Author - Megan Russell

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Roth Recharacterization: May Change Your Required Minimum Distribution
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Roth Conversion: Take Your Required Minimum Distribution Out First
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Qualified HSA Funding Distribution
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Can I Contribute to Both a SEP and a 401(k)?

Roth Recharacterization: May Change Your Required Minimum Distribution

Roth conversions and Required Minimum Distributions (RMDs) can be scary to combine if you don’t understand the rules. That being said, with a thorough understanding of the IRS rules, performing a Roth Conversion even after your so-called Required Beginning Date (RBD) can be a breeze.

Before reading this article, make sure you understand how Required Minimum Distributions work by reading our article “Understanding Your IRA Required Minimum Distributions (RMDs)” and the timing requirements for RMDs in years you are doing Roth conversions by reading our article “Roth Conversion: Take Your Required Minimum Distribution Out First.”

A …

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Roth Conversion: Take Your Required Minimum Distribution Out First

The average article you can find on the Internet about either Required Minimum Distributions (RMDs) or Roth Conversions will be littered with all sorts of scary ways that you can make expensive errors. It’s no wonder that most people, advisors and investors alike, shy away from mingling the two concepts by performing a Roth conversion while the owner is subject to RMDs.

That being said, with a thorough understanding of the IRS rules, performing a Roth Conversion even after your so-called Required Beginning Date (RBD) can be both easy and profitable.

A simple summary of how to meet your Required …

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Qualified HSA Funding Distribution

Traditional IRAs and Health Savings Accounts (HSAs) have a lot in common with one another. Both give you a tax deduction when you fund them, both have limits about how much can be contributed each year, and both require you to pay income tax on any withdrawals after the age of 65.

There are also many differences that make HSAs more appealing, most notably, that you do not have to pay tax on withdrawals from HSAs for qualified medical expenses. In our article, “When Should You Stop Funding Your HSA?,” we show how “over-saving” for your healthcare expenses …

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

SEP (Simplified Employee Pension) plans are a type of retirement plan, similar to a 401(k), for small businesses and self-employed individuals.

SEP IRAs are cheaper and simpler to set up and manage than 401(k)s. As a result, they are an attractive option for single-employee owner-run businesses. Their main downside is that they provide fewer features than 401(k) plans. Most notably, SEP IRAs don’t allow a Roth option.

SEP IRAs are a tax-deferred savings vehicle, meaning that contributions to the plan are deducted on your taxes now and only taxed when you withdraw the assets. Like other tax-deferred savings, SEP IRAs …

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