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Roth Conversions and Qualified Charitable Distributions: Today's Slott Report Mailbag - Ed Slott and Company, LLC
QUESTION:I am 67 years old and have a Roth IRA that is over 5 years old. I would like to perform some annual 401(k)-to-Roth IRA conversions before I become subject to required minimum distributions (RMDs) on my 401(k) when I turn age 73. I am aware that I will need to pay income taxes on the conversions themselves, but there is a lot of conflicting information out there on what happens with the earnings on the converted funds after they move to the Roth IRA.
The “Still-Working Exception” and December 31 Retirement - Ed Slott and Company, LLC
As the end of the year approaches, you may have plans to retire on December 31.However, if you are using the “still-working exception” to defer required minimum distributions (RMDs) from your 401(k) (or other company plan), you may want to delay your retirement into 2026.
2025 Year-End Retirement Account Deadlines - Ed Slott and Company, LLC
The end of the year always brings a flurry of retirement account deadlines and planning opportunities. This year is no different. And, new for 2025, the One Big Beautiful Bill Act (OBBBA) brings new considerations, especially for Roth conversion planning.
Do QCDs Actually Reduce AGI? - Ed Slott and Company, LLC
It has come to our attention that confusion exists as to how qualified charitable distributions (QCDs) impact one’s taxes. It is said that QCDs can reduce adjusted gross income (AGI). But is this true? Yes, it is true…but there is more to the story. Simply “doing a QCD” is not a magic AGI-reduction bullet.
Avoiding the 10% Early Distribution Penalty for Certain Hardship Withdrawals - Ed Slott and Company, LLC
Most 401(k) plans (as well as 403(b) and 457(b) plans) offer hardship withdrawals while you are still employed. If the withdrawal comes from a pre-tax account, it will be taxable. And, if you’re under age 59½, it will also be subject to the 10% early distribution penalty – unless one of the exceptions to that penalty applies. For example, hardship withdrawals are allowed for medical expenses.
Tapping an ESA for Back-to-School Expenses - Ed Slott and Company, LLC
It’s August and that means it is back-to-school time! The 2025-2026 school year is upon us. Kids are already back in the classroom and ready to learn.Any parent will tell you that back-to-school time is an expensive time of the year. You cannot afford to miss out on any possible option that may help you save to cover education costs. There are often discussions about tax credits and 529 plans savings plans, but one tool that that you might overlook is the Coverdell Education Savings Account (ESA). Here is what you need to know.
In ERISA Retirement Plans, Spouse Beneficiaries Rule - Ed Slott and Company, LLC
At Ed Slott and Company, we continually stress how important the beneficiary designation form is. Because it’s that form – and not the retirement account owner’s will or other estate planning documents – that usually dictates who will receive the owner’s IRA or 401(k) account after death.
The Craziest Stuff I’ve Heard - Ed Slott and Company, LLC
The Ed Slott team has answered literally tens of thousands of IRA and retirement plan questions over the past few years. That is not hyperbole—we track it all. The questions we’re asked run the gamut from basic to extremely complex. Most inquiries are honest and straightforward: “What is the rule about this?” “How do I do that?” and so on. On occasion, however, we get some zingers. Just off the top of my head, here are some of the craziest questions and scenarios I’ve encountered.
OBBBA Impact on HSAs - Ed Slott and Company, LLC
From a tax perspective, a Health Savings Account (HSA) can offer the best of all worlds. Like traditional IRA contributions, HSA contributions are made by the individual with pre-tax dollars. Contributions made by an employer are excluded from income, like with a 401(k) plan. And, distributions are tax- and penalty-free, similar to Roth IRA earnings, if they are used for qualified medical expenses. HSA contributions are only available for those covered by a High Deductible Health Plan (HDHP).
The Once-Per-Year Rollover Rule and SEP IRA Contributions: Today's Slott Report Mailbag - Ed Slott and Company, LLC
Question:I recently retired in January and rolled over a lump sum pension from my previous employer into my IRA. Next month, I'm planning to roll over my 401(k) from the same employer into the same IRA as well. Would these two actions run afoul of the once-per-year rollover rule? Thanks.
Required Minimum Distributions and IRA Beneficiaries: Today's Slott Report Mailbag - Ed Slott and Company, LLC
QUESTION:I turn age 73 on December 1, 2026. I would like to do a Roth IRA conversion on January 1, 2026, prior to turning 73 years old. Does my first required minimum distribution (RMD) begin January 1, 2026, the year that I turn age 73? Am I correct that my RMD must be satisfied before a conversion?
5 Random Retirement Account Trivia Questions - Ed Slott and Company, LLC
Are the current tax brackets, made “permanent” by OBBBA, really here forever?Not necessarily. The One Big Beautiful Bill Act (OBBBA) did extend the tax rates established by the 2017 Tax Cuts and Jobs Act “permanently.” But that word has a different meaning when it comes to tax law. Yes,
Six Unanswered Questions on Trump Accounts - Ed Slott and Company, LLC
A recent Slott Report article discussed “Trump accounts,” the new savings vehicle for children created by the One Big Beautiful Bill Act (OBBBA). As with most new laws, there are a number of unanswered questions about Trump accounts that need to be addressed by the IRS. Fortunately, since Trump account contributions can’t be made before July 4, 2026, the IRS should have enough time to issue guidance. Here are the some of the outstanding questions:
QCDs and 529-to-Roth IRA Rollovers: Today’s Slott Report Mailbag - Ed Slott and Company, LLC
Question:I am 70 years old and do not have to start taking required minimum distributions (RMDs) for three years. Can I do a qualified charitable distribution (QCD) from my IRA now? Or, do I have to wait until age 73 when I have to start taking RMDs?
Mr. T: “I Pity the Fool Who Misses Their RMD” - Ed Slott and Company, LLC
Laurence Tureaud, born May 21, 1952, is better known as Mr. T. He is an actor and a retired professional wrestler. He is famous for his roles as B. A. Baracus in the 1980s television series “The A-Team” and as boxer Clubber Lang in the 1982 film Rocky III.
Reporting a Recharacterization - Ed Slott and Company, LLC
While the ability to recharacterize Roth conversions was eliminated years ago, Roth contributions can still be reversed. A Roth IRA contribution can be recharacterized to a traditional IRA, or vice versa. To recharacterize an IRA contribution, the IRA custodian will transfer the funds, along with the earnings or loss attributable (“net income attributable” or NIA), from the first IRA to the second IRA. The IRA custodian may be willing to calculate the NIA, or that responsibility could fall on the IRA owner.
Year-of-Death RMD and RMD on Backdoor Roth: Today’s Slott Report Mailbag - Ed Slott and Company, LLC
Question:I have a client who died last month. She would have been age 83 this year. She had an IRA. Her husband, age 87, was the beneficiary of the IRA. She did not take her required minimum distribution (RMD) for 2025 before she died. He intends to do a spousal rollover by transferring the funds to his own IRA. Does he need to take the RMD prior to moving the funds?
Last Week in Chicago - Ed Slott and Company, LLC
Last week in Chicago, the Ed Slott and Company team hosted another successful 2-day advisor training program. A sellout crowd of over 260 financial professionals from across the country joined us for some intense IRA and retirement plan education. Topics included all things Roth, net unrealized appreciation (NUA), naming trusts as IRA beneficiaries, the new qualified charitable distribution (QCD) 1099-R reporting codes,
Roth IRA vs. Roth 401(k): Which Is Better? - Ed Slott and Company, LLC
Many of you are familiar with the tax advantages that Roth retirement accounts can bring. Although Roth contributions are made with after-tax dollars, the contributions grow tax-free, and earnings also come out tax-free after age 59½ if a five-year holding period has been satisfied.
10 Things You Should Know about Fixing Late Rollovers with Self Certification - Ed Slott and Company, LLC
When retirement account funds are on the move, things do not always go as planned. The best way to move these funds is to do so directly, but that may not always be possible. It is very common for money to be moved between retirement accounts by using 60-day rollovers. Unfortunately, the 60-day rollover deadline is often missed.
Pro Rata, Not “Double Tax” - Ed Slott and Company, LLC
The pro-rata rule dictates that when an IRA contains both non-deductible (after-tax) and deductible (pre-tax) funds, then each dollar withdrawn (or converted) from the IRA will contain a percentage of tax-free and taxable funds based on the ratio of after-tax funds vs. the entire balance in all your IRAs. When there is a mix of pre- and after-tax dollars, you cannot withdraw (or convert) just the non-deductible funds and pay no tax.
The Roth 5-Year Clock and the Pro-Rata Rule: Today’s Slott Report Mailbag - Ed Slott and Company, LLC
I am over age 59½ and have had a Roth IRA account for more than 5 years. Starting in 2025, I designated all of my contributions into my employer’s 401(k) plan as Roth contributions. If I decide to retire before I have met the 5-year requirement for the Roth 401(k) and roll over this balance to my existing Roth IRA account, which 5-year clock applies to those former Roth 401(k) dollars?
OBBBA: No IRA Changes, but More Roth Conversions? - Ed Slott and Company, LLC
Hopefully Ed Slott and Company is your trusted, go-to source for all things IRA and retirement plan related. Let’s be clear about the “One Big Beautiful Bill Act of 2025” (OBBBA), enacted on July 4. There is no “SECURE 3.0” in this legislation. It does NOT contain any changes DIRECTLY related to IRA or retirement plan rules.
How Company Plan Loans Work - Ed Slott and Company, LLC
Most company retirement savings plans, such as 401(k), 403(b) and 457(b) plans, are allowed to (but not required to) offer plan loans. According to a survey by the Employee Benefits Research Institute, as of the end of 2022, 52% of 401(k) plans allowed loans, while 84% of 401(k) participants were in plans offering them. Loans are not allowed from IRAs, SEP IRA plans or SIMPLE IRA plans.
Moving Your Roth Account - Ed Slott and Company, LLC
The year 2025 has been a turbulent time for the economy. Whether due to job loss or persons seeking better investment opportunities in volatile markets, retirement account funds are on the move more than ever. Fortunately, portability between different types of retirement accounts has expanded, creating more options for those relocating their money.
60-Day Rollovers and the Age 55 Exception: Today’s Slott Report Mailbag - Ed Slott and Company, LLC
Question: Can an IRA beneficiary do a 60-day rollover?Answer: Only a spouse beneficiary can do a 60-day rollover from an inherited IRA if the funds are moving into an IRA in her own name. If a nonspouse beneficiary takes a distribution from an inherited IRA
Double Your Pleasure – The 457(b) 2x Catch-Up - Ed Slott and Company, LLC
If you’re in a 457(b) plan and are nearing retirement, you may want to consider an often-overlooked rule that could allow you to defer twice the usual annual elective deferral limit (for 2025, $23,000 x 2 = $47,000) in the three years before retirement.
3 Retirement Account Takeaways from OBBBA - Ed Slott and Company, LLC
On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill Act” (OBBBA). This mammoth domestic policy and tax law is hundreds of pages long and will impact many people in all kinds of ways. What does it mean for your retirement account? Here are 3 takeaways:
OBBBA: No IRA Changes, but More Roth Conversions? - Ed Slott and Company, LLC
Hopefully Ed Slott and Company is your trusted, go-to source for all things IRA and retirement plan related. Let’s be clear about the “One Big Beautiful Bill Act of 2025” (OBBBA), enacted on July 4. There is no “SECURE 3.0” in this legislation. It does NOT contain any changes DIRECTLY related to IRA or retirement plan rules.
How Company Plan Loans Work - Ed Slott and Company, LLC
Most company retirement savings plans, such as 401(k), 403(b) and 457(b) plans, are allowed to (but not required to) offer plan loans. According to a survey by the Employee Benefits Research Institute, as of the end of 2022, 52% of 401(k) plans allowed loans, while 84% of 401(k) participants were in plans offering them. Loans are not allowed from IRAs, SEP IRA plans or SIMPLE IRA plans.
60-Day Rollovers and the Age 55 Exception: Today’s Slott Report Mailbag - Ed Slott and Company, LLC
Question: Can an IRA beneficiary do a 60-day rollover?Answer: Only a spouse beneficiary can do a 60-day rollover from an inherited IRA if the funds are moving into an IRA in her own name. If a nonspouse beneficiary takes a distribution from an inherited IRA
10 Things You Should Know about Fixing Late Rollovers with Self Certification - Ed Slott and Company, LLC
When retirement account funds are on the move, things do not always go as planned. The best way to move these funds is to do so directly, but that may not always be possible. It is very common for money to be moved between retirement accounts by using 60-day rollovers. Unfortunately, the 60-day rollover deadline is often missed.