Headlines about "IRAs"
Gathered from the web by the editors at BenefitsLink.com.
[Opinion] Obama Retirement Plan Places Primary Responsibility for Retirement Saving on Households (PDF)
3 pages. Excerpt: "Tucked into the blueprint for financial regulatory reform1 released last week is an outline of the president's proposals for strengthening retirement plans and encouraging retirement savings. Though some of the proposals in the Department of Treasury's white paper are welcome and overdue, they should not be mistaken for the kind of comprehensive reform that is needed to fix a system in crisis. . . . The White House plan is two-pronged. First, it would require many employers who do not offer retirement plans to set up automatic payroll deductions into Individual Retirement Accounts (IRAs), using inertia to boost participation by having workers opt out rather than opt in. Second, it would expand eligibility for the Saver's Credit and make it refundable, giving low- and moderate-income families who owe little or no income tax an incentive to save." (Economic Policy Institute)
IRS Shoots Down New Roth Ploy: Recent Ruling Finds That Transactions Moving Income Were Similar to Those Outlawed Earlier
Excerpt: "[T]he Internal Revenue Service repeatedly has taken steps to minimize Roth IRA scams. A recent IRS ruling took another step in that direction, determining that transactions entered into by a husband and wife were substantially similar to transactions outlined in IRS Notice 2004-8. An error in reporting the couple's transactions, along with the transactions themselves, has left the two exposed to severe and potentially devastating penalties.' (Investment News; free registration required)
Most Small Employers Would Face Low Costs to Implement Automatic IRAs
Excerpt: "This report finds that most employers would likely face low costs to implement a system of automatic individual retirement accounts (IRAs). Automatic IRAs can be designed to integrate into existing business payroll systems in a way that will minimize an employer's responsibilities. Most small employers will have only small incremental costs to modify their payroll processing systems in order to facilitate enrollment in Automatic IRAs and withholding of Automatic IRA contributions. The widespread adoption of automated payroll systems, including within the small business sector, and the ability of those system providers to build the Automatic IRA into their services, will make this new employee benefit relatively simple to implement." (AARP)
RothRetirement.com Site Educates on the 2010 Roth IRA Conversion Option
Excerpt: "Convergent Retirement Plan Solutions of Brainerd, Minnesota, and Archimedes Systems, of Waltham, Massachusetts, have jointly launched a Web site, RothRetirement.com, to help educate consumers about the 2010 Roth IRA conversion. A news release said the site includes a library of short educational clips on the 2010 Roth IRA conversion, a compendium of nearly 100 frequently asked questions, a consumer version of the Roth IRA Conversion Optimizer calculator, and links to additional online Roth articles and resources. [The site is available at www.convergentrps.com.]" (PLANSPONSOR.com; free registration required)
[Guidance Overview] New Tax Rules Will Give More People Access to a Roth IRA, One of Best Savings Plans for Later Life
Excerpt: "Starting Jan. 1, the income limits that have prevented many individuals . . . from converting a traditional IRA or employer-sponsored retirement plan to a Roth will be eliminated. The change -- one of the biggest and most important on the IRA landscape in years -- will widen the entryway to one of the best deals in retirement planning. With a Roth IRA, virtually all income growth and withdrawals are tax-free." (The Wall Street Journal)
Tax Proposal Has Silver Lining for IRAs, Social Security
Excerpt: "[HR 882] proposes to increase the required age for distributions from qualified retirement plans to 75 from 70?. The effective date would be for years beginning after the date of enactment. Thus, if the bill were to become law this year, the age 75 rule would be effective for 2010 and thereafter. The bill would also provide for contributions to traditional individual retirement accounts to the year prior to age 75 rather than the present rule of 70? ." (Investment News; free registration required)
The U.S. Retirement Market, 2008 (PDF)
Excerpt: "mployer-sponsored retirement plans play a key role in helping American workers save for retirement. The bulk (nearly two-thirds) of Americans' retirement assets was held in employer-sponsored retirement plans at year-end 2008. Furthermore, a significant portion of assets held in IRAs originated in employer plans and were then transferred (or 'rolled over') into IRAs." (Investment Company Institute)
The 401(k): Employers Look to Cut Costs, Workers Crave Stability Following Market Crash
Excerpt: "Retirement plan consultants foresee financial firms and employers embracing hybrid plans with features of both 401(k)s and pensions. Fred Cox, director of compensation and benefits at Evansville-based Vectren Corp., talked with a vendor in late May about adding an annuity option to the gas and electric utility's 401(k) plan. The option would help participants invest in stable choices that guarantee a certain yearly payment upon retirement -- like a pension does. 'What you've created is sort of a floor out of what's going to come out of that annuity,' Cox said. Such tweaks are not enough for Monique Morrissey, an economist at the liberal Economic Policy Institute in Washington, D.C. She wants to see individual retirement accounts mandated, controlled and guaranteed by the government -- because 401(k)s have failed to provide Americans what they need in retirement." (Indianapolis Business Journal)
Administration Explores 'R Bond' As Option for Retirement Accounts
Excerpt: "Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the president's proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds. J. Mark Iwry, deputy assistant secretary for retirement and health policy at the Department of the Treasury, said that administration officials are exploring some 'conservative' options for investing the assets of 78 million Americans that he estimates could be automatically enrolled in this 'universal' workplace retirement system." (Investment News; free registration required)
Leaving 401(k) Money With Former Employer, Instead of IRA Rollover, Can Protect Savings
Excerpt: "Depending on the state where you live, leaving a plan in the sheltering arms of a former employer might offer more protection from creditors than a rollover IRA" (The Wall Street Journal)
Shift of Assets to Roth IRA Corporation Constituted Reportable Transaction, Chief Counsel Rules
Excerpt: "A transaction under which a couple set up a corporation, opened Roth IRA accounts, and then each directed their Roth IRA accounts to purchase 50% of the stock of the corporation constituted a reportable transaction, the IRS Chief Counsel has ruled in IRS Letter Ruling 200917030." (Wolters Kluwer)
[Guidance Overview] Exception to Premature Distribution Tax for IRA Distributions Used to Pay Health Insurance Premiums Is Limited to Payments Made During Tax Year of Distribution
Excerpt: "A taxpayer who received IRA distributions in 2004 was not entitled to claim the exception from the 10% early withdrawal tax for the amount of premiums that she paid in 2003 and 2005, even though she may have been prevented from taking a distribution from her IRA in 2003 because of state unemployment compensation laws, the U.S. Tax Court has ruled in Davis v. Commissioner of Internal Revenue." (Wolters Kluwer)
[Guidance Overview] SEPP Is Not Busted Because of Additional Distributions That Qualify for Another Exception?
Excerpt: "The US Tax Court issued a summary opinion, in which they held that an amount withdrawn from an IRA that is earmarked for a substantially equally periodic payment (SEPP) program, does not result in a modification if the amount qualifies for another exception under IRC ? 72(t)[1]. This decision surprised many tax and retirement planning professionals, as previously they have always understood from available guidance that the only distributions that could occur from such an account without causing a modification was a SEPP." (RetirementDictionary!)
[Guidance Overview] Self-Directed IRA Myths (PDF)
10 pages. Excerpt: "Many of [the self-directed individual retirement account] products are quite legitimate, and the sponsors work hard to provide meaningful information to help accountholders distinguish between legally acceptable investment practices and activities that may result in unfavorable tax consequences or, worse, complete loss of the tax-advantaged IRA status. Sometimes it is simply impossible to cover a subject in a comprehensive manner, and the materials warn accountholders to hire knowledgeable counsel. Nonetheless, in the opinion of the Richard Matta, most of these materials perpetuate certain myths ? even among the lawyers ? that range from merely incomplete to outright wrong. [This] article addresses certain self-directed IRA 'myths'." (Groom Law Group)
Tax Strategies for IRA Owners Affected by the Market
Excerpt: "The sharp stock market decline we've experienced has no immediate tax effect on pre-retirement-age taxpayers who invested their traditional IRAs or Roth IRAs in stocks and mutual funds, since losses as well as gains are not recognized within either type of IRA. At the same time, there are some tax strategies for owners of traditional or Roth IRAs to consider, whether they are still in their working years, or are retired and taking required minimum distributions (RMDs) from their accounts." (Thomson Reuters, "CPA Wealth Provider," via On Wall Street)
[Opinion] Roth IRAs Were Fiscal Mistake and Should Not Be Extended to Federal Government's Thrift Savings Plan
Excerpt: "The fact is, Congress was not focused on choice when it originally created the Roth alternative. Its goal was to hide the cost of traditional IRAs to the federal budget. Since the contribution is taxed when it is made, the loss of revenue to the Treasury is hidden until the money is withdrawn in the future, usually far beyond the five- or 10-year periods used for federal budget estimates. Even more outrageous, budgetary sleight-of-hand enabled Congress to pretend that they actually raised revenue by creating Roths. Thus, many taxpayers were given the option of converting a traditional IRA into a Roth. Since they had to pay income taxes in the year of conversion, this temporarily increased the amounts collected by the Treasury. The situation will get worse next year. Until now, Roth conversions are only allowed for those whose adjusted gross income is $100,000 or less. In 2010 everyone can convert, and higher-income people almost certainly will. Although taxes will be paid earlier, this will actually be a tax cut for the affluent, and will make our future budget picture much worse." (Pension Rights Center)
Federal Retirement Thrift Investment Board Endorses Roth IRA Option for Enrollees
Excerpt: "The Federal Retirement Thrift Investment Board on Monday officially endorsed a proposal to give Thrift Savings Plan participants the option to invest in a Roth Individual Retirement Account, but did not green light a move that would allow the TSP to create additional investment funds." (GovernmentExecutive.com)
[Guidance Overview] IRS's Dirty Dozen Includes Retirement Plan Arrangements
Excerpt: "This is the week when the nation turns its attention to taxes ? and the Internal Revenue Service turns its attention to tax scams. Among the so-called 'Dirty Dozen' scams identified by the Internal Revenue Service (IRS) is one involving retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). According IR-2009-041, the IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to IRAs as well as transactions that are not properly reported as early distributions." (PLANSPONSOR.com; free registration required)
Entrepreneurs Financing Start-Ups from Retirement Accounts: The 'Rollover As Business Start-Ups'
Excerpt: "The Internal Revenue Service has recently expressed concerns about the technique. This method of financing start-ups has been around--and controversial--for some time. Forbes first looked at the pros and cons of using retirement accounts to finance businesses in 2004. Our advice: Entrepreneurs interested in the method should split their IRAs into two, one to invest in the new business and the other to manage a diversified retirement portfolio separate from the new business and associated risks." (Forbes.com)
New Math for IRA Savings
Excerpt: "Usually, the last thing anyone giving financial advice needs to do is to tell Americans to dodge taxes. . . . Yet there's a way to completely avoid paying taxes on retirement savings, and it's perplexingly unpopular. With a Roth IRA, your retirement investments grow tax free. If you get a statement showing you have $200,000 in a Roth IRA, that amount -- and not some lesser figure you have to guesstimate after trying to adjust for taxes -- is what you've got, and you can spend it whenever and however you please. But just 19 percent of working Americans have Roth IRAs, even though 90 percent are eligible for them, according to Fidelity." (SmartMoney)
IRA Proposal Would Prohibit Those Affiliated with Product Companies from Giving Advice
Excerpt: "At a hearing last week, [Rep. Robert] Andrews said that advisers who provide advice on IRAs should be independent of companies that sell investments." (Investment News; free registration required)
[Guidance Overview] Tax Court Summary Opinion: Bailey v. Commissioner: Early Distribution Penalty Applies, Unless the Account Is an IRA
Excerpt: "This case confirms that the early distribution penalty exception for first time home buyers does not apply to retirement accounts, unless they are IRAs . . . . This issue could have been avoided, if the taxpayer had rolled over the amount to an IRA, and then made the withdrawal from the IRA." (RetirementDictionary.com)
Morgan Stanley Fined $7M for Broker IRA Rollover Misconduct
Excerpt: "The Financial Industry Regulatory Authority (FINRA) announced that it has fined Morgan Stanley & Co. $3 million and ordered it to pay more than $4.2 million in restitution to resolve charges that its supervisory system failed to prevent brokers from violating FINRA rules on handling of IRA rollover/retirement accounts." (PLANSPONSOR.com; free registration required)
House Reviews Investment Advice Given to 401(k), IRA Holders
Excerpt: "Lawmakers took a hard look [today] at rules adopted in the final days of the Bush administration on how millions of Americans with 401(k) and individual retirement accounts get guidance on investing for retirement. Members of a congressional panel said they wanted to ensure that retirement account holders have access to unbiased investment advice, an issue that's all the more important since stock market declines drained billions from retirement savings." (AP via The New York Times; free registration required)
DOL Provision of ERISA Relief Facilitating Liquidity for Auction Rate Securities (PDF)
2 pages. Excerpt: "During the week of February 23, 2009, the Department of Labor continued to support the facilitation of liquidity for auction rate securities (ARS) held by retirement plans and IRAs through ERISA prohibited transaction exemptions." (Sutherland)
[Guidance Overview] Relief from Minimum Required Distribution from Retirement Plans and IRAs
Excerpt: "This advisory provides an overview of the tax relief [provided] for both employers and retirees, and includes steps they can take to ensure they make the best use of this opportunity." (Davis Wright Tremaine LLP)
[Opinion] Automatic IRAs: Extending Retirement Saving Opportunities to 75 Million More American Workers (PDF)
2 pages. Excerpt: "This policy fact sheet describes the steps that employers can take to facilitate employee saving for the nearly 1 out of every 2 workers -- 75 million working Americans -- who have no employer plan and thus no effective way to save at work. This fact, a steadily declining saving rate since the 1980s, and the expectation that social security will not provide increased benefits, exacerbate the problem of inadequate retirement saving. Research and experience both point to a simple and effective solution: the Automatic IRA." (Georgetown University via The Retirement Security Project)
[Opinion] Groom Law Group Comments on Possible Changes to Administrative Procedures and Rules for IRAs (PDF)
10 pages. Excerpt: "On behalf of a group of financial institutions which offer products and services to individual retirement accounts and annuities, Groom Law Group submitted the [target] letter to the IRS requesting that the Service consider several areas in which the administrative procedures and rules for IRAs for tax purposes, which have not significantly changed in many years, could be improved or supplemented." (Groom Law Group)
Proposals in President's Budget Aim to Boost Retirement Savings
Excerpt: "President Barack Obama's budget blueprint released on Thursday includes proposals for an automatic IRA plan for workers and an expansion of the Saver's Credit. According to a press release from The Retirement Security Project, the Automatic IRA proposal would pursue universal retirement savings coverage by allowing employees not covered by qualified retirement plans to save for retirement through automatic payroll deposit IRAs. The Automatic IRA proposal was introduced in the 110th Congress as the 'Automatic IRA Act of 2007.'" (PLANSPONSOR.com; free registration required)
[Opinion] Written Statement for the Hearing Record: Hearing on 'Strengthening Worker Retirement Security' (PDF)
10 pages. Submitted to House of Representatives Committee on Education and Labor, February 24, 2009. Excerpt: "An additional area in which reform would be particularly constructive is increasing the number of Americans who have access to a defined contribution or other workplace retirement plan. The American Benefits Council will soon issue a set of policy recommendations as to how this goal of expanded coverage can be achieved. We believe coverage can best be expanded through adoption of a multi-faceted set of reforms that will build on the successful employer-sponsored retirement system and encourage more employers to facilitate workplace savings by their employees. This multi-faceted agenda will include improvements to the current rules governing defined contribution and defined benefit plans, expansion of default systems such as automatic enrollment and automatic escalation, new simplified retirement plan designs, expanded retirement tax incentives for individuals and employers, greater use of workplace IRA arrangements (such as SIMPLE IRAs and discretionary payroll deduction IRAs), more effective promotion of existing retirement plan options, and efforts to enhance Americans' financial literacy." (American Benefits Council)
[Guidance Overview] Summary of Recent Legislative Changes Affecting Individual Retirement Arrangements
Excerpt: "Recent developments have spawned a variety of targeted legislative changes to the rules that govern individual retirement arrangements ('IRAs'). Specifically, the Heroes Earnings Assistance and Relief Tax Act of 2008 ('HEART Act') enacted a number of changes designed to benefit those in military service, and the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 ('TEAMTRA') (which was enacted as part of the Fall 2008 economic stimulus package) and the Worker, Retiree, and Employer Recovery Act of 2008 ('WRERA') contained several provisions designed to assist those affected by the economic downturn." (K&L Gates LLP)
[Guidance Overview] Summary of Recent Legislative Changes Affecting Individual Retirement Arrangements
Excerpt: "Recent developments have spawned a variety of targeted legislative changes to the rules that govern individual retirement arrangements ('IRAs'). Specifically, the Heroes Earnings Assistance and Relief Tax Act of 2008 ('HEART Act') enacted a number of changes designed to benefit those in military service, and the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 ('TEAMTRA') (which was enacted as part of the Fall 2008 economic stimulus package) and the Worker, Retiree, and Employer Recovery Act of 2008 ('WRERA') contained several provisions designed to assist those affected by the economic downturn. The [target page] is a brief summary of these legislative changes." (K&L Gates LLP)
Talks Begin on Possible Legislative Enhancements to Federal Thrift Savings Plan
Excerpt: "Thrift Savings Plan officials have started discussions with Congress on proposed legislative improvements to the retirement savings program, including adding a Roth Individual Retirement Account option." (GovernmentExecutive.com)
Tax-Rate Comfort and Flexible Withdrawals Among Selling Points for Roth Accounts
Excerpt: "With a Roth, contributions are made after taxes, but your earnings and withdrawals are not taxed after age 59 1/2. In comparison, contributions to a traditional IRA or 401(k) are tax-deductible, and earnings grow tax-free too. But you have to pay tax on the savings that you take out in retirement. Mathematically, there is little difference between a Roth account and a traditional retirement plan if your tax rate remains the same. You're simply choosing either to pay Uncle Sam now or later." (Chicago Tribune)
IRA Appendix: Additional Data on Ownership of IRAs in U.S. Households, 2008 (PDF)
20 pages. Excerpt: "The January 2009 issue of Fundamentals covers U.S. households' Individual Retirement Account (IRA) ownership in 2008. The report highlights data collected by the Investment Company Institute in a recent survey of households owning IRAs. This appendix provides supplementary tables with additional detail for the January 2009 Fundamentals." (Investment Company Institute)
The Role of IRAs in U.S. Households' Saving for Retirement, 2008 (PDF)
20 pages. Excerpt: "Among all IRA-owning households, 78 percent also participated in employer-sponsored retirement plans; that is, they had defined contribution (DC) plan balances, current defined benefit (DB) plan payments, or expected future DB plan payments. Another 29 percent of U.S. households reported employer-sponsored retirement plan coverage, but no IRAs. All told, 70 percent of all U.S. households had some type of formal, tax-advantaged retirement savings." (Investment Company Institute)
Odds Are That Most IRAs Funded by an Employer-Sponsored Retirement Plan
Excerpt: "In a new report, the Investment Company Institute (ICI) says that the most recent available data show that households transferred more than $200 billion from employer-sponsored retirement plans to IRAs in 2004. In fact, the ICI notes that in 2008, nearly 20 million U.S. households - 52% of all U.S. households owning traditional IRAs - had traditional IRAs that included rollover assets." (PLANSPONSOR.com; free registration required)
Retirement Saving Outside of Your Company 401(k) Plan
Excerpt: "You know that now's a great time to invest and save for your future. But with so many choices, you may have trouble deciding which one will make the most difference in the long run. With employer 401(k) plans, tax-deferred annuities, and more types of accounts with 'IRA' in their names than you know what to do with -- well, it can get intimidating fast.To narrow things down, let's focus on just one decision: picking between a traditional IRA and a Roth IRA. In comparing these two methods for saving for retirement, you'll find a number of differences that could make one a lot more beneficial than the other." (The Motley Fool)
Changes in Estate Planning: This Year Will See a $3.5 Million Exemption and Lower Estate Values
Excerpt: "The same $3.5 million exemption applies to the Generation Skipping Transfer (GST) tax, which makes the stretch IRA more powerful. Beginning in 2009, we can leave more of our IRA or Roth IRA, free of any GST tax, to grandchildren. Their longer life expectancies will allow the IRA to grow tax-deferred or even tax free (with a Roth IRA) for greater wealth build-up, over time, in stretch IRAs." (Investment News; free registration required)
The No-Cost Way to Fix Flawed 401(k)s
Excerpt: "We already have a perfectly good retirement account available for investors. The IRA gives you an immediate tax deduction and the prospect of tax-deferred growth. It also offers complete investment flexibility, as you can open an IRA with nearly any stock, bond, ETF, or mutual fund you can think of, as well as some other types of investments as well. So, what's the problem? Well, the amount you can contribute to an IRA is quite low compared to a 401(k): $5,000 for an IRA versus $16,500 for 401(k) contributions in 2009. But a simple solution might include . . . ." (The Motley Fool)
A More Sophisticated Look at the Benefits of Roth Contributions
Excerpt: "Greg Matthews of Matthews Benefit Group, Inc., (St. Petersburg, Florida), analyzes the question of whether it is better to save in a Roth versus saving in a regular IRA or 401(k)." (Small Business Council of America)
[Official Guidance] Text of IRS Notice 2009-09: Reporting by Financial Institutions of Required Minimum Distributions for 2009 (PDF)
Excerpt: "Issuers of the 2008 Form 5498, IRA Contribution Information, should not put a check in Box 11. However, in recognition of the short amount of time to make programming changes, if a financial institution issues a 2008 Form 5498 with a check in Box 11, the IRS will not consider such form issued incorrectly solely because of the check in Box 11, provided the IRA owner is notified by the financial institution no later than March 31, 2009, that no RMD is required for 2009." (Internal Revenue Service)
[Guidance Overview] Sample Tax Opinion Regarding How to Transfer an IRA Out of a Trust
Excerpt: "Notice to Executors and Trustees: Here is how to transfer an inherited IRA that is payable to the estate (or trust) OUT of the estate (or trust) to the estate (or trust) beneficiary(ies), WITHOUT having a distribution of the entire account." (Natalie B. Choate)
Lump-Sum Distributions at Job Change (PDF)
12 pages. Excerpt: "This article uses 2006 data (the latest available) from the Census Bureau's Survey of Income and Program Participation (SIPP) to analyze the decisions made by workers at job change when they receive a lump-sum payment from an employment-based retirement plan." (Employee Benefit Research Institute)
A Sweet Deal on Roth IRA Conversions
Excerpt: "Employees who make (or who have made) after-tax contributions to their employer's retirement plan, listen up. You can now take that money and convert it to a Roth IRA tax free. . . . Not all retirement plans allow after-tax contributions. But if yours is among those that do, this is a great way to keep some of your retirement savings growing tax free without paying the usual price of admission to convert to a Roth IRA." (Kiplinger's Personal Finance via The Washington Post; free registration required)
New Law Suspends IRA Withdrawals in 2009: Here's How the Rules Will Work
Excerpt: "Retirees who ignore the annual distributions they are required to take from their individual retirement accounts usually run a big risk -- in the form of a 50% excise tax on the amount they should have withdrawn. But not next year. [President] Bush signed legislation that suspends the rule requiring older Americans to take withdrawals from tax-deferred retirement accounts, such as traditional IRAs and 401(k)s. But there are hitches. The suspension lasts for just one year, 2009. And while intended to give beaten-down retirement accounts time to rebound, the new law may also present confusion, particularly for those just starting to take required withdrawals. . . . Here are answers to questions about how the new law will affect taxpayers in 2009 and beyond." (The Wall Street Journal)
Moving to a Roth IRA in a Bear Market
Excerpt: "Shell-shocked by the stock market's recent collapse, many of your clients may not be in the mood to talk about much except the weather, let alone the advantages of reengineering their IRAs. But you may want to push them to have this talk. Experts say that the turn in the market presents new opportunities for investors. Outside of tax-loss harvesting, converting an ordinary IRA into a Roth IRA may be one of the few ways for an investor to profit from this year's miserable performance." (On Wall Street)
When You Retire, Where Should Your 401(k) Money Go? Here's How to Make That Decision
Excerpt: "[A]dvisers urge investors to do their homework before making a rollover decision: Analyze the range of offerings in your 401(k) plan, envision when and for what reason you might tap your retirement savings and examine the tax consequences of both options, paying special attention to what happens if funds are rolled over incorrectly. For some retirement savers, it may be the first time they have given any significant thought to these kinds of issues." (The Wall Street Journal)
The IRA - Tax Benefit or Tax Nightmare?
Excerpt: "The stretching of the tax deferment is not difficult. You must simply designate a beneficiary to your IRA account. The younger the beneficiary, the longer the tax deferred compounding. This beneficiary form should be reviewed periodically, and updated as necessary. The reality is that most people do not name a beneficiary and lose this very valuable planning tool. If you have significant assets in retirement accounts, please consider reviewing and updating your beneficiary form. This can be the difference between making your grandchildren or Uncle Sam wealthy." (The Boston Globe)
2009 Policy Resources from EBRI: Facts on Benefits Issues
Excerpt: "Health and retirement issues were prominent in the 2008 election and will be addressed by the new administration and Congress in 2009. To help provide a factual basis of reference for reporters and others involved in these campaign issues, EBRI is providing the following questions and answers about major employee health and retirement benefits. Hotlinks to relevant tables and charts of data are provided at the end of each answer." (Employee Benefit Research Institute)
[Official Guidance] Text of 'Applicable Federal Rates' Under Tax Code Section 1274(d) for December (PDF)
4 pages. The annual mid-term applicable federal interest rate under Code section 1274(d) for December 2008 is 2.85 percent. It is used when calculating 'substantially equal periodic payments' that are exempt from the Code section 72(t) early distribution penalty. (Internal Revenue Service)
[Guidance Overview] Video: Rules for IRA Rollovers and Transfers
5 minutes. (Wolters Kluwer)
Tax Policy Related to Compensation and Benefits in the New World
Excerpt: "[T]he current economic climate will make tax increases and spending cuts in the near term more difficult and, perhaps, less advisable. The new administration and Congress will hesitate in taking any action that can be seen as further suppressing economic activity. In addition, they may wish to undertake new spending to stimulate the economy and will find that safety-net spending by the federal government for unemployment and other benefits rises automatically as the economy weakens." (Deloitte via BenefitsLink.com)
New Savings Plan Could Help Millions
Excerpt: "Here's how [the Automatic IRA] would work: Companies with more than 10 employees that have no retirement plan and have been in business for more than two years would be mandated to offer a payroll-deduction saving option -- similar to the way employers deduct for taxes. Employees would be enrolled automatically when they are hired, unless they choose to opt out." (The Columbus Dispatch)
[Opinion] The Question of Hardship Reductions of Nest Eggs
Excerpt: "Presidential candidates John McCain and Barack Obama have proposed to let cash-strapped Americans forgo penalties for early withdrawals from their 401(k)'s and IRAs. For older participants, they've also proposed a temporary relaxation of the requirement that people must make annual withdrawals from their IRAs and 401(k)'s beginning at the age of 70½. These are not break-the-budget proposals, but, hey, the budget's already broken, so that's not even much of an issue these days. No, the issue here boils down to whether giving individuals the right to make their own financial choices leads to good decisions. And if the answer is no, should the government step in?" (U.S. News & World Report)
Individual Retirement Accounts and 401(k) Plans: Early Withdrawals and Required Distributions, Updated Oct. 27, 2008 (PDF)
19 pages. Excerpt: "This CRS Report summarizes the provisions of law that govern the taxes applicable to pre-retirement distributions from retirement accounts, and the situations in which distributions must be taken from a plan in order to avoid a tax penalty." (U.S. Congressional Research Service via American Benefits Council)
[Guidance Overview] CRS Report for Congress on Individual Retirement Accounts and 401(k) Plans: Early Withdrawals and Required Distributions (PDF)
19 pages. Excerpt: "This CRS Report summarizes the provisions of law that govern the taxes applicable to pre-retirement distributions from retirement accounts, and the situations in which distributions must be taken from a plan in order to avoid a tax penalty." (Congressional Research Service, U.S. Library of Congress)
Investors Stick With 401(k)s and IRAs
Excerpt: "Despite the recent daily thousand-point swings in the Dow Jones Industrial Average and the understandable uncertainty among investors, Individual Retirement Accounts and 401(k) plans still remain American's dominant and trusted retirement vehicles. That trend is expected to continue as retirement plans automatically enroll participants into qualified default investment alternatives like target-date funds, and investors continue to buy into the notion of the rewards of long-term holdings." (Money Management Executive via On Wall Street)
Are IRAs Safe?
Excerpt: "Given the numbing drumbeat of bad news, even the coolest clients with IRAs at a bank might be concerned about their retirement accounts. The good news: Retirement accounts are federally insured up to $250,000 per bank. Congress raised the limit from $100,000 in 2006. The $250,000 limit for federal deposit protection applies to retirement accounts at banks and savings associations insured by the FDIC, as well as credit unions insured by the National Credit Union Administration (NCUA). (For non-retirement accounts, the FDIC or NCUA limit temporarily increased to $250,000 from $100,000 as part of the 2008 Economic Stabilization Act, effective Oct. 3.)" (Financial Planning)
[Official Guidance] Text of IRS Notice 2008-102: Pension Plan Limitations for 2009 (Same as October 16 IRS News Release) (PDF)
Appears to be word-for-word identical to the IRS News Release IR-2008-18 of October 16, 2008, which sets for various cost-of-living-adjusted pension plan limitations for 2009. Scheduled for publication in Internal Revenue Bulletin 2008-45, to be dated November 10, 2008. (Internal Revenue Service)
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