A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Pinnacle Retirement Group, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Pinnacle Retirement Group
(610) 707-9170

CLOSE

 

BACKDOOR ROTH IRA CONVERSIONS AND THE ANNUAL RMD REQUIREMENT: TODAY’S SLOTT REPORT MAILBAG

By Ian Berger, JD
IRA Analyst
Follow Us on X: @theslottreport

 

Question:

Is it possible to do a Backdoor Roth IRA conversion with a SEP IRA? If yes, how does it work?

Thank you!

Yulia

Answer:

Hi Yulia,

Yes, you can do a Backdoor Roth IRA conversion with a SEP IRA. You would simply contact the IRA custodian and request the conversion. If the SEP IRA is pre-tax and you have no after-tax IRA funds, then the converted amount is fully taxable in the year of conversion. If you do have after-tax funds, a portion of the conversion is tax-free under the pro-rata rule.

Question:

My mother was taking required minimum distributions (RMDs) until she passed in 2023. Her three children are the beneficiaries of her IRA. Do the children have to take annual RMDs, or can they take distributions anytime during the 10-year period as long as all monies are removed before 10 years? I have gotten several answers on this.

Answer:

These rules are confusing, so we’re not surprised you’ve gotten conflicting answers. The IRS has said that beneficiaries subject to the 10-year payout rule (like you and your siblings) must take annual RMDs during the 10-year period if the IRA owner died after starting RMDs. Because this rule surprised and confused many people, the IRS waived RMDs for 2021-2023 for beneficiaries in this situation. It’s possible the IRS will do that again for 2024, so you and your siblings should wait until later this year before taking the 2024 RMD to see if it is waived.

https://www.irahelp.com/slottreport/backdoor-roth-ira-conversions-and-annual-rmd-requirement-today%E2%80%99s-slott-report-mailbag

Ready To Take

THE NEXT STEP?

For more information about any of our products and services, schedule a meeting today.

Or give us a call at (561) 629-7820