those RMDs. The SECURE Act provided that most non-spouse beneficiaries of IRA owners (or plan participants) who died in 2020 or later could no longer stretch RMDs over their lifetime. Instead, these “non-eligible designated beneficiaries” became subject to a 10-year payment rule. In its proposed ..read more

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport You have carefully saved for retirement and now you have accumulated a substantial amount of funds in your IRA.  At some point the funds that you have been putting away for years must come out. When you reach age 73 you must take a required minimum distribution (RMD) for that year and for every year thereafter. You may be concerned about the tax hit that the RMD will bring. Besides the RMD itself being taxed, there is a ripple effect when an RMD is taken. An RMD is included in income for the year i ..read more

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport Imagine walking through a grocery store, intent on purchasing a specific item. As you turn down an aisle, little colorful tags proclaiming “Special Deal” and “Buy 1, Get 1” protrude from each shelf. In anticipation of your item being offered at a discounted price, you get a little bounce in your step. Sure enough, as you reach the section that displays the one product you came here to buy, the tag says, “On Sale.” Jackpot! And if this is a non-perishable item that can be safely stored at home or frozen, there is a g ..read more

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport If you exceeded the 2023 limit for 401(k) deferrals, time is of the essence to correct the error. If you don’t act quickly, the tax consequences can be serious. The maximum amount of pre-tax and Roth contributions you could make for 2023 was $22,500 (plus $7,500 more if you were least age 50). In applying that limit, contributions you make to ALL plans are combined. (There’s an exception if you participate in both a 401(k) plan and 457(b) plan.) Most plans have internal controls to prevent you from exceeding the deferral limit ..read more

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Question: I have a general question regarding the 10-year time frame for emptying an inherited IRA. Your guidance says that the deadline is the END of the tenth year following death. In this specific situation, the death occurred July 9, 2020, so I believe the deadline is December 31, 2030, the end of the tenth year. I have seen some articles indicating that it is exactly 10 years later (July 9, 2030 in this case), rather than the end of the tenth year. Would you please clarify this question for me? Tha ..read more

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport Markets continue to climb. That is good news for your retirement account. However, there is a downside. When you contribute to a traditional IRA or a pre-tax 401(k), you make a deal with Uncle Sam. You can get a tax deduction and tax deferral on any earnings in your account. However, eventually the government is going to want its share and will require funds to come out of these accounts. That is when you must start required minimum distributions (RMDs). You may not need the money, and you may not want t ..read more

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on X: @theslottreport ‘Tis the season for identifying and correcting excess IRA contributions. It seems as if every other recent inquiry is about this subject. To keep readers on the straight and narrow, here are ten details about excess IRA contributions and the correction process… 1. Excess contributions occur for many reasons, including exceeding the annual IRA contribution limit, making a contribution without eligible compensation, exceeding the Roth IRA phase-out limits, rolling over ineligible dollars (like a required minimum dist ..read more

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Question: Hi, My last remaining parent, my mother, passed away in May 2017, and my younger brother and I inherited her IRA (equally split into inherited IRA accounts). We were of the understanding we could handle required minimum distributions (RMDs) via the “stretch IRA” method (RMDs spread out over our expected lifetime). The new laws that went into place in 2020 and 2022 have us wondering if we must change what we are doing. Can you please help us with this question? Regards, Eric Answer: Hi Eric, The changes made by the SEC ..read more

By Ian Berger, JD IRA Analyst Follow Us on X: @theslottreport Previous Slott Report articles have covered the new SECURE 2.0 provision allowing 529 funds to be rolled over to Roth IRAs. We’ve reported that there are several unanswered questions concerning this new rollover opportunity. And we’ve discussed the ability to do two rollovers in 2024 – one for 2023 if completed by April 15 and a second by December 31. Under SECURE 2.0, a Roth IRA contribution of 529 funds must comply with certain requirements. For example, the maximum lifetime amount that can be rolled over is $35,000; the 529 ..read more

By Sarah Brenner, JD Director of Retirement Education Follow Us on X: @theslottreport You might be thinking about contributing to a Roth IRA. One big hurdle to making these contributions is the fact that there are income limits that make high income individuals ineligible. For 2024, the phase out range for eligibility for Roth IRA contribution is between $230,000 – $240,000 for those who are married filing jointly and between $146,000 – $161,000 for single filers. If you are a high earner, you may be able to get around the pesky income limits by using the backdoor Roth IRA conversion str ..read more