Is an IRA a qualified plan?

July 7, 2024 No Comments

A: A qualified plan refers to whether or not an investment plan offered by an employer qualifies for tax breaks under internal revenue service (IRS) guidelines. An individual retirement account (IRA) is not offered (with the exception of SEP and SIMPLE IRAs) by an employer

Is my IRA or Roth IRA FDIC-Insured?

July 7, 2024 No Comments

A: The Federal Deposit Insurance Corporation, or FDIC, is a government-run agency that provides protection against losses if a bank or savings and loan association fails. Created in 1933, the FDIC’s original mission was to offer peace of mind to banking customers after the financial

Is my non-qualified Roth IRA distribution subject to taxes or early distribution penalties?

July 7, 2024 No Comments

A: The ordering rules must be applied to determine whether the distribution is subject to income taxes and/or the early distribution penalty. Under these ordering rules, distributions are taken from funding sources in the following order: Regular contributions Roth conversions Earnings Note: Roth conversion amounts

Is the cost-of-living adjustment (COLA) mandatory?

July 7, 2024 No Comments

A: A cost-of-living adjustment, or COLA, is a purchasing power protection mechanism provided to all monthly Social Security and Supplemental Security Income benefits. While a cost-of-living raise for Social Security recipients is technically “mandatory,” it does not mean there will be an actual increase every

Is there a minimum I have to contribute to my 401(k) plan?

July 7, 2024 No Comments

A: No, there is no minimum you have to contribute to your traditional 401(k) plan, but to maximize your retirement account potential, there are suggested amounts that should be contributed. There is also a maximum that you are allowed to contribute to your retirement account.

My company is the trustee of our 401k plan (which has 112 participants). What are the pros and cons of having the company instead of the plan provider/vendor as the trustee?

July 7, 2024 No Comments

A: The answer may vary depending on the plan provider and the provisions of the plan document. For questions relating to a specific issue, the employer should consult with an ERISA attorney, who will be able to make an appropriate recommendation. An ERISA attorney may

My daughter would like to use some of her Roth IRA to pay for some current tuition fees and loans. Can she do this without a penalty?

July 7, 2024 No Comments

A: This is a surprisingly complicated question, as it touches on the differences between traditional and Roth IRAs, as well as what counts as a “qualified education expense.” Because Roth IRA contributions are made with after-tax earnings, a person can withdraw his or her direct

If an IRA owner dies after starting required minimum distributions (RMD) but the spouse is under 70.5, can the spouse roll over the IRA into his/her own IRA, and stop RMDs until age 70.5?

July 7, 2024 No Comments

A: If the IRA owner dies after the required beginning date (RBD) and his/her beneficiary is his/her spouse, the spouse beneficiary may either: Begin death distributions by Dec 31 of the year following the year the IRA owner dies. In this case, the distributions must

How to avoid paying taxes on Social Security income

July 7, 2024 No Comments

A: Some people have to pay federal income taxes on the Social Security benefits they receive. Typically, this occurs only when individuals receive benefits and have other substantial sources of income from wages, self-employed earnings, interest, dividends, required minimum distributions from qualified retirement accounts, and other taxable

If I roll my annuity into an IRA and receive after-tax distributions, will this be considered taxable income?

July 7, 2024 No Comments

A: Distributions of after-tax amounts (amounts already taxed) will not be taxable when distributed to you. However, you will be required to report the amount on your tax return as a non-taxable distribution. The plan should send you a Form 1099-R, which is used to

All Rights Reserved