RMDs

Jill on Money Radio Show: Am I on Track for Early Retirement?

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This week it’s a throw back of sorts, back to when we used to take a bunch of callers every week. So no guest this week, instead we’re giving you a few calls and a slew of emails.

The first call was from Anthony in Arkansas who’s wondering if he’s actually saving too much for retirement. Is there such a thing?

Next was Kelly in North Carolina, also with a retirement question. Only in his 20s, Kelly is looking to do everything he can now to ensure that he has plenty of options down the road.

We started hour two with Joan who was wondering if there’s a best way to handle RMDs. Turns out we also learned that Joan is using way too many funds in her retirement accounts.

As I always like to say, when it comes to investing, less is usually more.

Have a money question? Email me here.

"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

How to Take RMDs

Unless you're one of the lucky ones and have all your money in a Roth IRA and/or brokerage accounts, you'll eventually be forced to take distributions from your tax-deferred accounts. Is there a wrong way or right way to do it?

Have a money question? Email me here.

Please leave us a rating or review in Apple Podcasts.

"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Secure Act 101

After I wrote about the Setting Every Community Up for Retirement Enhancement (SECURE) Act, I received a slew of questions from readers. 

So to help clear up some of the confusion, we’re bringing on IRA guru Ed Slott. (Ed will also join us for a tax season related episode)

The Secure Act includes significant changes to retirement accounts, including:

Age Limit Eliminated for Traditional IRA Contributions

Beginning in 2020, the new law eliminates the age limit for traditional IRA contributions (formerly 70 ½). Now, those who are still working can continue to contribute to a traditional IRA, regardless of their age.

RMD Age Raised to 72

The SECURE Act also raises the age for beginning RMDs to 72 for all retirement accounts subject to RMDs. IRA owners reaching age 70 ½ in 2020 catch a break and will not have to take their first RMD in 2020 now that the RMD deadline has been extended to age 72.

New Exception to the 10% Penalty for Birth or Adoption

The SECURE Act adds a new 10% penalty exception for birth or adoption, but the distribution is still subject to tax. It is limited to $5,000 over a lifetime. The birth or adoption distribution amount can be repaid at any future time (re-contributed back to any retirement account).

IRA Contributions with Fellowship and Stipend Payments

Additionally, the new law allows taxable non-tuition fellowship and stipend payments to be treated as compensation to qualify for an IRA (or Roth IRA) contribution.

Employer Liability Protection for Annuities in Plans

The SECURE Act provides a safe harbor for employer liability protection for offering annuities in an employer plan. This is expected to open the door for more annuity products to be available as investment choices in employer plans.

Good Bye, Stretch IRA

Beginning for deaths after December 31, 2019, the stretch IRA is replaced with a ten year rule for the vast majority of beneficiaries. The rule requires accounts to be emptied by the end of the tenth year following the year of death. There are no annual RMDs. Instead, the only RMD on an inherited IRA is the balance at the end of the 10 years after death. For deaths in 2019 or prior years, the old rules would remain in place.

There are five classes of “eligible designated beneficiaries” who are exempt from the 10-year post-death payout rule and can still stretch RMDs over life expectancy. These include surviving spouses, minor children, disabled individuals, the chronically ill, and beneficiaries not more than ten years younger than the IRA owner.

Have a money question? Email me here.

Please leave us a rating or review in Apple Podcasts.

"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Will the Secure Act Rescue Retirement?

Will the Secure Act Rescue Retirement?

Congress delivered retirement savers a last minute gift: the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which after passing the House in May, was neatly tucked inside a federal government spending bill that the President will sign just before the holiday break. The changes were the biggest in more than a decade.

Year-End Money Moves for 2019

December is upon us, which means I basically have your attention for about two more weeks max.

So while I have you, and as the year comes to an end, it's a perfect time to review some year-end financial planning tips.

For such an occasion there's no better person than Michael Goodman from Wealthstream Advisors. And in the interest of full disclosure, not only is Michael a dear friend of mine, he's also my advisor.

We discussed a variety of financial planning topics to ponder before you shut down for the holidays, including:

  • Selling assets in your portfolio now versus waiting until next year: Losses offset gains that you have taken previously in the year; if you have more losses than gains, you can deduct up to $3,000 of losses against ordinary income.

  • Take Required Minimum Distributions: Generally, once you turn 70 1/2, you must begin withdrawing a specific amount of money from your retirement assets (there are some exceptions). The penalty for not taking your RMD is steep at 50 percent on the shortfall!

  • Consider a Qualified Charitable Distribution (QCD): One way to sidestep the taxation on your RMD is to make a Qualified Charitable Distribution, which allows you to gift directly from your IRA to a charity without having to include the distribution in your taxable income.

  • Making last minute 529 plan contributions: Money saved in these programs grows tax-free and withdrawals used to pay for college sidestep taxes, too. 

So before you completely shut it down for the rest of 2019, you’ll want to listen to this episode to make sure there’s nothing you’re forgetting.

Have a money question? Email me here.

Please leave us a rating or review in Apple Podcasts.

Connect with me at these places for all my content:

https://www.jillonmoney.com/
https://twitter.com/jillonmoney
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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com. 

Year-End Money Moves 2018

Year-End Money Moves 2018

2018 year-end financial planning is a lot different than in previous years, because it is the first full year after the implementation of the Tax Cuts and Jobs Act (TCJA). The good news is that for millions of Americans, the new code should make filing easier. That’s because nearly 90 percent of taxpayers are likely to claim the standard deduction this year, up from 70 percent last year.

CFP® Pro Tip of the Week - December 7, 2018: Required Minimum Distributions (RMDs)

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Have a money question? Email me here.

Year-End Financial Planning Tips

December is upon us, which means I basically have your attention for about two more weeks max.

After that, let’s face it, we’re all checking out for the rest of 2018.

plan 2.jpg

So while I have you, and as the year comes to an end, it's a perfect time to review some year-end financial planning tips.

For such an occasion there's no better duo than Michael Goodman and Brenna McLoughlin from Wealthstream Advisors. And in the interest of full disclosure, not only is Michael a dear friend of mine, he's also my advisor.

We discussed a variety of financial planning topics to ponder before you shut down for the holidays, including:

  • Selling assets in your portfolio now versus waiting until next year: Losses offset gains that you have taken previously in the year; if you have more losses than gains, you can deduct up to $3,000 of losses against ordinary income.

  • Take Required Minimum Distributions: Generally, once you turn 70 1/2, you must begin withdrawing a specific amount of money from your retirement assets (there are some exceptions). The penalty for not taking your RMD is steep at 50 percent on the shortfall!

  • Consider a Qualified Charitable Distribution (QCD): One way to sidestep the taxation on your RMD is to make a Qualified Charitable Distribution, which allows you to gift directly from your IRA to a charity without having to include the distribution in your taxable income.

  • Making last minute 529 plan contributions: Money saved in these programs grows tax-free and withdrawals used to pay for college sidestep taxes, too. You can invest up to $15,000 in 2018 without incurring a federal gift tax and many states offer state tax deductions for the contributions.

  • Considering how tax changes could affect you: With all the changes to the tax code, there’s plenty of items to keep in mind before filing your 2018 returns. 

So before you completely shut it down and wrap up your 2018 finances, you’ll want to listen to this episode to make sure there’s nothing you’re forgetting.

Have a money question? Email us here.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

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https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

https://apple.co/2pmVi50

CFP® Pro Tip of the Week - December 22, 2017

Have a finance related question? Email us at askjill@betteroffpodcast.com. We love feedback so please subscribe and leave us a rating or review in iTunes! Connect with me at these places for all my content: http://www.jillonmoney.com/ https://twitter.com/jillonmoney https://www.facebook.com/JillonMoney https://www.instagram.com/jillonmoney/ https://www.linkedin.com/in/jillonmoney/ https://soundcloud.com/jill-schlesinger http://www.stitcher.com/podcast/jill-on-money http://betteroffpodcast.com/ https://itunes.apple.com/us/podcast/better-off-jill-schlesinger/id431167790?mt=2 "Better Off" theme music is by Joel Goodman, www.joelgoodman.com.