August 24, 2017

Value of a Roth Segregation Conversion Strategy

Value of a Roth Segregation Conversion Strategy

While most investment advisors do one total conversion or partial conversion here or there, we have a dedicated Roth segregation strategy, which adds real value to our clients accounts.

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When You Should Not Do a Backdoor Roth

When You Should Not Do a Backdoor Roth

Like how diner coffee gets more bitter as the waitress tops off your cup with more coffee from the pot, so too the growth on your nondeductible assets increases your tax owed by decreasing the percent post-tax assets in your cup.

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The Biggest Mistake You Can Make With Your Backdoor Roth

The Biggest Mistake You Can Make With Your Backdoor Roth

Yikes! This is a costly mistake.

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Age Restriction on Qualified Charitable Distributions Limits Inherited IRA Gifting

Age Restriction on Qualified Charitable Distributions Limits Inherited IRA Gifting

Unfortunately the age restriction makes the charitably-inclined young, who are more likely to be in the 0% capital gains bracket, unable to make QCDs.

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Our Customized Roth Conversion Recommendations

Our Customized Roth Conversion Recommendations

I have learned there are so many more wise plans than just “top of the bracket” conversions.

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6 Ways To Prevent Your Estate Plan From Ruining Your Roth IRA

6 Ways To Prevent Your Estate Plan From Ruining Your Roth IRA

Many executors, trustees, or even estate plans make careless mistakes which end up in Roth IRAs being distributed too quickly. Here’s a list of ways to prevent your estate plan from ruining your Roth.

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How to Calculate Your RMD: a Uniform, Inherited, and Joint Divisor Calculator

How to Calculate Your RMD: a Uniform, Inherited, and Joint Divisor Calculator

There are different tables and formulas used to calculate your RMD divisor based on your particular circumstances. Here is a calculator for the three most common.

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How You Take Your Inherited IRA RMD Is the Exception to the Rule

How You Take Your Inherited IRA RMD Is the Exception to the Rule

Inherited RMD rules demonstrates the power and importance of beneficiary designations and why it is so important to set them.

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What is the 5-Year Roth Rule?

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You can’t touch the earnings on your contributions until you’ve had an account open for 5 years and you’re either over age 59 ½ or you meet special exceptions.

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RMD Mistake: Missing a Spousal Rollover

RMD Mistake: Missing a Spousal Rollover

When a spouse inherits retirement account assets, they have the right to do what is called a “Spousal Rollover” or “Spousal Transfer.” It is almost always the right option.

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RMD Mistake: Not Using the Joint Divisor

RMD Mistake: Not Using the Joint Divisor

If you are a mixed-decade couple, take advantage of the Joint divisor by making your spouse your primary and sole beneficiary for your IRA and use the Joint Life and Last Survivor Expectancy Table to find your RMD.

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RMD Mistake: Failing to Take Your RMD

RMD Mistake: Failing to Take Your RMD

The key to getting the waiver though is showing that “you are taking reasonable steps to remedy the shortfall.”

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RMD Mistake: Depositing to Your Checking Account

RMD Mistake: Depositing to Your Checking Account

Although legally fine, this strategy often causes you to accidentally increase your spending every year and decrease your savings. Don’t let the IRS rules about IRA withdrawals tempt you into spending money you had planned to save.

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RMD Mistake: Taking Out Too Much Just Because

RMD Mistake: Taking Out Too Much Just Because

Some people don’t stop at distributing just the required minimum. They think, “Well, while I’m at it, I may as well pull out a little bit more so we can fully cover the kitchen remodel…”

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Q&A: What’s My Roth Conversion Limit?

Q&A: What’s My Roth Conversion Limit?

The legal answer to this question is: there is no limit. The practical answer is: it depends on a number of things.

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Mailbag: Can I Contribute To An IRA The Year I Turn 70 1/2?

squirrel evergreen

Even though you are required to start taking RMDs you can still take advantage of significant tax planning savings.

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Can I Continue Retirement Saving Past Age 70 1/2?

snow squirrel

The rules for post-70 ½ IRA contributions depend upon whether the account is a traditional IRA, Roth IRA or SEP IRA.

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2017 Employer-Sponsored Retirement Plan Limits

three horses

Here are the limits for how much you and your employer can contribute to retirement accounts on your behalf.

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How Can I Give Away Money from My IRA?

pile o' gifts

What if you do not need all the money from your RMD and you are also charitably inclined?

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Fixing 401(k) Rollover Mistakes

pen signging

The IRS has a rule that if you are doing a rollover for a 401(k), you have 60 days to complete that process. But what if you experience a tragedy and can’t finish on time?

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Roth IRAs Make Great Estate Planning Tools

at the beach

Taking the smallest distribution each year will ensure the beneficiary achieves the maximum tax-free growth of tax-free income.

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Don’t Forget to Rebalance All Your Assets

stacked rocks

It can be easy to forget about your company’s 401(k) because you aren’t depositing the money yourself, your pre-tax contributions are deducted from your paycheck and are electronically deposited by your employer.

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How Much Can I Contribute to My Retirement Accounts?

potted flowers

With many types of retirement accounts available, it can be difficult to keep track of how much you can put away where, especially if you are eligible to contribute to multiple accounts.

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Do Children Need To File A Tax Return To Fund Their Roth IRA?

Do Children Need To File A Tax Return To Fund Their Roth IRA?

The IRS does not require dependents whose gross income is only earned income to file a tax return if the amount is less than a certain amount.

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Roth Recharacterization: May Change Your Required Minimum Distribution

Roth Recharacterization: May Change Your Required Minimum Distribution

A Roth recharacterization is a true undo; it is as though you never converted those assets in the eyes of the IRS. This includes recalculating your RMD had you not converted the assets.

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Roth Conversion: Take Your Required Minimum Distribution Out First

Roth Conversion: Take Your Required Minimum Distribution Out First

A simple summary of how to meet your Required Minimum Distribution in the same year as you perform a Roth Conversion is the axiom: RMD dollars must come out first.

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Qualified HSA Funding Distribution

Qualified HSA Funding Distribution

There is an obscure tax rule that allows a one-time Traditional IRA-to-HSA conversion called a Qualified HSA Funding Distribution (QHFD).

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Can I Contribute to Both a SEP and a 401(k)?

Can I Contribute to Both a SEP and a 401k?

SEP plans offer a powerful way to provide for your own retirement in the same way that 401ks do.

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What is a Roth Conversion?

What is a Roth Conversion?

If you don’t have retirement savings in Roth IRAs, it’s time you considered their benefits. Assets in traditional IRAs can be rolled into Roth IRAs without a withdrawal penalty.

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Can I Contribute to my Roth IRA?

Can I Contribute to my Roth IRA?

There are some cases that are not as straightforward and if you fall into these categories, you might not know whether or not you are allowed to contribute to a Roth IRA.

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Fund Your 401(k) If You Believe In Free Markets

Fund Your 401(k) If You Believe In Free Markets

I recently read a foolish article entitled “Call for a National Savings Plan” that assumed we haven’t tried a national savings plan already.

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Start Early on Retirement Planning

Start Early on Retirement Planning

Retirement planning should begin the moment you receive your first paycheck.

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Four Things You Can Do with Your Roth Before April 15

beach sprint

If you have not yet funded your Roth account for 2015, it is not too late!

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How Roth Conversions Are Reported to the IRS

How Roth Conversions Are Reported to the IRS

The Internal Revenue Service (IRS) is notorious for misunderstanding the recharacterizations of Roth conversions.

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Asset Allocations for UVA Retirement Plans at Fidelity

Asset Allocations for UVA Retirement Plans at Fidelity

The University of Virginia plan includes funds sufficient to produce these excellent portfolios.

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Marotta’s 2016 UVA Fidelity 403(b) Calculator

University of Virginia's Serpentine Walls

Age appropriate asset allocation for 2016 using the choices available in the University of Virginia’s Fidelity 403(b) Tax Deferred Savings Plan (TDSP).

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Marotta’s 2016 UVA Fidelity 401(a) Plans Calculator

UVA Fidelity 401(a) Plans Calculator

Age appropriate asset allocation for 2016 using the choices available in several of the University of Virginia’s Fidelity Retirement Plans.

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2016 Employer-Sponsored Retirement Account Limits

Retirement Cash Jar

Here are the limits for how much your employer can add to retirement accounts on your behalf.

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After-Tax IRA Contributions Must Be Reported On IRS Form 8606

After-Tax IRA Contributions Must Be Reported On IRS Form 8606

The backdoor Roth strategy involves contributing after-tax funds to a traditional IRA.

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Understanding Your IRA Required Minimum Distributions (RMDs)

Understanding Your IRA Required Minimum Distributions (RMDs)

After you reach the age of 70 1/2, the IRS requires you to begin taking minimum distributions from your traditional retirement accounts.

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When Are Taxes Due On A Roth Conversion?

When Are Taxes Due On A Roth Conversion?

Any tax which is ultimately going to be owed is owed by April 15th. Otherwise it may be subject to interest and penalties.

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Can I Put My RMD Into A Roth IRA?

Can I Put My RMD Into A Roth IRA?

Annual required minimum distributions must be satisfied before any additional amounts are converted to a Roth IRA.

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Radio Interview: Which Retirement Accounts Should I Fund?

Radio Interview: Which Retirement Accounts Should I Fund?

David John Marotta was interviewed on radio 1070 WINA discussing which retirement accounts you should fund for the best tax outcomes.

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Can I Contribute To A Roth IRA If I Don’t Have A Job?

Can I Contribute To A Roth IRA If I Don't Have A Job?

You can only contribute to your Roth IRA if you have what the IRS calls “earned” income. This makes it all the more important to contribute to your Roth IRA every year you can.

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How Much Can I Contribute To A Roth IRA If I Earn Too Much?

How Much Can I Contribute To A Roth IRA If I Earn Too Much?

I’m on the borderline for being able to contribute to a Roth IRA. How do I determine how much I can contribute?

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How To Correct Excess Roth IRA Contributions

How To Correct Excess Roth IRA Contributions

Regardless of the reason, if you have put too much money in your Roth IRA, the solution is the same.

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Can I Contribute To My Wife’s Roth IRA?

Can I Contribute To My Wife's Roth IRA?

I have earned income but my wife does not. Can I contribute to my wife’s Roth IRA?

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What is a Backdoor Roth?

What Is A Backdoor Roth?

Even over the income threshold, you may still be able to add funds to your Roth IRA with what is called a backdoor Roth.

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Mailbag: Roth IRA vs. Roth 401k, Which is Better?

Mailbag: Roth IRA vs. Roth 401k, Which is Better?

Differing legislation makes one of the two preferable.

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How Much Can I Contribute To My SEP IRA?

How Much Can I Contribute To My SEP IRA?

The calculations for this are a little strange. Here is the formula and two examples of how it works to help you.

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