Great episode as always. So last year in May i transferred a small inherited IRA to a new brokerage. I didn't take the required RMD until after it was in the new brokerage. It was taken in the year it was supposed to be taken out. Is that a problem as far as taxes and the IRS? I have heard different answers from different advisors. What is your thoughts on the matter?
Thank you. That's a good question, and I should mention that inherited RMDs can be extremely complicated, so I can't offer a definitive opinion here without knowing every single detail (which I don't have). That said, it could be possible to do something like this if it was completed as a trustee-to-trustee transfer between two IRAs (the decedent's and your inherited IRA) under current rules. But some situations (workplace plans or 60-day rollovers, as just two examples-there could be others) could potentially be problematic. So, I don't have any official view on this, and I'd always suggest working with a tax expert if you're not sure how to proceed. As always, tax rules can change, and everybody reading this should triple-check with their own tax expert before making any decisions.
The concern I have is the tax consequences of selling shares of mutiple mutual funds to consolidate into one or two accounts.... Are the acount to acount transfers you mentioned tax free?
Great video. I have 15 years to go for my retirment target date. I have both a 457 and 401k (as well as a Roth) . THis scenario has always puzzeled me to combine accounts or not. I Ran my own excell scenarios and found that combining accounts actualy raises my RMD at age 75 w/the new rules. For me it would be better in the long run to keep both 457/401k seperate if I am single considering my tax bracket where as married , combining acocunts would be safer due to being in a better tax bracket. RMD really forces you take take money out mor ethan intended and I can see it widdles down to your early 90's, not that I want to live that long im hoping 85 but just for research purposes leaving $ to your hiers or charity is minimal at old age.
If you have two 401K accounts, a former employer with $100K, and a new employer with only $10K. Should you combine with the new employer to maximize annual returns? Thanks!
That's a good question, and combining them won't necessarily improve your returns, although it could be possible in some circumstances. I prefer to think of your returns strictly in terms of a percentage. If you get 5% in each (smaller) account, that could possibly be equivalent to earning the same 5% in a combined (bigger) account. If we assume you have access to similar investments (more or less) in each plan, you might be able to earn roughly the same in each plan. Then, 5% on 100k would be 5k, and 5% on 10k would be 500 for total earnings of $5,500. Or, if you combine accounts, 5% on that 110k would also be $5,500 of earnings. In many cases, there's not really a better return from combining accounts. But again, anything is possible. There could be other pros and cons of combining accounts, including (maybe) minimizing fees with a single/larger account, among other things. But it really depends on the details of those plans, and moving funds to an IRA might also be worth exploring.
Retirement accounts are generally individual accounts, so you typically cannot combine them even if you wanted to. That applies to IRAs, 401(k), 403(b), 457s, etc. For example, your 401(k) is in your name only (and your employer's, technically), and it generally cannot be combined with a spouse's IRA or 401(k) while you're both living-unless you remove the funds from retirement accounts, which could have tax implications. If one of you dies, the survivor could potentially take over the assets under their own name. That's probably a different topic, and you'd want to discuss the details with a tax expert before making any decisions.
Great episode as always. So last year in May i transferred a small inherited IRA to a new brokerage. I didn't take the required RMD until after it was in the new brokerage. It was taken in the year it was supposed to be taken out. Is that a problem as far as taxes and the IRS? I have heard different answers from different advisors. What is your thoughts on the matter?
Thank you. That's a good question, and I should mention that inherited RMDs can be extremely complicated, so I can't offer a definitive opinion here without knowing every single detail (which I don't have). That said, it could be possible to do something like this if it was completed as a trustee-to-trustee transfer between two IRAs (the decedent's and your inherited IRA) under current rules. But some situations (workplace plans or 60-day rollovers, as just two examples-there could be others) could potentially be problematic. So, I don't have any official view on this, and I'd always suggest working with a tax expert if you're not sure how to proceed. As always, tax rules can change, and everybody reading this should triple-check with their own tax expert before making any decisions.
The concern I have is the tax consequences of selling shares of mutiple mutual funds to consolidate into one or two accounts....
Are the acount to acount transfers you mentioned tax free?
Exactly the information I was looking for. Thank you!
Glad it was helpful!
Great video. I have 15 years to go for my retirment target date. I have both a 457 and 401k (as well as a Roth) . THis scenario has always puzzeled me to combine accounts or not. I Ran my own excell scenarios and found that combining accounts actualy raises my RMD at age 75 w/the new rules. For me it would be better in the long run to keep both 457/401k seperate if I am single considering my tax bracket where as married , combining acocunts would be safer due to being in a better tax bracket. RMD really forces you take take money out mor ethan intended and I can see it widdles down to your early 90's, not that I want to live that long im hoping 85 but just for research purposes leaving $ to your hiers or charity is minimal at old age.
If you have two 401K accounts, a former employer with $100K, and a new employer with only $10K. Should you combine with the new employer to maximize annual returns? Thanks!
That's a good question, and combining them won't necessarily improve your returns, although it could be possible in some circumstances.
I prefer to think of your returns strictly in terms of a percentage. If you get 5% in each (smaller) account, that could possibly be equivalent to earning the same 5% in a combined (bigger) account. If we assume you have access to similar investments (more or less) in each plan, you might be able to earn roughly the same in each plan.
Then, 5% on 100k would be 5k, and 5% on 10k would be 500 for total earnings of $5,500.
Or, if you combine accounts, 5% on that 110k would also be $5,500 of earnings.
In many cases, there's not really a better return from combining accounts. But again, anything is possible.
There could be other pros and cons of combining accounts, including (maybe) minimizing fees with a single/larger account, among other things. But it really depends on the details of those plans, and moving funds to an IRA might also be worth exploring.
I want different ones so i can compare the growth and successes to each other.
Great video
Should you our can you combine accounts with a spouse?
Retirement accounts are generally individual accounts, so you typically cannot combine them even if you wanted to. That applies to IRAs, 401(k), 403(b), 457s, etc. For example, your 401(k) is in your name only (and your employer's, technically), and it generally cannot be combined with a spouse's IRA or 401(k) while you're both living-unless you remove the funds from retirement accounts, which could have tax implications.
If one of you dies, the survivor could potentially take over the assets under their own name. That's probably a different topic, and you'd want to discuss the details with a tax expert before making any decisions.
Da Vinci: ‘ Simplicity is the ultimate sophistication.” Thank you for that excellent reminder, Justin!
Thank you, David! I may have pushed the limits of simplicity by going for 20 minutes, but it seems there was a lot to say.
@@ApproachFinancial Creating art takes time.😀