“There are strategies of rolling some amount of traditional 401(k) dollars over into a Roth IRA that are potentially advantageous, especially if you have a couple of years where your income is lower,” observes Angie O’Leary, head of wealth planning at RBC Wealth Management. “Having tax diversification available down the line is really helpful in building that paycheck in retirement.”
Tag: Distributions Tax
Experts say sponsors should offer a Roth option so that participants can diversify their tax situation in retirement.
The agency has told examiners not to challenge plan sponsors who have taken these steps.
Industry observers are pleased to see the overall deferral limits for 401(k) plans left unaffected, but there are still some important changes included in the bill concerning the treatment of DC account loans, hardship withdrawals, nondiscrimination testing, and more.
To qualify for this relief, hardship withdrawals must be made by March 15, 2018.
It appears 401(k) contributions won’t be affected by tax reform, but one industry veteran warns the process is still only just beginning—and that tax uncertainty is “unfortunately not likely to ever go away.”
The relief includes relaxed rules for hardships and loans and relaxed deadlines for filings and disclosures.
An organization comprised of industry advocates and businesses is set out to expand Americans’ access to retirement plans and protect the system’s retirement tax incentives.
One retirement industry advocate says recent meetings on Capitol Hill have left him with the expectation that “we will start to see proposals soon that will have a number of provisions—good and bad—that alter the retirement system.”
The Insured Retirement Institute will spend the year pushing Congress and the Administration to advocate for legislation that would expand Americans’ access to advice and simpler annuities.
Not only will IRS agents look for proof that the hardship was for an immediate and heavy financial need, they will be looking to see if plan sponsors followed notification requirements and third-parties followed reporting requirements.
“The Congress faces an array of policy choices as it confronts the challenges posed by the amount of federal debt held by the public—which has more than doubled relative to the size of the economy since 2007.”
Proposed rules by the IRS would amend the current final regulations under section 417(e) of the Internal Revenue Code regarding the minimum present value requirements of section 417(e)(3) in several areas.
Retirement plans can provide this relief to employees and certain members in disaster area localities affected by Hurricane Matthew and designated for individual assistance by the FEMA.
ERISA attorney outlines key fiduciary responsibilities related to retirement plan distributions and rollovers.
A forthcoming book by Peter Brady at the Investment Company Institute suggests Americans across the income spectrum get a pretty even shake when it comes to retirement benefits.
The proposals include universal retirement accounts and a change to the treatment of tax incentives.
“Top hat” retirement plans aren’t subject to many ERISA requirements, but the unique treatment of the plans under employee benefit and tax law can lead to plan sponsor confusion and costly mistakes.
The Internal Revenue Service has seen leadership changes, a number of employees retiring and a restriction in hiring, but it continues to have a focus on examination and enforcement efforts with retirement plans.
The deadline for some to start taking required minimum distributions (RMDs) is April 1, and the penalty for forgetting—a 50% tax bill—is big.