An advisor’s recommendation to liquidate the investments in a 401(k) account, or to make a qualified plan-to-IRA rollover, is a securities recommendation according to the Department of Labor (DOL), the Securities Exchange Commission (SEC), and FINRA.

Victims of fraud may be able to avoid having the distribution taken from their IRA taxed, despite blowing the 60-day rollover rule, but only at the expense and delay of obtaining a Private Letter Ruling from the IRS.

Simple rules need to be following to avoid paying taxes, or possibly a penalty, when distributions are taken from a Roth IRA.

A deeper dig into the Proposed Regulations for the SECURE Act lead to the conclusion that the new 10-year distribution rule is even more confusing than originally thought.

Not all funds held in a qualified plan retirement account are eligible for a rollover to an IRA.

While there is some relief from the 50% excise tax for years 2021 and 2022 arising from confusion over the SECURE Act’s 10-year distribution rule with regard to retirement plans and accounts, there is still plenty of confusion trying to figure out which beneficiaries benefit from that penalty relief, and other designated beneficiaries who will not benefit.

While the IRS provided relief from the 50% excise tax to those designated beneficiaries who did not take a required minimum distribution from an inherited IRA if the IRA owner was age 72 or older, it provided no relief to those individuals who were conservative and knowledgeable and who took a distribution for 2021 and earlier in 2022 and paid the income tax on what they received from the inherited IRA.

Take-Away: There are strict ordering rules with regard to distributions from a Roth IRA, along with an aggregation rule that often creates some confusion when distributions are taken from a Roth IRA.

Take-Away: A lump sum distribution from a qualified plan, e.g. a 401(k) account, can override ERISA’s spousal consent rules.

There is a new election buried in the SECURE Act 2.0 that may impact spousal beneficiary designations or trusts where a surviving spouse is the sole beneficiary. This election can either produce more benefit for the surviving spouse, or it can lead to a costly mistake.