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Bipartisan Support in Congress to Make Retirement More Secure

Posted By Lineweaver Financial Group
July 02, 2019 Category: Congress, Retirement, IRA

by LFG Tax Director, Mark Sipos On May 23rd, 2019, the U.S. House of Representatives voted overwhelmingly in favor of the SECURE Act, which stands for "Setting Every Community Up for Retirement Enhancement." Most of the provisions in the act are designed to make it easier for more people to save for retirement, and for more employers to offer retirement plans for their employees. One notable provision in the bill would essentially end what's known as the "stretch IRA." Under the current law, when a beneficiary inherits an IRA, the beneficiary can choose to have the IRA balance distributed in two ways: either in required minimum distributions based on his or her life expectancy, or during the five years after the original account holder passes. Making maximum use of the IRA's taxdeferred compounding like this is known as a "stretch IRA." Under SECURE, in most instances an inherited IRA would have to be fully distributed within 10 years of the original owner's death, although there are some exceptions. Some additional areas the bill covers are as follows: • The repeal of the maximum age for traditional IRA contributions, which is currently 70½ • An increase of the required minimum distribution age for retirement accounts to 72 (up from 70½) • Allowing long-term part-time workers to participate in 401(k) plans • Increase of the auto-enrollment safe harbor cap to 15% from 10% • Allowing more annuities

Avoiding Costly Mistakes with Your IRA Distributions

Avoiding Costly Mistakes with Your IRA Distributions

Posted By Lineweaver Financial Group
February 21, 2018 Category: RMD, IRA, Distribution, Taxes

At age 70 you need to be aware of these rules.  If you have retirement accounts, the IRS has allowed you to have assets growing in those accounts without paying income taxes on the income or gains. At age 70 ½, the IRS wants to begin taxing those accounts by making you take money out, whether you want to or not. Required Minimum Distributions (RMDs) are one of those facts of life that many dread, and that make life even more confusing and complicated. Let’s try and reduce the confusion. For retirement account owners, the RMD rules apply to Traditional, SEP and SIMPLE IRAs, qualified plans like 401ks, 403(b)  and governmental 457(b) accounts. The RMD rules do not apply to Roth IRA owners, but they do apply to Roth IRA beneficiaries. If a non-spouse inherits a Roth IRA, they are required to take RMDs no matter what their age is, just like the non-spouse beneficiary of all retirement accounts. A word of caution: if you inherit an IRA from someone other than your spouse, you must begin taking RMDs the year after the death of the owner, not when you reach 70 ½. Penalty for non-compliance, 50% of the amount you should have withdrawn! Generally, your first RMD is due for the year you reach age 70.5. However, you need not start receiving distributions from your retirement account until your required beginning date (RBD). Generally, your RBD is April 1 of the year following the year you reach age 70.5. If you are still employed at age 70.5 and you parti

Your 401(K) Isn't Your Only Option

Your 401(K) Isnt Your Only Option

Posted By Lineweaver Financial Group
October 03, 2017 Category: IRA, 401(k), Retirement, Retirement Planning

You’ve heard it over and over again, from many places –  never, ever make an early withdrawal from your 401(k), unless it’s an emergency.  And, we agree - that’s often good advice.  But there are a few exceptions where an early withdrawal may be to your advantage. Some companies allow active employees participating in a qualified employer-sponsored retirement plan to withdraw a portion of their account balance upon request, without demonstrating a specific financial need, usually at age 59 ½. This is called an in-service, non-hardship withdrawal. One reason you may want to consider this option is that by rolling over a portion of employer-sponsored retirement plan assets to a rollover IRA, you may be able to significantly expand your investment choices, especially if you have limited choices in your employer-sponsored retirement plan.  401(k)s typically offer limited fund options to participants.  Spreading the risk among a group of investments is generally a good thing when saving for the long term.  But this usually means you miss the opportunity on select investments. Outside of your 401(k), you could invest in specific sectors that may have greater long-term growth potential, like healthcare.  You could move into investments that will have lesser impact with anticipated rising interest rates, like limited-duration bond funds. You could look at alternative investments, like real estate, gold and other com

Why a Roth Conversion can be a Smart Retirement Strategy

Why a Roth Conversion can be a Smart Retirement Strategy

Posted By Lineweaver Financial Group
June 08, 2017 Category: Roth, IRA, Retirement

There are many options when it comes to retirement, and it can be hard to know which is right for you. One of those options – a ROTH IRA conversion, can be a great strategy for some people. First, a quick refresher on how a ROTH IRA differs from a Traditional IRA. With a Traditional IRA: 1.      You receive an upfront tax deduction on your annual contributions 2.      Growth is tax-deferred growth until it’s withdrawn 3.      Withdrawals are taxable as ordinary income 4.      There are penalties if you take withdrawals before the age of 59 ½ 5.      You have required minimum distributions (RMDs) that begin at age 70 ½ With a ROTH IRA 1.      Your contributions are “front loaded” meaning you use after-tax dollars for your contributions 2.      Growth is tax-free 3.      Withdrawals are never taxed 4.      Earnings can be taken income-tax-free if you are at least 59 ½ and have had the ROTH IRA for at least 5 years 5.      There are no required minimum distributions – ever! If you currently have a Traditional IRA, but some of the benefits of a ROTH IRA sound appealing to you, there is a way to “convert” your traditional IRA into a ROTH IRA – this is

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