BruceM

Related question to this. I'm retired now but like to read and keep up with changes. During my working years as a financial planner, I don't think I ever saw or even read of a COLA adjusted private defined benefit plan where the COLA wasn't paid for thru a reduced benefit. I've only ever seen government plans providing annual COLA adjustments. Judging by this discussion it would seem they are allowed, but I'd image the reason many/most such plans do not offer it is due to the greater annual funding requirement. If so, are there many such private DBPs out there that provide fixed or variable COLAs. Thanks so much for any responses.

Providing the plan allows it, a rollover of her TIRA into the 401(k) and she's not a 5% owner, will indeed defer RMDs. But is this in her best interest? Assuming her future retirement year will be at age 79, the calculations would be to do a present value of projected tax cash flows from alternatives such as - Doing Roth conversions up to the top of her current marginal tax rate until RMDs will be due for her at age 73, and then the tax on her RMDs at the margin - Leaving the TIRA until RMDs begin at age 73 without Roth conversions - Transferring her TIRA into her the 401(k) and deferring RMDs until age 79 The tail-end of each analysis would include the cash flows from beneficiaries who inherit her TIRA over their 10 year withdrawal period

Not sure if this will help, be a reminder to the client that holding a security of a given company does not effect that company's profitability. Buying their products or services does that. The election to hold or avoid a company securities tends to be psychological, which is indeed real, but it is not material.

Corrected to days

When I am infrequently asked this question, I use my TI-BAII Plus and add 181 days to the client's 59th birthday to give the earliest possible date to avoid the 10% early withdrawal penalty. So for example, 59th birthday is March 22, 2023. Go to calculator's 2ND/1 (DATE function). Enter this date as 03.2264 in DT1=. Then arrow down twice to DBD (days between dates) and type 183 and ENTER. Then arrow up once to DT2 and hit CPT (compute). It comes up with TUE = 9-21-2023

Agree with Gilmore. It seems many of the new provisions of SECURE 2.0 as relate to the young are making it easier to extract from one's retirement savings. I'm not saying there are not valid reasons for doing so, but the trade off is reducing life savings. Compounding returns over long periods, as we all know, is the secret....if there is a secret....to meeting retirement savings goals. Perhaps short term tax revenues and political favoritism trump long term savings?

Thanks for the many thoughtful responses. This is a very unusual case. A bit more info might help understand it. Seems the son as a parent left his 4 year old with grandparents (his father), who it was found later had abused the 4 year old while the grandfather was drunk. The son (father of the 4 year old) as can be imagined, became furious and disowned his father. This is a horrible situation but it does help explain the son's behavior. My advice to my friend is as suggested by FPGuy....simply make a withdrawal, withhold enough to cover his (beneficiary son) tax on the withdrawal and donate the remainder to a charitable organization such as Prevent Child Abuse America. If the son finds he can't do the request for withdrawal I suggest the sister stand in to help actually do it. And very interesting discussion on escheatment. Much thanks.

Came across one of the more strange cases I've ever heard of. Seems an elder widower died 3 years ago naming his son as 50% beneficiary of his TIRA. His inherited portion is small at under $5,000. Seems son and father were not talking and son said he'd take nothing from his father, including the IRA. So the IRA is sitting at the custodian, who has notified son but son has ignored them and said he'd burn any check he's sent for the IRA balance (his sister transferred her part out shortly after death). No RMDs have been taken. What will eventually happen to the son's portion of the IRA? Will it... Be transferred to a taxable account in the son's name by the custodian and a 1099-R sent to the son for the year? Eventually undergo the escheatment process and be transferred to the state with a 1099-R going to the son? Escheatment and no 1099-R, it just goes away? Eventually the IRS will require son pay 50% underwithdrawal penalties?

Most immigrants who reside in this country illegally are fully documented, with such documents as the I-571, I-327, I-551 and so on. They are simply in violation of the terms of the document. Only those who crossed the border without processing through any US Government authority are undocumented. And I have no idea if holding or not holding an alien immigration document, current or expired, makes any difference in the application for an ITIN I would guess not. If and until there are strict and enforced penalties to employers who knowingly hire those immigrants here illegally, I suspect this will continue as a common problem. I doubt the current administration has any interest in enforcing such employer-mandated immigration laws.

I'm retired and so this does not involve my present client experience, but I am reading quite a bit these days on ESG investing and this apparent growing interest by employees and other clients. For this I've got a couple of questions others may be able to address. 1. Holding or not holding a stock or fund holding that stock has nothing to do with the ability of the company to be profitable, yet I never see this addressed in the articles I'm reading on ESG qualifying stocks. I can certainly understand that there may be 'feel-good' component to this on the part of the client and perhaps some virtue signaling. But it would seem logical to me that in the client discussion would be a paragraph on how ownership/non-ownership does not affect the company's performance and instead, the buying of the company's products/services does this. 2. What constitutes an ESG qualifying company? Other than broad qualitative factors, what would an IA use as quantifiable selection criteria if individual stocks were used rather than ESG funds? Thanks for any information on this

I've checked my sources and can find nothing definitive. But TR 1.408-8(A-5)(a) and IRC section 401(a)(9)(A)] make clear that when a spouse is named sole beneficiary on deceased spouse IRA and makes the election to roll over the IRA into his/her own, the funds are intermingled and so fall under the rules effecting the surviving spouse. It would seem logical that an IRA or ERISA plan directed by the divorce decree to the spouse, that once the assets are in the divorced spouse's IRA, they will fall under rules affecting that spouse meaning the divorcee's holding period receiving the rollover would apply. Similarly, the 5 year holding period on the Roth component of a 401(k) Roth will reset to whatever the holding period is on the Roth IRA it is rolled into, not the holding period of the 401(k)-Roth.

Good discussion. A couple of questions.... If she does the rollover while working, retires (separates from service) that year and does not correct the excess contribution by the RBD, wouldn't she also be subject to the 50% penalty on the nondistributed RMD? And aren't there several employer plan distributions that could occur prior to the RMD...such as distributions on account of a QDRO, loan payment or advisory fees? I've always assumed the 'RMD First' in relation to elective rollovers or Roth conversions.