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Life on the other side - my humble opinion God was kind enough to erase almost all pension knowledge from my mind. Had quit work a couple years ago to take care of mom (she died a few months ago at age 96) Might not have a lot of cash, but enough to get by, I get to daily Mass (except for a few months of covid closure) and wouldn't have it any other way. It is simply so fantastic to be able to get up and pray with others, play the psaltery once and a while, etc. Wouldn't trade it for anything in the world.

Because I posted Jokes like this...... Most people don't know that back in 1912, Hellmann's mayonnaise was manufactured in England. In fact, the Titanic was carrying 12,000 jars of the condiment scheduled for delivery in Vera Cruz, Mexico, which was to be the next port of call for the great ship after its stop in New York. This would have been the largest single shipment of mayonnaise ever delivered to Mexico. But as we know, the great ship did not make it to New York. The ship hit an iceberg and sank, and the cargo was forever lost. The people of Mexico, who were crazy about mayonnaise, and were eagerly awaiting its delivery, were disconsolate at the loss. Their anguish was so great, that they declared a National Day of Mourning, which they still observe to this day. The National Day of Mourning occurs each year on May 5th and is known, of course, as Sinko de Mayo.

$45,000 all around (aggregate the two apples in one sauce). If the $50,000 was W-2 from S or C-corp, and $5,000 loss from a sole prop, then (although there is no clear guidance) the thought is you don't cross the streams and you're looking at $50k for comp. I garnered this from an excellent ASPPA webcast on earned income given by Darrin Watson.

The deadline to comply with the Cycle 3 restatement mandate is July 31, 2022 so my understanding is that as long as the assets are distributed prior to July 31, 2022, the restatement is not required.

Is this one business or two? If it's one, she's not treating it as one. If it is one, then why does she have an LLC taxed as a corporation but reports on a Schedule C? If it is two businesses, then the Schedule C could be an adopting employer and they could be eligible earnings.

So sorry to hear about your mom, Tom -- but delighted to hear that you're doing well. "Erasing all pension knowledge" sound like nirvana (although we do miss your contributions here). So good to hear from you -- be well!

I'm assuming that was thinly veiled sarcasm by Bob. Heck, I just got yelled at by an advisor because I told the client that their 32% investment return for 2020 was too high and can have significant consequences in the future. The communication was probably there and ignored.

In a perfect world this is where your client's CPA would make an appearance.

I can't cite anything but we have done what you suggest in your first comment. We have set up an after-tax IRA at Millennium Trust Company for that kind of fact pattern. It is that or escheat it to the state which is grey at best also.

That's idiotic, but thanks for posting.

The following quote comes from an IRS publication explaining and providing examples of plan corrections. I have emphasized the sections that directly addresse your question, since the rest of the example is a tad bit complex: On January 1, 2010 Jane, an NHCE became eligible to participate in the Vinco 401(k) Plan, a calendar year plan. However, Jane was not given the opportunity to make elective deferrals until April 1, 2010. Jane elected to defer 25% of her $80,000 2010 plan compensation. In 2010 the ADP for the NHCE group was 8%. Vinco made a 10% matching contribution on deferrals up to a maximum of $1,600. During the period from April 1, 2010 through December 31, 2010 Jane deferred 25% x 60,000, or $15,000. Her deemed deferral for the 3 month period of exclusion, on which the corrective matching contribution is calculated, is 8% x $20,000 or $1,600. However, the 402(g) limit for 2010 is $16,500. Thus, only $1,500 of the deemed deferred amount for the brief period of exclusion is used to compute the corrective matching contribution. The 10% match for the portion of the year when Jane was allowed to make elective deferrals (April 1-December 31) totaled $1,500. The 10% match on the $1,500 deemed deferral (taking into account the 402(g) limits) for the period of exclusion is $150. However, the plan provides a $1,600 cap on matching contributions. Thus, Vinco is only required to make a $100 corrective matching contribution, together with earnings. Based on my previous understanding, which (oddly enough) seems to be supported by this example provided by the IRS, I would say that the corrective matching contribution (not NEC) associated with the missed deferral opportunity would be combined with the other matching contributions allocated to the participant for the same plan year and that sum would be subject to the $2,000 plan limit. So, for example, assume your participant received $1,800 in employer match due to deferrals he made in the period when he was given the opportunity to defer AND your correction calculation indicates that a corrective matching contribution of $450 is due to the participant based on the period during which he did not have an opportunity to defer, then the corrective match would be reduced to $200 to keep the total match at the $2,000 plan limit. If you would like a copy of the IRS publication I am referring to, let me know and I will get it to you.

Appleby - Thank you for the reminder of that funky rule! I knew that at one point but, due to a supply shortage, the neurons that stored that bit of knowledge must have been reused for something else. TPApril - sorry for my "half" answer!

Everyone has different goals and financial situations. I'm not sure a blanket statement about when to retire or electing when to receive SS works for everyone.

Here is a basic SHM spreadsheet I came with a while ago. Feel free to use it. No warranties or guarantees of any kind implied or given. Though, if you look at the examples in there, the calculations fur under 3%, between 3-5% and over 5% come out correct. Safe Harbor Match Calc.xlsx

The monthly increases to age 70 are based on when you start your benefit, not when you stop working. Prompt distribution of the 401(k) plan account could help the individual wait to start receiving soc sec benefits. As Mike said, there are a lot of variables. Certainly, if an individual has less than 35 years of earnings, they should think hard about whether they should continue to work. Basically, anyone in his/her 60's should establish their soc sec account online and look at their earnings history and think through some "what-ifs."

Question withdrawn. I was given incorrect information by the person who asked the question. In fact, a refund was processed for 2019 and one is in progress for 2020 as well.

Just because somebody "retires" doesn't mean they will start Social Security. Besides, the decision to retire at any age is subject to so many individual data points there is absolutely no way you can state that it doesn't make sense. You just don't know.

My guess is that the 999 was meant as a placeholder by whoever programmed the website. I would be very surprised if 999 turned out to be an accurate number.

That's a tough call. First of all, the employee may no longer by HSA-eligible. That would definitely eliminate the option if it were the case. Even if the employee is still HSA-eligible, the extra contribution will run the risk of creating excess contributions based on how long the employee remains HSA-eligible this year (proportional limit), whether the employee had set elections to reach the maximum contribution limit (statutory limit), etc. But ultimately if the employee is still HSA-eligible and approves the contribution being deposited as a 2021 amount with the understanding of the limits, that probably is the best approach. The employer should consider some form of a missed earnings adjustment to compensate for the time lost. Otherwise, the only reasonable approach would be to refund the contribution (potentially with an interest adjustment) as standard taxable income. The employee could then choose to use the additional compensation to elect a higher pre-tax HSA contribution--which would essentially create an equivalent result. If the employee is no longer HSA-eligible, the employer should consider a gross up. Note that the employer probably has an issue with the 2019 Form W-2 (Box 12, Code W) in this situation that would also technically need correction.