
Market Review and Outlook

7 steps to prepare for your upcoming retirement
1. Make sure you’re diversified and investing for growth
2. Take full advantage of retirement accounts, especially catch-up contributions
3. Downsize your debt
4. Calculate your likely retirement income
The rate at which retirees can prudently spend or draw down their investments in retirement and have them last their lifetime depends on age and risk tolerance. Adhering to these rates will allow retirees to be 90% certain of not exhausting their wealth.Footnote 3 | |
Retirement age | Systematic withdrawal rates |
---|---|
60 | 3.59% |
65 | 3.87% |
70 | 4.19% |
75 | 4.64% |
Source: Anil Suri, Nevenka Vrdoljak, Yong Liu and Cristian Homescu, “Determining sustainable retiree spending rates: Beyond the 4% rule,” Chief Investment Office, January 2025. |
- Postponing your retirement date and working longer
- Reducing your discretionary expenses
- Deferring Social Security payments (each year you delay after your full retirement age, your monthly benefits grow by 8%, until age 70)
5. Estimate your retirement expenses
6. Consider future medical costs
7. Plan where you will live
It’s never too late to get started
Required Minimum Distributions and IRA Transfers: Today’s Slott Report Mailbag
By Sarah Brenner, JD
Director of Retirement Education
Question:
Can I satisfy my required minimum distribution (RMD) from my 401(k) by taking it from my IRA instead?
Answer:
No, that is not allowed. You may aggregate RMDs from your IRAs if you have multiple accounts, but you are not permitted to aggregate your IRA and 401(k) RMDs. You will need to take your 401(k) RMD from that plan.
Question:
I have multiple IRAs. Do I have to take the total RMD from these accounts before I do an IRA transfer, as opposed to a rollover?
-Dave
Answer:
Hi Dave,
You must take all of your IRA RMDs prior to completing a 60-day rollover or a Roth conversion. However, the rules are different for transfers. If you are doing a direct transfer between IRAs, there is no requirement that the RMD must be taken prior to the transfer. You can wait until later in the year but just be sure you remember to take it.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/required-minimum-distributions-and-ira-transfers-todays-slott-report-mailbag/
Reporting a Recharacterization
By Andy Ives, CFP®, AIF®
IRA Analyst
While the ability to recharacterize Roth conversions was eliminated years ago, Roth contributions can still be reversed. A Roth IRA contribution can be recharacterized to a traditional IRA, or vice versa. To recharacterize an IRA contribution, the IRA custodian will transfer the funds, along with the earnings or loss attributable (“net income attributable” or NIA), from the first IRA to the second IRA. The IRA custodian may be willing to calculate the NIA, or that responsibility could fall on the IRA owner.
NIA must be determined by a special IRS formula, which is the same formula used to determine NIA when removing an excess IRA contribution. IRS Publication 590-A includes a worksheet titled “Determining the Amount of Net Income Due to an IRA Contribution and Total Amount to Be Recharacterized.” The inputs needed for the worksheet include the amount of the contribution, the fair market value (FMV) of the IRA immediately prior to the contribution being made, and the FMV immediately before the recharacterization. (Note that NIA is not specific to the investment where the soon-to-be-recharacterized contribution was made, but it is rather based on the overall performance of the entire IRA.)
The deadline for recharacterization is October 15 of the year following the year for which the contribution was made. The recharacterized contribution is treated as if it had always been made to the intended IRA. While recharacterization is a tax-free transaction, both IRAs report the transactions to the account owner and the IRS. How so?
A recharacterized contribution will generate both a 1099-R and a Form 5498. The first IRA will report the recharacterized amount, plus NIA, as a distribution on Form 1099-R. The second IRA (the receiving IRA) will generate a Form 5498. On the 1099-R, both the recharacterized contribution amount and the NIA (i.e., the current FMV of the recharacterized amount) are reported in Box 1, Gross distribution, with “0” in Box 2a, Taxable amount. The distribution code will be either an “N” or “R.” The Form 1099-R instructions read as follows:
“N – Recharacterized IRA contribution made for 2025. Use Code N for a recharacterization of an IRA contribution made for 2025 and recharacterized in 2025 to another type of IRA by a trustee-to-trustee transfer or with the same trustee.”
“R – Recharacterized IRA contribution made for 2024 or a previous year. Use Code R for a recharacterization of an IRA contribution made for 2024 and recharacterized in 2025 to another type of IRA by a trustee-to-trustee transfer or with the same trustee.”
Form 5498 will report the total amount being recharacterized in Box 4, Recharacterized contributions. Be sure that if you recharacterize an unwanted traditional IRA contribution to a Roth IRA, you are otherwise eligible to contribute to a Roth IRA (i.e., You are not over the Roth IRA contribution phase-out limits.).
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/reporting-a-recharacterization/
Roth IRA vs. Roth 401(k): Which Is Better?
By Ian Berger, JD
IRA Analyst
Many of you are familiar with the tax advantages that Roth retirement accounts can bring. Although Roth contributions are made with after-tax dollars, the contributions grow tax-free, and earnings also come out tax-free after age 59½ if a five-year holding period has been satisfied.
A recent survey by the Plan Sponsor Council of America showed that 93% of 401(k) plans offer employees the option of making Roth 401(k) salary deferrals. Let’s say your plan allows Roth contributions, but you don’t have the funds to maximize both those contributions and Roth IRA contributions. Which one should you contribute to? It turns out that each option has its own advantages.
Here are the reasons why Roth IRAs are more attractive than Roth 401(k)s:
- Roth IRAs offer unlimited investment choices, but Roth 401(k)s are limited to whatever investment options the plan offers.
- You usually can’t withdraw your Roth 401(k) account until you turn age 59½ (or leave your job). By contrast, Roth IRAs are always available (although earnings may be taxable and subject to penalty).
- The rules for determining whether a Roth distribution is a “qualified distribution” (that is, whether earnings come out tax-free) is easier to satisfy for Roth IRAs than it is for Roth 401(k)s. For Roth IRAs, the five-year holding period begins with the first contribution or conversion to any Roth IRA. For Roth 401(k)s, the five-year period begins with the first contributions to that particular 401(k) plan.
- Roth IRA distributions that don’t meet the conditions for a “qualified distribution” are subject to favorable ordering rules allowing you to withdraw all of your tax-free contributions and conversions before your taxable earnings. On the other hand, Roth 401(k) distributions that are not qualified must meet a pro-rata rule that causes a part of the distribution to be taxable.
- Before 2024, Roth IRAs had an advantage over Roth 401(k)s when it came to lifetime required minimum distributions (RMDs). Roth IRA owners have never been required to take RMDs, but up until 2024, Roth 401(k) owners were required to take them. Now, neither is subject to lifetime RMDs.
On the other side of the coin, Roth 401(k)s may be a better option for the following reasons:
- Roth 401(k) funds may offer you more protection from creditors than Roth IRAs if you wind up on the losing end of a lawsuit. If the Roth 401(k) is part of an ERISA plan, you have an unlimited shield from creditors’ claims. By contrast, Roth IRAs only give you the creditor protection available in the state where you live. State law can provide less protection than ERISA does.
- Most plans allow employees to borrow against their Roth contributions, but Roth IRA owners are not allowed to take loans against those funds.
- Many 401(k) plans will match Roth 401(k) employee contributions, but your custodian won’t match your Roth IRA.
- Unlike Roth IRA contributions, Roth 401(k) contributions are not subject to annual income limits (although the plan may restrict contributions made by highly-paid employees).
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/roth-ira-vs-roth-401k-which-is-better/

Weekly Market Commentary
The S&P 500 and NASDAQ reached another set of all-time highs, driven by constructive rhetoric on global trade and positive second-quarter earnings results from influential companies such as Alphabet. The S&P is up 8.6% year to date, while the NASDAQ is up 9.3% for the year.
A trade deal was announced with Japan that imposes a 15% tariff on Japanese goods and allows US rice and autos to be exported into Japan. The deal also includes a $550 billion direct investment from Japan into US infrastructure and manufacturing capabilities. Notably, there are still several details to work out, especially related to the direct investment, but the news helped propel the US and Japanese markets higher. A meeting is scheduled for President Trump to meet with Ursula von der Leyen, the President of the European Commission, on Sunday to discuss US and EU trade levies. Currently, the US is poised to place a 30% tariff on EU goods, but it has been reported that these could be reduced to 15% to 20%. If an accord cannot be reached, the EU has created reciprocal tariffs on US goods to the tune of $100 billion. Of note, the EU left its monetary policy rate unchanged in last week’s meeting. Treasury Secretary Bessent and Chinese trade authorities also sent a positive vibe on trade negotiations. Bessent pushed back against the idea of a hard deadline of August 12th, stating that these negotiations would be ongoing and could last for several months.
About a third of the S&P 500 have reported second-quarter earnings results, and while results have been mixed on an aggregate basis, they have been better than expected. That said, according to FactSet, if the results remain the same as they are now for the rest of the companies set to report earnings per share, growth of 6.4% will be the lowest since the first quarter of 2024. Interestingly, revenue growth has been better than expected, and the street now expects calendar year 2025 revenue growth of 9.6%. Earnings highlights this week included solid results from Google, which increased its capital expenditures (cap-ex) estimates by $10 billion to $89 billion for 2025, sending a message that it is not backing down from the build-out of its artificial intelligence initiatives. Verizon and GE Vernova also produced stellar reports. On the other hand, Chipotle Mexican Grill missed the mark, causing its shares to tumble. Earnings guidance from Texas Instruments and IBM was tempered, causing significant declines in their share prices. Stay tuned, as 34% of the S&P 500 is scheduled to report in the upcoming week, which includes nine Dow components and Microsoft and Amazon.
The S&P 500 gained 1.5%, the Dow rose 1.3%, the NASDAQ added 1%, and the Russell 2000 advanced by 0.9%. The US yield curve flattened over the week asshorter-term tenured paper yields increased, while longer-term tenured yields decreased. The 2-year yield increased by four basis points to 3.92%, while the10-year yield fell by four basis points to close at 4.39%. Oil prices fell by $0.86 or 1.3% to close the week at $65.17 a barrel. Gold prices fell by $22.60 to $3335.70 an ounce. Copper’s price continued its surge, jumping 3.2% to close at $5.79 per pound. Bitcoin was little changed over the week but did see a significant selloff on Friday before recovering on Saturday. Bitcoin is currently trading at $118,133. The US Dollar index fell by 0.8% and closed the week at 97.69.
The economic calendar was relatively quiet, but it will pickup in the coming week with the release of important inflation and payrolls data. Leading Indicators were lower than expected at -0.3%. Existing Home Sales and New Home Sales were also lower than expected, even as Mortgage Applications increased over the prior week. Initial Jobless Claims fell by 4k to 217k, while Continuing Claims increased by 4k to1955k. A preliminary look at July’s S&P Global Manufacturing fell back into contraction at 49.5, while the Services PMI figure increased to 55.2 from June’s level of 52.9. Durable Goods orders fell by 9.3, which was a smaller decline than expected. The Ex-auto figure increased by 0.2% versus an estimated decrease of 0.2%.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

Getting Ready for Retirement Checklist
If the word “retire” is becoming your new mantra, we suggest you make a retirement checklist before you receive your last paycheck. It’s never too early (or too late) to start planning your retirement. So why not start now, using the handy checklist below.
10 Steps for Getting Ready for Retirement Checklist
Thinking about retirement? That means you’ve got a lot to prepare for, from money to health to hobbies to where you’ll retire. Yes, it can be overwhelming, but we can help. We’ve broken down the preparing for retirement process into 10 major areas, so you can take it one step at a time.
1. Determine How You’d Like to Spend Your Retirement
In leaving the work world, where you face constant deadlines and demands, do you want to flip a switch and simply relish some R&R in retirement? Or do you think being idle will quickly bore you? Some retirees actually embark on a second career! With more time on your hands, you can take up a new hobby or sport, or perfect one you already enjoy. At many colleges and universities, seniors can audit courses for free. Is there a cause you feel passionate about? If so, consider volunteering. And if you have grandchildren, you’ll be able to spend more time with them.
2. Consider Your Ideal Retirement Lifestyle
Throughout your career, you probably have had a certain amount of disposable income. That may change upon retirement, so consider how that will impact your lifestyle. Do you want to surround yourself with people? If so, communal living might be right for you. Always wanted to travel? Now’s your chance, even if you don’t stay in five-star resorts. A retirement community may help with some of your finances, by removing ongoing expenses such as home repair, taxes and home insurance, utilities, paying someone for lawn care and snow removal, etc.
3. Think About Your Current Health Needs
Your health insurance policy may be offered through your current employer, but you’ll likely be on your own once you retire. If you have any pending health needs, such as surgery, you may want to postpone retirement. What about medications? Physical therapy? Take into account all your health needs before making any retirement decisions.
4. Consider Your Long-term Healthcare Needs
Even if you’re in relatively good health now, you can’t take it for granted. Unfortunately, age is the main risk factor for many diseases. This is why considering future healthcare needs should always be a part of your retirement checklist. Medicare is available to individuals 65 and older, but it does not cover all health-related costs. Many people buy a “Medigap” policy to cover these costs, and the premiums can range anywhere from about $50 to $300 a month. So take that into account. If you move into a Continuing Care Retirement Community (CCRC), your healthcare needs should be covered – the community will provide more or less care as needed.
5. Estimate Retirement Expenses
Just because you’re retiring doesn’t mean you’ll stop having expenses. You should make a spreadsheet itemizing your expenses. Basic expenses include housing, food, transportation, healthcare and insurance. Other expenses include clothing, entertainment and donations.
6. Set a Retirement Budget and Work on Sticking to It
Using your expenses spreadsheet, add a column for income. This can include Social Security, retirement accounts, pensions, stocks, inheritance, annuities, part-time income and more. Then determine your budget by offsetting income with outlays. It’s easier than you think. The hard part will be sticking to it!
7. Look into Social Security, Medicare, and Other Retirement Benefits
You can get Social Security retirement benefits as early as age 62. However, your benefits will be reduced if you retire before your full retirement age. If you were born in 1951 or earlier, you’re already eligible for your full Social Security benefit. The full retirement age is 66 for those born between 1943 and 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For those born 1960 or later, full retirement benefits are payable at age 67. If you decide to keep working beyond full retirement age, your benefit will increase a certain percentage from the time you reach full retirement age until you start receiving benefits, or until you reach age 70. As noted above, anyone 65 or older is eligible for Medicare benefits.
According to the Internal Revenue Service, you can take distributions from your individual retirement account (including your SEP-IRA or SIMPLE-IRA) at any time. However, your distribution will be included in your taxable income and may be subject to a 10 percent additional tax if you’re younger than 59 1/2. At age 70 1/2, you must begin taking minimum annual distributions from your traditional 401(k) or IRA. You can calculate your required distribution using this worksheet.
8. Determine Where You Want to Live
Do you gravitate toward the beach? The mountains? The lake? The city? Suburbia? Your family? Think about where you’d like to settle, and then do your research. For more information, read Best States for Retirement.
9. Think About Downsizing and If It’s Right for You
A three- or four-bedroom home may have made sense when you were raising a family, but if you are retiring alone or with a partner, it may be time to downsize. Sure, you have many memories associated with a house you’ve lived in for years, but you also have many expenses and more property to clean and maintain. Even if your mortgage is paid off, there’s the cleaning, the upkeep, the insurance, the utilities. Plus, if your residence has stairs, you’ve got to think about how you’ll navigate them as you age.
10. Cut Back Your Spending as Soon as Possible
You may be in the habit of picking up a double-shot-half-caff-nonfat-soy-organic-caramel-extra-hot-with-foam-and-sweetener-blended every day on the way to work, but you’ll need to kick the caffeine habit (at least the pricey one) once you retire. Do you and your partner really need two vehicles? Same goes for your landline phone. What about all those cable channels? Are there times it makes sense to buy used goods? And don’t forget to take advantage of senior discounts!
There’s no need to procrastinate when it comes to getting ready for retirement. The more time you give yourself, the less stressed you can be about it, and the more you can look forward to this time you’ve yearned for and earned. If you plan wisely, and you’ll be able to make your retirement dreams a reality.
https://www.actsretirement.org/resources-advice/getting-ready-for-retirement-checklist/
The One Big Beautiful Bill Act (OBBBA) and SEP IRAs: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
Does the new $6,000 additional deduction for seniors under the One Big Beautiful Bill Act (OBBBA) also apply if the senior itemizes their taxes?
Thanks,
Robert
ANSWER:
Robert,
The new $6,000 addition to the standard deduction is for seniors aged 65 and older for years 2025-2028. This is per person, so a married couple could deduct up to $12,000 if each spouse is aged 65 or over. This is in addition to the regular standard deduction AND the extra deduction for those aged 65 or blind. This new deduction will also be available to seniors who itemize.
Note that the deduction phases out beginning with modified adjusted gross incomes of $75,000 for individuals and $150,000 for married filing jointly. It phases out completely at $175,000/$250,000, respectively.
QUESTION:
Hello,
I have a SEP-IRA annuity which was opened in 2011. I am age 74. I am considering doing a full conversion of the total SEP annuity balance to a Roth annuity, while keeping all of the particulars of the annuity policy the same. After paying the tax on that total conversion amount, do I have to wait 5 years after that conversion for the monies to become totally tax free? I have established a Roth already and I am over age 59½.
Duane
ANSWER:
Duane,
I am operating on the assumption that the Roth IRA you already established has been open for 5 years. Since you are over age 59½ AND you have already owned a Roth IRA for 5 years, then you never have to wait out another 5-year clock. Upon converting your SEP IRA annuity to a Roth IRA, any and all future earnings with be immediately available for withdrawal tax- and penalty-free. (Just be sure you take your required minimum distribution before doing the conversion.)
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/the-one-big-beautiful-bill-act-obbba-and-sep-iras-todays-slott-report-mailbag/
Trump Accounts – A Hot New Bombshell Enters the Tax-Advantaged Account Villa
By Sarah Brenner, JD
Director of Retirement Education
Summer of 2025 brought us the new season of the hit TV show, Love Island. When a new contestant arrives on this popular reality dating show, its viewers know that “another hot bombshell has entered the villa.” The summer of 2025 has also brought us the One Big Beautiful Bill Act (OBBA) and, with the new law’s arrival, another hot bombshell enters the tax-advantaged account villa. Trump Accounts now join the ranks of the many ways Americans can save using individual accounts.
Tax Advantaged Accounts
There was a time when jobs offered pensions and health insurance with little or no out-of-pocket expenses. College tuition could be paid with earnings from a summer job. Those days are gone, and more and more Americans are finding themselves on their own to save and pay for things that previous generations were lucky enough to have at little to no cost.
Congress’s response has been to create tax advantaged accounts. These accounts can help those who can afford to make contributions, and there are now many different options available.
IRAs: Traditional IRAs are the original individual account. These retirement savings accounts offer a tax deduction for contributions for some and tax deferral of earnings for everyone. Anyone with taxable compensation can contribute to an IRA. There is no employer involvement needed.
Roth IRAs: Since 1997, Roth IRAs have offered an alternative to traditional IRAs for retirement savings. These accounts (which also require earned income to contribute) do not offer any tax deduction, but the trade-off is tax-free earnings in the future.
529 Plans: These are savings plans operated to make it easier to save for educational expenses. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary.
ESAs: Education Savings Accounts (ESAs) are also for saving for education. They are individual accounts, like IRAs, and can be used for a broad range of both K-12 and post-high school education expenses. Earnings are tax-free if used for education.
HSAs: For those with high-deductible health insurance, contributing to a Health Savings Accounts (HSAs) can help with health care expenses. Contributions to HSAs are deductible regardless of income level and any distributions used for qualified health expenses are tax-free.
ABLE Accounts: Achieving a Better Life Experience (ABLE) accounts allow eligible people with disabilities to save money in a tax-advantaged account without jeopardizing their eligibility for certain public benefits programs. Earnings in the account grow tax-deferred and are tax-free if used for qualified disability expenses.
Another hot bombshell has entered the villa! Trump Accounts: Effective July 4, 2026, parents and others can contribute up to a total of $5,000 per year on behalf of a child. Contributions by employers and nonprofits are also permitted. Accounts for babies born between January 1, 2025, and December 31, 2028, will be seeded with a one-time government contribution of $1,000. Earnings are tax-deferred until distribution.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/trump-accounts-a-hot-new-bombshell-enters-the-tax-advantaged-account-villa/
Last Week in Chicago
By Andy Ives, CFP®, AIF®
IRA Analyst
Last week in Chicago, the Ed Slott and Company team hosted another successful 2-day advisor training program. A sellout crowd of over 260 financial professionals from across the country joined us for some intense IRA and retirement plan education. Topics included all things Roth, net unrealized appreciation (NUA), naming trusts as IRA beneficiaries, the new qualified charitable distribution (QCD) 1099-R reporting codes, 10% penalty exception rules, creditor/bankruptcy protection rules, and the list goes on. Additionally, we clawed through the weeds of the One Big Beautiful Bill Act (OBBBA) and the sections of the law that impact Roth conversions. We also provided an overview of the new “Trump Accounts,” of which the finer details are still to be ironed out.
Between each session, participants were welcome to approach us and ask any questions they might have. As expected, inquiries continued at breakfast, lunch, in the elevator and through the lobby! This is complicated material. As presenters and hosts, we fully expect to get bombarded with questions. It is our pleasure to discuss targeted issues, ask probing questions, make recommendations, and send people down the proper path with a smile and a handshake. If it weren’t for the positive energy from each and every participant, seminars like this would not be nearly as enjoyable. Interestingly, some inquiries repeated themselves. Here are some of the more popular questions:
Do inherited Roth IRA beneficiaries have to take annual RMDs (required minimum distributions) or not? The answer is: It depends. If the Roth IRA beneficiary qualifies as an eligible designated beneficiary (EDB), then he has a choice. He can choose to take lifetime “stretch” RMDs based on his own single life expectancy, OR he can choose the 10-year payout rule. If he chooses the latter, there will be no annual RMDs in years 1 – 9 of the 10-year period, but the account will need to be emptied by the end of year ten.
What if a person turned age 73 this year, but died before taking her RMD? Does her IRA beneficiary still have to take the year-of-death RMD? In fact, there is no RMD to take. Since this person just turned age 73 in 2025 but then passed away, she never made it to her required beginning date (RBD), which was April 1, 2026. Since she did not make it to the RBD, then RMDs were never “turned on.” A person takes her first RMD in anticipation of making it to the RBD. But if that person dies prior to the RBD, then there is no year-of-death RMD to take.
Can you explain the pro-rata rule? The pro-rata conversation requires an example, so here is a link to a recent Slott Report pro-rata rule article: irahelp.com/pro-rata-not-double-tax.
Additional popular questions pertained to the tax reporting of Roth retirement plan matching contributions, RMD aggregation rules, and when IRA payouts to a trust beneficiary can be impacted by the high trust tax rates. It was our pleasure to answer every inquiry to the best of our ability. We look forward to the next 2-Day IRA Workshop, which will be held virtually on September 17 and 18 and in-person on February 12-13 in Las Vegas.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/last-week-in-chicago/

Weekly Market Commentary
U.S. equity markets were little changed for the week; that said, the S&P 500 and NASDAQ were able to forge another set of all-time highs.
A busy Q2 earnings calendar saw 12% of the S&P 500 report earnings. Earnings from several large banks came in better than expected, but despite the better results, many of the banks sold off after their earnings announcements. This may be an indication of what to expect for the rest of earnings season, given the extraordinary moves we have seen in equity markets. In the coming week, 112 S&P 500 companies are scheduled to announce earnings results.
Trade negotiations continue, but few deals have been announced. The EU is preparing retaliatory tariffs in response to Trump’s announcement of a 30% tariff on a broad basket of EU goods. Treasury Secretary Scott Bessent met with Japan’s Prime Minister Ishiba on Friday to discuss trade, but no deals were announced. Notably, Japan is holding elections this weekend, where it appears Ishiba’s LDP party faces a significant setback and a loss of its majority.
The Federal Reserve’s independence remains a key talking point for Wall Street, as President Trump continues to suggest he would fire Chairman J. Powell. The President continues to insist that the Fed should be cutting rates. President Waller again laid out his argument for a rate cut in the upcoming July meeting, while several other Fed officials noted the Fed was in a good position to wait for more data. Currently, the odds of a July rate cut are under 5%. Suggestions that Powell has mismanaged the renovation of the Federal Reserve’s building (seen as a reason to terminate Powell) have been growing so much that Powell has penned a letter to the President clarifying the renovation plans, including details on what has been spent.
The S&P 500 gained 0.6%, the Dow lost 0.1%, the NASDAQ led with an advance of 1.5%, and the Russell 2000 increased by 0.2%. The U.S. Treasury curve steepened, with shorter tenured Treasuries outperforming the longer end of the curve. The 2-year yield declined by three basis points to 3.88%, while the 10-year yield increased by one basis point to close at 4.43%. Oil prices fell 2.5% to close the week at $66.03 a barrel. Gold prices fell by $5.50 to close at $3,358.30 per ounce. Copper prices were little changed at $5.61 per Lb. Bitcoin’s price remained little changed despite a volatile week following its significant move in the prior week. Bitcoin is currently trading at $118,700. The U.S. Dollar index gained 0.6% on the week.
Inflation data and retail sales data were the highlights on the economic calendar. Headline Consumer Price Index increased by 0.3% slightly above the estimated 0.2%. On a year-over-year basis, the headline figure rose 2.7% in June, up from 2.4% in May. The Core CPI reading came in line with estimates of 0.2% but the yearly figure increased to 2.9% from May’s 2.8%. A decrease in the Shelter and Vehicle figures was encouraging; however, an uptick in Apparel and Furnishing prices may be a sign of increased levies showing up in the data. The Producer Price Index came in better than expected. The headline and core figures came in unchanged versus an estimated increase of 0.1%. On a year-over-year basis, both readings declined from the prior month. The data received on the CPI and PPI did very little to alter the course of Fed policy in the upcoming July meeting. Retail Sales increased by 0.6% versus an estimated 0.4%. The better print shows a resilient consumer. Initial Claims fell by 7k to 221k, while Continuing Claims increased by 2k. Labor continues to look okay. The preliminary July University of Michigan Consumer Sentiment Index increased to 61.8 from June’s figure of 60.7. Housing Starts and Building Permits both beat estimates, but the data was tempered by a decline in single-family starts and permits.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

The Most Important Ages of Retirement
Retirement is a series of milestones that arrive as you age. Here are the ones you should know about.
The retirement clock doesn’t start the day you stop working. It’s better to think of this period of your life as a range of important dates and milestones spread across several decades, some of which arrive while you’re still earning a paycheck. In short: It’s a process.
Why? The reality is contribution limits for your retirement accounts change as you age and tax penalties for certain kinds of withdrawals disappear. Similarly, you become eligible for different programs at different ages, and at a certain point you’ll be required to start taking a minimum amount from most of your retirement accounts each year.
Not all milestones require that you do something. But it’s still important to know about them. Here are the key ones, along with some suggestions about moves you could make.
Age 50: You can start making catch-up contributions to a company retirement plan or IRA.
In 2025, most workers can contribute up to $23,500 to a qualified retirement savings plan such as a 401(k), 403(b) or 457(b), while workers aged 50 and older can contribute an additional $7,500, for a total of $31,000. For the first time, those aged 60–63 will be allowed to make even larger catch-up contributions with an expanded limit of $11,250, instead of $7,500, for a total of $34,750. (Workers 64 and older can make the standard $7,500 catchup contribution.)
For traditional or Roth IRAs, the 2025 contribution limit remains at $7,000, while workers age 50 and older can contribute an additional $1,000.
Starting in 2026, another provision starts: If you make more than $145,000, all your catch-up contributions will need to be made to a Roth account, using after-tax dollars.
Ages 50–60: You may qualify for potential retiree benefits from work based on age and time in service.
Review any work-related benefits for retirees to understand what will be available to you in retirement, as well as any you may need to replace. Also, review your company’s stock-vesting provisions upon retirement as well as pension choices, if available.
Age 55: You can make catch-up contributions to a Health Savings Account (HSA).
In 2025, the HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage. If you’re 55 or older, you can make an extra catch-contribution of $1,000. Any amount you can save in such accounts can help you meet your immediate medical needs or set aside for health expenses in retirement.
Also age 55: If you retire early, you could be exempt from the 10% tax penalty on early retirement account withdrawals.
If you leave your job during or after the year you turn 55, you can withdraw money directly from a qualified employer-sponsored retirement plan, such as a 401(k) or 403(b), without penalty. (If you’re a qualified public safety employee such as a law enforcement officer, private or public sector firefighter, or air traffic controller, it’s age 50.)
If you’re considering early retirement, one possible strategy would be to roll over an IRA or any old 401(k) funds into your employer plan to get access to the funds early, without penalty. Keep in mind, though: Being able to withdraw money from qualified retirement accounts penalty-free doesn’t necessarily mean you should do so. Work with an advisor to create a personalized retirement and income plan.
Note: 457(b)s plans do not have an early withdrawal penalty if you leave your employer.
Age 59 ½: Generally, the 10% early withdrawal penalty no longer applies to IRAs or qualified retirement plans.
If you have significant tax-deferred savings, you may want to consider drawing them down (in combination with your taxable accounts) as early as possible. This can help you avoid a potential spike in income once your required minimum distributions (RMDs) start at age 73 (more on those below).
Why would this be a problem? It’s possible that RMDs could push you into a higher tax bracket once they kick in, especially after accounting for Social Security, pensions, and other income.
Age 60: A surviving spouse becomes eligible for Social Security benefits.
With an advisor, discuss Social Security strategies, including those with surviving spouse benefits.
Age 62: You become eligible for early retirement benefits from Social Security.
You can start taking benefits as early as age 62, wait until you’ve reached your full retirement age, or hold out to age 70. The closer you get to age 70, the larger your benefit. While there’s no “correct” claiming age for everybody, the rule of thumb is that if you can afford to wait, delaying Social Security can pay off over a long retirement.
That said, if you need the income right away or your income strategy depends on early withdrawals, then you should consider starting sooner.
Age 65: You become eligible for Medicare.
Medicare has specific enrollment periods, and if you miss them you could be hit with late-enrollment penalties. However, you may be able to enroll after age 65 without penalties if you continue to work past age 65 and keep your employer coverage. Pay close attention to Medicare enrollment periods if you have retiree health insurance from a former employer or are under COBRA. These types of coverage do not allow you to defer enrollment past age 65 without penalties and may leave gaps in your coverage. It’s important to get this right, so if you’re in doubt, get help from HR or contact Medicare.
Also note that once you are enrolled in Medicare, you’re not permitted to make contributions to a HSA. If you enroll in Medicare after reaching age 65, Medicare will backdate your enrollment by six months (but no earlier than age 65). To avoid an IRS penalty, make sure you stop contributions to the HSA in time.
Also age 65: The 20% penalty on non-qualified HSA distributions no longer applies.
Although you should consider using your HSA to cover medical expenses, you could also tap such an account as an additional source of income in retirement. If you use HSA funds for non-medical expenses after age 65, you’ll pay only ordinary income tax—a tax hit no worse than you would expect from an IRA withdrawal. Be aware, however, that using funds on non-medical expenses before age 65 would leave you paying both ordinary income tax and a 20% penalty. If you’re not yet retired, speak with a financial planner or tax advisor before making a move.
Ages 66–67: You become eligible for full retirement age (FRA) benefits from Social Security.
With an advisor, review strategies for taking Social Security now or waiting for delayed retirement credits (8% per year) up until age 70.
Age 70: Maximum benefits for Social Security attained.
Your benefits stop increasing at age 70, so don’t delay starting them.
Age 70 ½: You become eligible to make Qualified Charitable Donations from an IRA.
In 2025, you can give up to $108,000 (indexed for inflation) directly from your IRA to a qualified tax-deductible charity. QCDs can be an effective way to give to charity as well as reduce your tax bill, since they are excludable from taxable income. Once you reach the age when RMDs kick in, a QCD can be used to satisfy all or a portion of the RMD.
Age 73: RMDs begin.
In general, once you reach age 73, you must begin taking annual RMDs from all tax-deferred retirement accounts, such as 401(k)s, 403(b)s, 457(b)s, traditional IRAs, SEP IRAs, and SIMPLE IRAs.
You may choose to delay your first RMD until April 1 of the year following your 73rd birthday. However, delaying your first distribution would oblige you to take both your first and second RMDs in the same tax year, which could significantly increase your taxable income.
The IRS calculates RMDs by taking the sum total of all your tax-deferred retirement accounts at the end of each year and dividing it by a number based on life expectancy and other factors. The denominator gets smaller as your age increases, meaning your distributions get larger.
If you miss a deadline or don’t withdraw your full RMD, you will have to pay a penalty of 25% of the amount you failed to withdraw. For example, if your RMD was $100,000 but you withdrew only $50,000, you’d owe a quarter of the shortfall ($12,500) as a penalty. That said, if you correct an RMD mistake in a timely fashion, the penalty may be reduced to 10%. (Follow the IRS guidelines and consult your tax advisor.)
Keep in mind that although RMDs are required from age 73, it isn’t necessarily best to wait until that age to start withdrawals from you tax-deferred retirements. Yes, leaving your tax-deferred accounts alone could give them more time to grow, but extra growth could mean an even larger tax bill once RMDs do kick in. So, you may want to consider starting sooner.
One reason to save and invest throughout our working years is to have the resources to enjoy retirement—and not necessarily to leave large sums behind. Age 73 may be the RMD age, but you should have a plan for making the most of the assets available to you to support your retirement.
https://www.schwab.com/learn/story/most-important-ages-retirement
Year-of-Death RMD and RMD on Backdoor Roth: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
I have a client who died last month. She would have been age 83 this year. She had an IRA. Her husband, age 87, was the beneficiary of the IRA. She did not take her required minimum distribution (RMD) for 2025 before she died. He intends to do a spousal rollover by transferring the funds to his own IRA. Does he need to take the RMD prior to moving the funds?
Thank you!
Julie
Answer:
Hi Julie,
No, the husband can take the RMD after doing the rollover to his own IRA. That might be easier because it could be combined with his own 2025 RMD, which he must take from his existing IRA. In any case, he must take his wife’s 2025 year-of-death RMD by 12/31/26.
Question:
I am turning 73 years old in 2025. I am still working, so I know I don’t need to start taking required minimum distributions (RMDs) from my 401(k) because my plan has the “still working” provision. All of my IRAs have been converted to Roth IRAs. I do a backdoor Roth each year on January 1. My question is: Do I need to take an RMD on the $8,000 before I convert it to a Roth IRA?
Clinton
Answer:
Hi Clinton,
No. You would only have an RMD due for 2025 if you have a traditional IRA balance as of 12/31/24, but you did not have any traditional IRAs as of that date. As long as you convert the $8,000 before the end of the year, you will never have an RMD on those dollars, because lifetime RMDs are not required on Roth IRAs.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/year-of-death-rmd-and-rmd-on-backdoor-roth-todays-slott-report-mailbag/
How Trump Accounts Work
By Ian Berger, JD
IRA Analyst
The One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, includes a new savings vehicle for children called “Trump accounts.” The rules surrounding these accounts are complicated, and many media outlets are reporting inaccurate information.
Several types of contributions can be made to Trump accounts.
Government Contributions
A one-time $1,000 contribution from the Federal government will be made to a Trump account for any child born between January 1, 2025, and December 31, 2028.
Private Contributions Before the Age-18 Year
A parent (or any other person) can contribute to a Trump account on behalf of a childin any calendar year before the year the child turns age 18. These contributions can be made even for children who do not qualify for the $1,000 government contribution (i.e., even if the child is born before 2025 or after 2028).
These contributions have special rules:
- Total annual contributions on behalf of a child can’t exceed $5,000, indexed for inflation starting in 2028. No contribution is allowed before July 4, 2026.
- Contributions must be after-tax (non-Roth) contributions. No deduction can be taken on these contributions.
- There is no requirement that the child have any compensation in order to have a contribution made on his behalf.
- Contributions (and earnings) cannot be withdrawn before the first day of the calendar year in which the child turns 18 years old. After the age-18 year, funds in the account can be withdrawn for any reason.
- Distributions after age 18 follow IRA withdrawal rules. Therefore, withdrawn contributions are tax-free, but earnings are subject to ordinary income tax and the 10% early distribution penalty, unless an exception to that penalty applies. (An earlier version of the OBBBA allowed for capital gains treatment under certain circumstances, but this was deleted in the final law.) Because of the “pro-rata rule,” a portion of each distribution will usually be taxable (and possibly subject to penalty).
- Funds can remain tax-deferred in the account until the normal IRA required beginning date for required minimum distributions (RMDs). (An earlier version of the OBBBA required withdrawals at age 31, but that was also removed.)
- Before the first day of the calendar year in which the child turns age 18, contributions must be invested in a low-cost mutual fund or exchange-traded fund that tracks the S&P 500 stock index or another index comprised primarily of U.S. companies.
- Contributions do not count towards IRA or workplace plan contribution limits.
Private Contributions On or After the Age-18 Year
Contributions can also be made to a Trump account in a calendar year on or after the year the child turns age 18. However, these contributions must follow the traditional (not Roth) IRA contribution rules. These rules include:
- Annual contributions cannot exceed the applicable dollar limit (for 2025, $7,000, and $8,000 for age 50 or older), and there must be earned compensation at least up to the amount of the contribution.
- Roth IRA contributions aren’t permitted. However, it appears that pre-age-18-year contributions (and earnings) could potentially be converted to a Roth IRA on or after the age-18 year.
- Contributions can be deductible if the individual is not an active plan participant in a workplace plan or, if he is an active participant, has modified adjusted gross income below the applicable phase-out dollar limit.
- Contributions (and earnings) can be withdrawn at any time but are subject to taxes and penalty like traditional IRAs. Accounts are subject to RMDs at the normal RMD age.
- Post-age-18-year contributions and earnings (along with all dollars contributed before the age-18 year) can be invested in any vehicle other than collectibles, life insurance and S-corporation stock (i.e., the same limitations as IRAs).
Other Contributions
OBBBA also allows for employer-provided contributions to Trump accounts for teenage employees and dependents of employees. Total contributions from this source are limited to $2,500, indexed for inflation starting in 2028. (OBBBA says that employer contributions count towards the annual $5,000 overall limit, but that may be a drafting error.) The legislation also permits contributions by the Federal government, any state government or any tax-exempt organization to a targeted group of children who have not turned age 18 by the end of the calendar year in which the contribution is made.
Stay Tuned
These accounts are expected to become available in 2026. Many details still need to be ironed out. In the meantime, you should consult with a knowledgeable financial advisor or tax professional to learn more about how a Trump account might fit into your financial plan. As always, stay tuned to the Slott Report for all the latest news and updates.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/how-trump-accounts-work/
3 Retirement Account Takeaways from OBBBA
By Sarah Brenner, JD
Director of Retirement Education
On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill Act” (OBBBA). This mammoth domestic policy and tax law is hundreds of pages long and will impact many people in all kinds of ways. What does it mean for your retirement account? Here are 3 takeaways:
- Rothification will continue. While OBBBA does not include any new Roth account provisions, it is likely that in its wake the trend of “Rothification” will continue. The reason is the need for revenue. Many experts believe that the passage of OBBBA will continue the trend of ballooning budget deficits. In the past, Congress has turned to Roth accounts in attempts to plug holes in in the budget. Why? Roth accounts are after-tax accounts and thus provide immediate revenue. For Congress, the future tax-free growth in these accounts is someone else’s problem.
Back in 2017 during the tax reform debate, a proposal was made to increase revenue by pushing savers towards nondeductible Roth 401(k)s. This trend continued with SECURE 2.0 Act which now allows broader use of Roth-type plan accounts such as Roth SEP and SIMPLE IRA plans, and employer Roth 401(k) contributions. Also, beginning in 2026, 401(k) catch-up contributions must go to Roth 401(k)s when company wages exceed $145,000 in the prior year.
In the aftermath of OBBBA, expect to see more Roth accounts as Congress grapples with budget and deficit concerns.
- Conversion opportunities are expanded. For savers who are considering Roth conversions, OBBBA has removed a pending deadline. The 2017 Tax Cuts and Jobs Act’s lower tax rates were scheduled to sunset at the end of 2025. By eliminating this deadline and extending these rates into the future, OBBBA has opened the door to conversions in future years at today’s low tax rates. This changes the calculus for deciding whether to make Roth conversions. Also, OBBBA includes a number of new tax deductions (e.g., SALT, tips and overtime) that can be leveraged to lower the tax bill on a conversion.
- Planning with tax-advantaged accounts will be more important than ever. Many of the new tax breaks that are part of OBBBA come with income limits. Smart planning with tax-advantaged accounts is one way to reduce income and thus preserve a deduction that otherwise would be lost. For example, a 75 year-old could do a qualified charitable distribution (QCD) from his IRA to both satisfy a required minimum distribution and preserve eligibility for the new extra $6,000 senior deduction. Or, a 25-year-old could make a deductible IRA contribution or health savings account (HSA) contribution and remain eligible for the new tax break on tip income by keeping her income under the phase-out range.
Tax-advantaged accounts, like IRAs, 401(k)s and HSAs, provide a useful way for many individuals to lower their income, in some cases, even after the tax year is over. In the wake of OBBBA, this will become more valuable than ever.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/3-Retirement-Account-Takeaways-from-OBBBA

Weekly Market Commentary
A barrage of tariff letters sent to over 20 countries by President Trump yielded very little movement in the financial markets. Trump announced that there would not be additional extensions to negotiations and that tariff levels sent in these letters would go into effect on August 1st. Japan and South Korea levies were set at 25%, Brazil at 50%, Canada at 35%, the EU at 30%, and Mexico at 30%. The EU and Mexican letters were penned on Friday but sent Saturday morning. President Trump also imposed a 50% tariff on copper and suggested a 200% levy on pharmaceuticals. I was surprised the market did not react more negatively to these letters. However, there is still time for negotiations, and several leaders indicated they would diligently work with the Trump trade delegation to establish lower tariff levels.
NVidia shares rallied, and the company eclipsed a market cap of $4 trillion. It’s the first company to have a market cap above that threshold. Microsoft is a close 2nd with a market cap of $3.75 trillion. Notably, the Magnificent Seven now account for 40% of the S&P 500’s market cap. Delta Airlines posted better-than-expected 2nd quarter earnings. The news sent shares higher and provided a lift for the airline sector. The energy sector outperformed, along with the utility sector, while the information technology and consumer staple sectors underperformed. In the coming week, 2nd quarter earnings will start in earnest with several banks set to report.
The S&P 500 shed 0.3%, the Dow gave back 1%, the NASDAQ was off by 0.1%, and the Russell 2000 lost 0.5%. US Treasuries posted a second week of losses. $119 billion in Treasuries were auctioned this week with okay results. It was noticeable at all three auctions that there was lower participation from foreign investors. The 2-year yield increased by three basis points to 3.91%, while the 10-year yield rose by eight basis points to 4.42%. Oil prices rose 2.2% or $1.49 to close the week at $68.43 a barrel. Gold prices increased by $25.20 to close at $3,363.80 per ounce. Copper prices rose 8.9% on Trump’s 50% tariff announcement and closed at $5.60 per Lb. Bitcoin’s price hit an all-time high of $119,216. The US Dollar index added 0.7% to close at $97.87.
The S&P 500 rose 1.8%, the Dow gained 2.4%, the NASDAQ added 1.7%, and the Russell 2000 outperformed, rising 3.5%. The S&P 500 and the NASDAQ inked another set of all-time highs this week. US Treasuries were unable to post a 4th week of gains as a stronger-than-expected Employment Situation Report recalibrated expectations for future Fed rate cuts. The report eliminated any chance of a July cut and reduced the probability of a September rate cut to 70% from just over 90%. The 2-year yield increased by fourteen basis points to 3.88%, while the 10-year yield rose by six basis points to 4.35%. Oil prices increased by 2% or $1.37 to close at $66.94 a barrel. Concerns that OPEC+ will increase its production quotas again this weekend will likely keep a lid on prices in the near term. Gold prices increased by $41.80, closing the week at $3,338.60 per ounce. Copper prices rose by seven cents to $5.14 per Lb. Bitcoin’s price was little changed from where it started last week at $107,500.
The economic calendar was pretty quiet last week. NFIB Small Business Optimism fell slightly from the prior level, coming in at 98.6. FOMC minutes did not provide any surprises, but did reiterate that some Fed officials believe a rate cut could be justified at the July meeting. Currently, the probability of a July rate cut sits at 5.2%. Initial Claims fell by 5K to 227k, while Continuing Claims came in unchanged at 1965k. This coming week, we will get a full dose of inflation data with the Consumer and Producer Price Indices. We will also get a look at June Retail Sales, which, given what we saw from Amazon Prime sales, should be resilient. We will also get the first look at July’s Consumer Sentiment.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
One Big Beautiful Bill Act and IRA Rollovers: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
With the signing of the “One Big Beautiful Bill Act” (OBBBA) legislation and the current tax rates being made permanent, have your thoughts regarding Roth conversions changed?
Jim
ANSWER:
Jim,
We have always been, and will continue to be, big proponents of Roth conversions. OBBBA does not contain any changes directly related to the IRA or retirement plan rules, nor is there anything in the law specifically about Roth accounts. However, the law does contain several new tax deduction opportunities that could allow for larger Roth conversions. As you mentioned, the current tax rates are extended “permanently” (until Congress decides to change them). This expands the opportunity to do Roth IRA conversions at low brackets for future years.
QUESTION:
I took a distribution from my Roth IRA. Can I roll the funds back into the same Roth IRA, or must I move the funds to a different Roth IRA?
ANSWER:
If you have not done any 60-day IRA-to-IRA or Roth IRA-to-Roth IRA rollovers in the previous 12 months, you can roll the assets back to the same Roth IRA account. There is no rule that says the assets must go to a different account. You will still receive a Form 1099-R showing the distribution and a Form 5498 showing the rollover.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/one-big-beautiful-bill-act-and-ira-rollovers-todays-slott-report-mailbag/

Social Security Benefits Changes in 2025: What You Need to Know for Smarter Retirement and Tax Planning
Social Security is one of the most essential yet misunderstood pieces of the American retirement puzzle. With all the recent headlines, ranging from benefit increases and new payment rules to potential tax reforms under the Trump administration, many retirees and working individuals are left wondering: What does all of this mean for me?
If you’re planning for retirement, already receiving Social Security benefits, or navigating tax planning strategies, 2025 will be a pivotal year. This article explains the key updates and proposals shaping Social Security, and how to prepare now so you’re not caught off guard later.
Cost-of-Living Adjustment (COLA): Inflation Still Matters
One of the most anticipated annual changes to Social Security is the cost-of-living adjustment, or COLA. In 2025, the COLA is set at 3.2%, a much smaller bump compared to the historic 8.7% adjustment in 2023.
While this increase is meant to help keep up with inflation, its impact will be modest for many retirees. If you rely heavily on your monthly Social Security check, this smaller increase underscores the importance of careful retirement planning and having other sources of income in place.
Working While Collecting Benefits: Higher Limits, More Flexibility
For those who collect Social Security benefits while working, there’s some good news. In 2025, the earnings limit before benefits are reduced will rise to $22,300. If you’re under full retirement age and earning above that amount, the Social Security Administration will temporarily withhold $1 in benefits for every $2 over the limit.
For example, a 63-year-old earning $30,000 while collecting benefits would exceed the threshold by $7,700, leading to some temporary withholding. But here’s the catch: this reduction is not permanent. Once you reach full retirement age, those withheld benefits are recalculated and your monthly checks are adjusted upward.
Once you hit full retirement age, earnings limits no longer apply. You can earn any amount without a reduction in benefits. This flexibility can make a significant difference if you’re easing into retirement or continuing to work by choice.
Maximum Monthly Benefit: Aiming for $3,900
The maximum monthly Social Security benefit for someone retiring at full retirement age in 2025 will increase to $3,900. Achieving this amount, however, requires a long-term earnings history, specifically, having earned the maximum taxable income for at least 35 years.
This highlights a crucial point in Social Security benefits calculation: your benefit is based on your highest 35 years of earnings, adjusted for inflation. Strategically planning those final working years can significantly influence your retirement income.
Legislative Landscape: A Surge in Proposals, but No Clear Path Yet
Right now, there are over 660 bills in Congress with the term “Social Security.” While that volume reflects heightened attention, it also creates uncertainty. It remains unclear which proposals will gain traction and ultimately become law.
One proposal that has made waves is the Social Security Fairness Act, passed in early 2025, which eliminated both the Windfall Elimination Provision and the Government Pension Offset. This change is especially beneficial for those with government pensions who had previously seen their Social Security benefits reduced.
Expansion and Lockbox Acts: Reshaping the Framework
Two other major proposals are drawing national attention:
- The Social Security Expansion Act, introduced by Senators Bernie Sanders and Elizabeth Warren, proposes eliminating the income cap on Social Security taxation. Currently, only wages up to $176,100 are taxed at 6.2%. This bill would tax all wages, no matter how high, and increase annual benefits by approximately $2,400 per person. It also proposes a new method for calculating COLA, aiming to reflect seniors’ real expenses more accurately.
- The Social Security and Medicare Lockbox Act, proposed in the House, aims to protect surplus Social Security funds by limiting how and where they are invested. While still awaiting a vote, the goal is to ensure long-term financial sustainability.
Trump’s Tax Agenda and Social Security: What Could Change?
Former President Trump’s influence on the future of Social Security is also drawing attention as part of the broader Trump tax cuts 2025 conversation. His proposals include:
- Eliminating taxation of Social Security benefits, which would increase net income for millions of retirees.
- Offsetting these cuts by reducing government spending: a hiring freeze in federal agencies, eliminating 7,000 Social Security jobs, and updating legacy computer systems through the Department of Government Efficiency (DOGE), reportedly led by Elon Musk.
- Cracking down on fraud, including requiring in-person verification for certain claims and stricter identification protocols.
Two key executive actions have already been signed:
- A presidential memorandum (March 15, 2025) blocking illegal immigrants from accessing Social Security benefits.
- An executive order (March 25, 2025) mandating that, as of September 30, 2025, all federal payments, including Social Security, must be made electronically. This includes direct deposit, debit cards, digital wallets, or real-time payment systems. Paper checks will be phased out entirely to reduce fraud and administrative costs.
What You Should Do Now
With so many moving parts – policy proposals, taxation changes, benefit adjustments, 2025 is a critical year for retirement and tax planning. Regardless of your age or income level, here are a few steps to take now:
- Set up a My Social Security account at SSA.gov to track your benefits and update information securely.
- Review your earnings history and estimate your future benefits based on different claiming ages.
- Work with a trusted advisor to align your Social Security strategy with your broader tax and retirement plan, especially in light of potential changes to Trump taxes and broader fiscal policy.
Closing Thoughts
While no one can predict exactly how Social Security will evolve, staying informed and proactive is the best way to protect your future income. Whether you’re collecting benefits today or planning for retirement a decade from now, these updates underscore the importance of smart, integrated financial planning.
OBBBA: No IRA Changes, but More Roth Conversions?
By Andy Ives, CFP®, AIF®
IRA Analyst
Hopefully Ed Slott and Company is your trusted, go-to source for all things IRA and retirement plan related. Let’s be clear about the “One Big Beautiful Bill Act of 2025” (OBBBA), enacted on July 4. There is no “SECURE 3.0” in this legislation. It does NOT contain any changes DIRECTLY related to IRA or retirement plan rules.
There is nothing in the law specifically about Roth accounts. Nothing about Roth SEP IRAs. Nothing about 529-to-Roth conversions, Roth IRA contribution limits or any of the Roth topics we typically write about. However, what the law does contain are several items that tangentially relate to our bailiwick. Most of it can be framed as more items to consider – and more opportunities – when it comes to Roth conversions. For example:
- The reduced federal individual income tax rates, originally enacted in the 2017 Tax Cuts and Job Act, are extended “permanently” (until Congress decides to change them). This expands the opportunity to do Roth IRA conversions at low brackets for future years.
- For 2025, the standard deduction increases to $15,750 (from $15,000) for individuals, and $31,500 (from $30,000) for married filing jointly (MFJ). There are annual inflation increases for subsequent years. This will expand the opportunity to do Roth IRA conversions.
- There is a new $6,000 addition to the standard deduction for seniors aged 65 and older for years 2025-2028. This is per person, so a married couple could deduct up to $12,000 if each spouse is aged 65 or over. This is in addition to the regular standard deduction AND the extra deduction for those aged 65 or blind. This will expand the opportunity to do Roth IRA conversions. (Note that the deduction phases out beginning with modified adjusted gross incomes of $75,000 for individuals and $150,000 for those MFJ. It phases out completely at $175,000 and $250,000, respectively.)
- For those who itemize, the state and local tax (SALT) deduction is increased to $40,000, effective for 2025-2029, with a 1% increase each year. In addition, some pass-through business owners can work around the $40,000 limitation and get unlimited SALT deductions. More deductions could expand the opportunity to do more Roth IRA conversions.
- Taxpayers taking the standard deduction will now be able to make deductible charitable contributions, up to $1,000 for individuals and $2,000 for those MFJ. This could expand the opportunity to do more Roth IRA conversions.
- There are now tax deductions for tips and overtime. While there are caps and phase outs, this could expand the opportunity to do more Roth IRA conversions.
- The Child Tax Credit is permanently increased to $2,200 per child (effective in 2025), with annual inflation increases. Income limits remain the same at $200,000 (individuals), and $400,000 (MFJ). Guess what? More deductions could expand the opportunity to do more Roth IRA conversions.
Have I been repeating myself? If so, my apologies. Oh, and one more thing…Did you know that there are now more opportunities to do larger Roth conversions?
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/obbba-no-ira-changes-but-more-roth-conversions/
How Company Plan Loans Work
By Ian Berger, JD
IRA Analyst
Most company retirement savings plans, such as 401(k), 403(b) and 457(b) plans, are allowed to (but not required to) offer plan loans. According to a survey by the Employee Benefits Research Institute, as of the end of 2022, 52% of 401(k) plans allowed loans, while 84% of 401(k) participants were in plans offering them. Loans are not allowed from IRAs, SEP IRA plans or SIMPLE IRA plans.
Plan loans are generally limited to the lesser of 50% of your vested account balance, or $50,000. Your employer can allow an exception to this rule: If 50% of your vested account balance is less than $10,000, you can still borrow up to $10,000.
Example 1: Bonnie participates in a 401(k) plan that allows loans. Her vested account balance is $16,000. If the plan doesn’t allow the exception, the most Bonnie can borrow is $8,000. If the plan allows the exception, she can borrow up to $10,000.
Many plans limit participants to one outstanding loan at a time. But some plans do allow participants to take out a second loan while one remains outstanding. The amount of a second loan is limited by the outstanding balance of the first loan.
Generally, you must repay a plan loan within 5 years. But a loan used to purchase your principal residence can have a longer repayment period, usually 10 or 15 years. Loans must be repaid in substantially equal amounts made at least quarterly. Most plans require repayment through payroll deduction.
Here are some advantages of plan loans:
- If offered by the plan, they are usually available at any time and for any reason.
- As long as the loan satisfies the above rules, it isn’t a taxable distribution or subject to penalty.
- They don’t require a credit check, and the application process is simple and quick.
- They usually offer better interest rates than a commercial loan. Also, repayments are made back to your account – not to a bank.
Here are some disadvantages:
- Amounts borrowed are unavailable for investment growth within the plan.
- If you leave your employer with an outstanding loan balance that you can’t pay off, your plan account will be offset by the loan balance. That balance is considered a distribution subject to tax and possible penalty. You can avoid the tax hit if you can come up with the funds to roll over the unpaid balance to an IRA. The rollover deadline is October 15 of the year following the year the offset occurs.
Example 2: Clyde, age 50, terminates employment on July 15, 2025, with a $50,000 401(k) account balance and a $20,000 outstanding loan balance. Clyde does not have the funds to repay the loan balance. On August 15, 2025, the plan offsets his $50,000 account balance by the $20,000 loan balance and distributes $30,000 to him. He rolls over the $30,000 to an IRA within 60 days. Clyde has until October 15, 2026, to find other sources to replace the $20,000 so he can complete a full rollover. Otherwise, he will owe taxes on the $20,000 and a 10% early withdrawal penalty of $2,000 for 2025.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/how-company-plan-loans-work/

Weekly Market Commentary
The holiday-shortened week produced another week of gains for US equity indices. The S&P 500 was up 10.6 % in the 2nd quarter, while the NASDAQ composite rose 17.8%. Trump’s reconciliation bill was passed by the Senate and subsequently approved by the House, allowing the president to sign it into law on July 4. The Congressional Budget Office estimates the bill will increase the deficit by $3.4 trillion over the next decade. Interestingly, the US Treasury market had minimal reaction to the bills passing, but did have a material response to the stronger-than-expected Employment Situation report. In contrast, the UK Gilt market sold off on worries over the UK’s increasing deficit and on fears that the Chancellor of the Exchequer, Rachel Reeves, a fiscal hawk, would not remain in office. Prime Minister Sir Keir Starmer settled markets after reassuring the public about Reeves’ role and term as Chancellor. News that Vietnam and the US had reached a trade agreement propelled markets higher in hopes of more trade deals being made before the July 9th deadline. Retailers, Nike, and Lululemon, which have a significant manufacturing presence in Vietnam, rallied on the accord. Futures markets regressed slightly on Friday as Trump reiterated the July 9th deadline and stated that some countries could face levies of up to 70%.
Financials rallied on the back of passing the Fed’s stress tests. This likely opens the door for reduced capital requirements for banks, which will likely result in banks distributing excess capital to shareholders. Apple announced plans to utilize OpenAI or Anthropic’s technology for a revamp of Siri. Apple shares have lagged many of the other MAG seven companies due to concerns that their AI initiatives were uninspiring and falling behind. The news sent shares higher. Microsoft announced another round of layoffs as it attempts to streamline its operations, citing the need because of its significant capital expenditure on AI. Cadence Design and Synopsys rallied on news that the White House would allow exports of Software for semiconductor chip design.
The S&P 500 rose 1.8%, the Dow gained 2.4%, the NASDAQ added 1.7%, and the Russell 2000 outperformed, rising 3.5%. The S&P 500 and the NASDAQ inked another set of all-time highs this week. US Treasuries were unable to post a 4th week of gains as a stronger-than-expected Employment Situation Report recalibrated expectations for future Fed rate cuts. The report eliminated any chance of a July cut and reduced the probability of a September rate cut to 70% from just over 90%. The 2-year yield increased by fourteen basis points to 3.88%, while the 10-year yield rose by six basis points to 4.35%. Oil prices increased by 2% or $1.37 to close at $66.94 a barrel. Concerns that OPEC+ will increase its production quotas again this weekend will likely keep a lid on prices in the near term. Gold prices increased by $41.80, closing the week at $3,338.60 per ounce. Copper prices rose by seven cents to $5.14 per Lb. Bitcoin’s price was little changed from where it started last week at $107,500.
The labor market was the focus of this week’s economic calendar. Non-farm payrolls increased by 147,000, which was significantly higher than the consensus estimate of 110,000 and the whisper number of 90,000. Interestingly, the bulk of these payroll numbers came from government workers in education, which casts considerable doubt on the labor market strength and the data series, notorious for significant revisions and seasonal adjustments. Private Payrolls came in weaker than expected at 74k vs. an estimated 123k. The Unemployment rate ticked down to 4.1% from 4.2%. Average Hourly Earnings increased by 0.2% versus an estimated increase of 0.3%. The Average Work Week declined to 34.2 hours from 34.3. ADP Employment Change declined by 33k, while Continuing Claims fell by 4k to 233k, and Continuing Claims came in unchanged at 1.964M. ISM Manufacturing Contracted at a smaller pace, coming in at 49 versus the prior reading of 48.5. ISM services returned to expansion with a reading of 50.8.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
60-Day Rollovers and the Age 55 Exception: Today’s Slott Report Mailbag
By Sarah Brenner, JD
Director of Retirement Education
Question: Can an IRA beneficiary do a 60-day rollover?
Answer: Only a spouse beneficiary can do a 60-day rollover from an inherited IRA if the funds are moving into an IRA in her own name. If a nonspouse beneficiary takes a distribution from an inherited IRA, those funds cannot be rolled over. A nonspouse beneficiary can move funds from one inherited IRA to another, but this must be done by a direct transfer.
Question: I am age 57 and retiring this year. I know there is an exception to the 10% early distribution penalty when someone separates from service in the year they reach age 55 or later. I also know this exception does not apply to IRAs. I understand that if I roll over some funds to the IRA, then I can’t use the exception when taking a distribution from the IRA. However, if I leave other funds in my employer plan, can I still use the exception when withdrawing those other funds?
Answer: Yes, the age 55 exception would be available for the funds left in the plan even though it would not be for the funds rolled to the IRA. However, you will need to check with the plan to see if they will allow a partial distribution with the remainder of the funds staying in plan. Some plans will not allow this.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/60-day-rollovers-and-the-age-55-exception-todays-slott-report-mailbag/

Planning to retire in 2025? Do these 7 things now
A wonderful retirement is the goal of many people, and you want it to come off without any major snags. But retirement plans always face challenges, whether it’s the volatility of the markets, the affordability of healthcare or the risks posed by inflation. Plus, you’re likely to face decades on a fixed income, and won’t have the financial flexibility you had before.
“Something that will surprise upcoming retirees is how long retirement actually is,” says Craig Cecilio, CEO and founder of DiversyFund, a real estate investing platform based in the San Diego area. He notes that retirement has been lasting longer over time as people live longer.
How to retire: 7 steps to take
Thinking about your golden years and how to plan for them can feel overwhelming, given the intricate nature of retirement planning. You have to juggle a variety of factors, like unexpected changes in the stock market, rising healthcare costs and the ever-present pressure of inflation. That’s why it’s vital to be fully prepared before you retire, and even make room in your plans for the unexpected.
Here are seven things to do now to ensure your golden years really are golden.
1. Review your retirement financial plan
- Get your retirement plan in order
- Have a retirement advisor review your plan
A good retirement starts with a good retirement plan, and before you leave the safety of a steady salary or income, you want to make sure your plan is as rock solid as you can make it.
“If you haven’t already, the first thing anyone needs to do before retiring is to devise a retirement plan that is tailored to their goals and factors in things like cost of living, medical expenses, and Social Security,” Cecilio says. He also recommends paying off your debt before retirement to give you more financial flexibility.
And if you have a plan in place already, make sure you review it so that it’s up to date with the latest figures and estimates.
“You must revisit your retirement income plan to make sure your retirement income is enough to exceed expenses so that you do not risk having to unretire or, worse, run out of money,” says Beau Henderson, a retirement income certified professional and founder of RichLife Advisors in Gainesville, Georgia.
Retirement planning is a tall task for many individuals, especially given the complexities around what you’ll earn with Social Security, the costs of Medicare and potential investment returns.
“Have a specialist help you look at your situation,” says Sharon Duncan, CFP with Selah Financial Services in Houston. “You’re likely to be retired 20, 30, or more years. Inflation will make your cost of living go up, but your retirement income will probably not go up as fast.”
A financial advisor, particularly a fee-only fiduciary advisor, can help you avoid common mistakes, such as having the wrong allocations early in your retirement or not having enough income.
2. Prepare for the impact of inflation
- Your retirement plan needs to factor in inflation
- Inflation will take a big bite out of your income over time
As the last few years showed, inflation can pick up at unexpected times and really hurt those who aren’t prepared. Inflation can absolutely devastate a financial plan that relies heavily on fixed-income investments such as bonds. If you need to spend all your retirement income and can’t reinvest any of it, inflation will grind down your purchasing power over time, making your dollars worth much less.
So you need a financial plan that factors in inflation. Social Security does raise its payouts in response to rising prices, but that won’t likely be enough to protect your standard of living.
You’ll need to build a financial plan that has some growth assets in it, so that your income can rise over time and you won’t be left making the same income you did 10 years ago.
“We can run retirement cash flow reports that will analyze the current income needs of the client and their available assets, and it projects forward 20-30 years with some reasonable growth assumptions for the investments,” says Ben Barzideh, a chartered financial analyst and wealth advisor at Piershale Financial Group in Barrington, Illinois. “We can add a cost of living increase each year to their income and see how that would affect the long-term projections.”
You’ll want to be sure that your financial plan is not too conservative and allows you to grow your money over that longer retirement period. Otherwise, inflation may eat up your income.
3. Protect your assets from the market
- Keep money you need to spend soon out of the market
While it would be nice to live off the earnings of investments and not have to dip into principal, that’s not likely to be an option for most retirees. So it’s important to make sure any income that you’ll need in the near future (that is, at least over the next year) is protected from the market. You don’t want to rely on the market to be up (so you can sell stock) to fund your expenses, as the bear market of 2022 painfully demonstrated.
For example, if you have Social Security and other retirement income of $30,000 a year, but you need $35,000 in income, you want to set aside $5,000 from investment accounts, which are more volatile than bank accounts. You can put this money in a high-yield online savings account or dump some of it into a short-term CD so that it may earn interest until you need to use it.
4. Plan healthcare carefully
- Healthcare expenses regularly bust the budgets of retirees
- Retirement advisors can help you figure out healthcare, too
“What might surprise someone retiring this year is how much health insurance costs these days,” says Barzideh. He says many people put off retirement until they’re old enough to get Medicare, unless they can find a cheaper alternative before then.
So if you’re planning on retiring before Medicare kicks in at age 65, make sure you have an affordable healthcare plan. But it’s not as easy to know what your options are and set up the plan as it was when you were working.
“If you’re used to your company providing a few choices during open enrollment and then you’re done, you’ll find that health insurance requires more leg work during retirement,” Duncan says. “It’s not an impossible task, it’s just frustrating and time-consuming.”
Here again, a good financial advisor may be able to help you find quality, affordable options and compare the costs and the effects on your overall financial plan. Bankrate’s AdvisorMatch can connect you to a professional advisor to help you achieve your financial goals.
5. Shift your perspective from saving to spending
- Your mindset needs to shift to one where you can spend without guilt
You’ve gone your whole life working and saving, but now that you’re in retirement you’ve made it to the time you’ve been saving for. You’ll have to shift to a spending mentality.
“Up until retirement, we think spending what we have saved is ‘bad,’” says Duncan. “In retirement, it’s just the opposite. It’s actually OK to spend, and not save, during retirement. Although this seems simple enough, it is a hard emotional change for many people because we feel like we’re breaking the rules.”
Duncan says the feeling usually goes away after a few months of living in retirement.
For others who have been trained in saving their whole lives, it might be useful to set up a minimum spending budget, at least at first. With this budget, they can purposely spend with an easier conscience and still know that they have money left in reserve if they need it.
6. Re-establish your purpose
- Find what you love to do in order to make your retirement meaningful
Having a successful retirement is not all about getting the financial details right, though those details do make it all a lot easier. It also revolves around finding new purpose away from the work world, perhaps with new friends, or in a different context altogether.
“We have had purpose during each phase of our life, and retirement is no different,” says Duncan. “Retirement offers a freedom and flexibility like never before. You can even change your purpose whenever you want.”
Without purpose, you may find yourself dreading your free days and even feeling bored.
“Find a purpose and live retirement intentionally. It improves your health, vitality and happiness,” she says.
7. Plan to stay on top of finances in retirement
- A fixed income means that a budget and planning are even more important
You might think that once you’re retired with a solid financial plan, you’re ready to kick back, but it’s still important to manage your finances. Given that many live on a fixed income, it might be more important to stay on top of your finances and how changes to the law may affect them.
“Be proactive with your retirement and take it upon yourself to know what applies to you and your household in retirement,” says Henderson, pointing to potential changes in taxes, laws and Social Security.
“When you know the rules you can put yourself in the best position possible,” he says. “The problem is that most people are passive in their retirement planning and only address issues after the fact, and that is where the major mistakes are made.”
https://www.bankrate.com/retirement/planning-to-retire-soon-do-these-things-now/#7
10 Things You Should Know about Fixing Late Rollovers With Self Certification
By Sarah Brenner, JD
Director of Retirement Education
When retirement account funds are on the move, things do not always go as planned. The best way to move these funds is to do so directly, but that may not always be possible. It is very common for money to be moved between retirement accounts by using 60-day rollovers. Unfortunately, the 60-day rollover deadline is often missed.
Fortunately, there is a way to fix these mistakes. You can complete a late 60-day rollover of retirement funds using a self-certification procedure. Here are 10 things you should know about this procedure:
- Self-certification is available for missed 60-day rollover deadlines for both IRAs, including Roth IRAs, SEP IRAs and SIMPLE IRAs, and company plan accounts.
- This procedure can provide an immediate and cost-free fix for a missed rollover deadline, potentially saving you from taxes, penalties, and the loss of tax-deferral or tax-free status of your retirement savings.
- To qualify, you cannot have been previously denied a waiver by the IRS and the reason for your late rollover must be one from a list of 12 specific reasons approved by the IRS. Among the most common of these 12 reasons are serious illness and mistakes by the financial institution.
- There is no “miscellaneous” or “other” category when it comes to the self-certification process. If you are late for a reason that is not one of the 12 listed ones, you would still need to go through the process of filing a private letter ruling (PLR) to seek relief.
- You must redeposit the funds in a retirement account as soon as possible after the reason (or reasons) no longer prevent you from making the contribution. There is a 30-day safe harbor window to meet this requirement.
- You must make a written certification to the plan administrator or IRA custodian that a contribution satisfies the conditions for a waiver. The IRS has even provided a model letter that should be used for this written certification requirement.
- Self-certification is not a waiver by the IRS. You are not necessarily completely off the hook. You are allowed to report a contribution as a valid rollover on your tax return, but the IRS can still later audit your return and determine that a waiver was not appropriate.
- Late rollovers through self-certification will be on the IRS’ radar. Reporting from the IRA custodian will tip off the IRS that a late rollover has occurred.
- If you violate another rollover rule other than missing the deadline, you are out of luck. The self-certification process will not help you. For example, if you do more than one IRA-to-IRA or Roth IRA-to-Roth IRA 60-day rollover in a 12-month period, this mistake cannot be fixed with self-certification.
- While self-certification is helpful, your best bet to avoid missing the 60-day deadline, as well as other rollover errors, is to stick with trustee-to-trustee transfers and direct rollovers when you are looking to move your retirement funds.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/10-things-you-should-know-about-fixing-late-rollovers-with-self-certification/
Pro Rata, Not “Double Tax”
By Andy Ives, CFP®, AIF®
IRA Analyst
The pro-rata rule dictates that when an IRA contains both non-deductible (after-tax) and deductible (pre-tax) funds, then each dollar withdrawn (or converted) from the IRA will contain a percentage of tax-free and taxable funds based on the ratio of after-tax funds vs. the entire balance in all your IRAs. When there is a mix of pre- and after-tax dollars, you cannot withdraw (or convert) just the non-deductible funds and pay no tax.
When we say “all of your IRAs,” we mean that the pro-rata rule looks not only at a person’s traditional IRAs, but also at any SEP and SIMPLE plans that he may also own. For the pro-rata rule, the IRS considers all of these accounts as one big bucket of money. You cannot “shield” certain dollars by moving them to their own separate account at a different custodian. Note that inherited IRAs, Roth IRAs and work plans, like a 401(k), are NOT factored into the pro-rata math.
Now that we know which accounts will be involved, how does the pro-rata math work? Using a round-number example, assume a person (Ralph) has a $100,000 IRA. Ralph does not own any other IRAs, SEP or SIMPLE plans. Within this $100,000 IRA, there is $10,000 of after-tax (non-deductible) money. How those after-tax dollars got there is irrelevant. Maybe they were rolled over from a work plan. Maybe Ralph made non-deductible contributions over the past few years. Regardless, Ralph wants to do a partial Roth conversion.
The ratio of pre-tax to after-tax dollars in this $100K IRA is 9:1. As such, the pro-rata rule dictates that ANY Roth conversion Ralph does will be 90% taxable. This is true if Ralph converts $20,000, $50,000 or the whole account. Ralph cannot cherry pick the $10,000 of after-tax dollars and only convert those.
Ralph instructs his financial advisor to process a $10,000 Roth conversion. Based on the pro-rata rule, Ralph will owe tax on $9,000 of this conversion. Ralph is not a happy camper. He complains to his advisor that “This is double tax! I already paid tax on that $10,000, and now I’m paying it again.” Ralph’s financial advisor calmly explains the situation and walks Ralph off the proverbial ledge. In fact, Ralph is not paying “double tax” as he feared.
The Explanation: As mentioned, with Ralph’s $10,000 Roth conversion, we cannot convert only the $10,000 of after-tax dollars. Based on Ralph’s 9:1 ratio, we carve off $9,000 from the pre-tax portion of his IRA balance and carve off another $1,000 from the after-tax portion of his IRA. These are the dollars that get converted, and Ralph pays tax on $9,000 of his pre-tax funds.
After the conversion, Ralph has a $10,000 Roth IRA that is all after-tax dollars. What remains in Ralph’s traditional IRA? The balance is down to $90,000. Since we took $9,000 of the pre-tax dollars and $1,000 of the after-tax dollars for the conversion, the mix in his traditional IRA is now $81,000 pre-tax, and $9,000 after-tax. And what is that ratio? Still 9:1.
Combined (traditional + Roth IRA), Ralph still has $100,000. Between the two IRAs, Ralph now owns $19,000 of after-tax dollars. There was no “double tax” on the $10,000. Pro-rata simply carved off a percentage of each type of dollar (pre-tax and after-tax) and converted the proportionate amount.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/pro-rata-not-double-tax/

Weekly Market Commentary
The S&P 500 and the NASDAQ joined the NASDAQ 100 in forging new all-time highs in an extremely busy week for Wall Street. A de-escalation of the Iran-Israel-US conflict happened on the twelfth day after Israel’s initial strikes. The US bombed three key nuclear facilities last Saturday, with mixed assessments on the damage to the facilities. Markets braced for increased tensions and the possibility of shipping interruptions at the Strait of Hormuz. A retaliatory strike by Iran on a US base in Qatar was telegraphed to the US to avoid casualties and set the footing for a ceasefire agreement. The market rallied after the ceasefire and turned its attention to a full economic calendar, Fed Chairman Powell’s semiannual testimony to Congress, Global trade, some residual Q1 earnings, and Senate negotiations on Trump’s “One Big Beautiful Bill”.
Dovish comments from Fed Governor Bowmen suggested that the Fed could cut its policy rate as soon as July, consistent with what we heard from Fed Governor Waller in the prior week. The likelihood of a July rate cut increased from 14% to nearly 25% after the comments. However, in testimony in front of Congress, Chairman Powell pushed back and suggested the Fed could continue to wait to cut its policy rate. That said, he did leave the door open for rate cuts dependent on a weakening of the labor market and continued progress on inflation. Not surprisingly, President Trump pushed back on the Fed Chair’s hawkish tone and suggested he may announce his next Fed Chairman’s nomination well before Powell’s term ends in May. The Federal Reserve also announced that it would reduce capital requirements at some banks and that most banks had passed their most recent stress tests.
Late in the week, the market was catalyzed by the announcement that the US and China had reached a framework for trade. China will open up more exports of rare earth minerals, while the US will relax some of the curbs associated with technology exports to China. Treasury Secretary Bessent also suggested the timeline for trade negotiations could be extended for some countries. At the same time, Commerce Secretary Lutnick told reporters that the US was close to nine other trade deals. Trump announced Friday that the US and Canada negotiations were off the table after Canada imposed a digital services tax and a 400% tariff on US dairy products.
Micron Technology’s Q1 earnings results sparked a rally in the Semiconductor sector. The news helped push NVidia to all-time highs and gave weight to expectations of more cap-ex spend on artificial intelligence. Nike also had a great quarter and helped buoy a rally in the Consumer Discretionary Sector. The sector also benefited from Tesla’s robo taxi launch in Austin, Texas.
The Senate found the votes late Saturday night to proceed with the reconciliation bill. The bill will now undergo a full reading by the Senate, followed by more debate. The bill will then enter into several amendment votes. This process will likely bleed into the coming week, and Senate passage is not guaranteed. The President has called on his republican lawmakers to get it passed for his signature before the Independence Day holiday.
The S&P 500 gained 3.4%, the Dow rose 3.8%, the NASDAQ jumped 4.2%, and the Russell 2000 inked a gain of 3%. US Treasuries had a third consecutive week of gains as rate cut expectations increased on mixed economic data and dovish comments from some Fed officials. The 2-year yield declined by sixteen basis points to 3.74%, while the 10-year yield fell by nine basis points to 4.29%. Oil prices tumbled on the ceasefire agreement. WTI fell by 11% or $8.26 to close the week at $65.57 a barrel. Gold prices fell by 2.7% to close the week at $3,292.80 per ounce. Copper prices surged by 4.9% and closed above $5 per pound for the first time in several months. Bitcoin prices increased by 7.5%, closing the week at $107,500.
There were several items on the economic calendar this week. PCE, the Fed’s preferred measure of inflation, came in a touch higher than what the street was expecting on a year-over-year basis. The headline print came in at 2.3% versus April’s 2.2%, while the core reading came in at 2.7% compared to April’s 2.6%. Personal Income fell by 0.4% versus the consensus estimate of 0.4%. Personal Spending fell by 0.1% compared to the forecast of 0.2%. The third look at Q1 GDP fell to 0.5% from -0.2% but again must be tempered given the massive increase in imports in front of the expected tariffs. Consumer Confidence and Sentiment ticked higher on the back of the delayed tariffs. Consumer Confidence came in at 9, while Consumer Sentiment ticked to 60.7. Initial Claims fell by 10k even as Continuing Claims increased by 37k to 1,974k. May Durable Goods orders surged by 16.4% versus the prior reading of -6.6%.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
The Roth 5-Year Clock and the Pro-Rata Rule: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
I am over age 59½ and have had a Roth IRA account for more than 5 years. Starting in 2025, I designated all of my contributions into my employer’s 401(k) plan as Roth contributions. If I decide to retire before I have met the 5-year requirement for the Roth 401(k) and roll over this balance to my existing Roth IRA account, which 5-year clock applies to those former Roth 401(k) dollars?
Thanks for taking my question!
Lois
Answer:
Hi Lois,
The Roth IRA clock will apply. Since you are over age 59½ and you’ve had a Roth IRA for more than 5 years, any distribution from your Roth IRA (including all earnings) will be tax and penalty-free. That includes distributions of Roth 401(k) funds that you have rolled over.
Question:
Dear Ed Slott and America’s IRA Experts,
I have a rollover traditional IRA that was set up when I left my last job. I am no longer employed, so don’t have any earned income. My husband works full time and we file married/filing joint.
Can I contribute to a newly established traditional IRA account and then convert to a Roth IRA for tax year 2024? When I convert the contribution from the new traditional IRA to a Roth IRA, do I have to consider the assets in the rollover traditional IRA and calculate the taxes on a pro-rata basis? Or do I calculate taxes owed on the backdoor Roth using only the contribution from the new traditional IRA? Lastly, is this conversion strategy limited by income levels?
Thank you and looking forward to hearing from you.
Sincerely,
Anna
Answer:
Hi Anna,
Assuming your husband has enough compensation, you can make a spousal IRA contribution based on his compensation. However, it is too late to make a contribution for 2024. Since you are inquiring about a backdoor Roth IRA, I assume your husband’s income is over the married/filing joint threshold ($236,000 – $246,000 for 2025) for contributing directly to a Roth IRA. If you make a non-deductible IRA contribution for 2025 and want to do a Roth conversion, the pro-rata rule will require you to take into account your existing rollover traditional IRA. Therefore, a part of that conversion will be taxable. There are no income limits on doing Roth conversions.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/the-roth-5-year-clock-and-the-pro-rata-rule-todays-slott-report-mailbag/

3 Retirement Mistakes That Can Still Be Fixed in 2025
Retirement planning is rarely perfect. Life throws curveballs—health issues, market downturns, career changes—and even the most diligent savers can stumble along the way. If you’ve made financial missteps or feel unprepared as you approach retirement, you’re not alone.
But here’s the good news: it’s not too late to make course corrections.
In 2025, there are still actionable strategies that can help you recover from common retirement mistakes. Whether you’re already retired or just a few years out, these planning moves can help secure your financial future and restore peace of mind.
Let’s explore three of the most common retirement mistakes—and how you can still fix them this year.
Mistake #1: Underestimating Retirement Income Needs
The Problem:
Many retirees assume that their expenses will drop significantly in retirement. But the reality is that costs often remain steady—or even increase due to rising healthcare expenses, inflation, or lifestyle choices like travel and hobbies.
If your budget doesn’t reflect realistic monthly income needs, you may be drawing down your savings too quickly.
The Fix in 2025:
Recalculate your retirement income gap.
Start by identifying guaranteed sources like Social Security and pensions. Then, project your monthly expenses—include healthcare premiums, property taxes, and inflation-adjusted spending.
Next, evaluate income-producing assets like IRAs, 401(k)s, or annuities to determine if they fill the gap. If not, consider:
- Adding a fixed indexed annuity (FIA) for guaranteed lifetime income
- Delaying Social Security to increase your benefit
- Reallocating portfolio assets for more stability and cash flow
Tip: You can still take advantage of favorable annuity rates in 2025 and lock in income now or in the future.
Mistake #2: Missing Key Tax Strategies in Retirement
The Problem:
Too many retirees take Required Minimum Distributions (RMDs) or withdrawals without thinking about tax brackets, Medicare surcharges, or future liability. And with the sunset of the Tax Cuts and Jobs Act looming in 2026, tax rates could rise.
Failing to plan for taxes can shrink your retirement income—and increase the chance of outliving your savings.
The Fix in 2025:
Make strategic tax moves this year.
Here are three you can still use:
- Roth Conversions
Convert pre-tax IRA or 401(k) funds into a Roth IRA while rates are still low in 2025. This creates tax-free income later—and reduces future RMDs. - Qualified Charitable Distributions (QCDs)
If you’re over 70½, you can give up to $100,000 directly to charity from your IRA, reducing your taxable income without needing to itemize. - Work with your financial advisor or tax professional to explore if tax-efficient portfolio adjustments—like rebalancing or realizing losses—make sense for your situation.
Planning note: Work with a tax advisor to coordinate conversions and charitable giving while staying under key Medicare thresholds.
Mistake #3: Avoiding Protection Products Due to Misconceptions
The Problem:
Some retirees avoid annuities or long-term care planning because of outdated assumptions—like “annuities are bad” or “I’ll never need care.”
This leaves them overexposed to market downturns and vulnerable to rising medical costs. Longevity risk and healthcare inflation are two of the biggest threats to retirement security—and many people ignore them until it’s too late.
The Fix in 2025:
Reevaluate your protection tools.
Modern annuities offer a wide range of benefits beyond just income:
- FIAs offer market-linked growth with no downside risk
- Income riders provide guaranteed lifetime income
- Hybrid annuities offer enhanced payouts for long-term care without “use it or lose it” risks
- Multi-year guaranteed annuities (MYGAs) are offering CD-like yields with tax deferral
And most importantly: These solutions can be tailored. You don’t need to put all your assets into annuities or protection products—just enough to cover essential expenses or future care.
2025: A Critical Window to Course-Correct
The choices you make now can determine how confident you feel 5, 10, or 20 years into retirement. Fortunately, 2025 still offers an opportunity to adjust, especially before scheduled tax law changes in 2026.
Mistake | Fix in 2025 |
---|---|
Underestimating income needs | Review spending; fill gaps with annuities or other income |
Ignoring tax strategies | Use Roth conversions, QCDs, and income timing |
Avoiding protection tools | Explore FIAs, LTC riders, or MYGAs for stability |
Final Thought: It’s Not Too Late—But It Is Time
It’s easy to delay retirement planning fixes, especially when you’re overwhelmed or unsure where to start. But 2025 gives you a window of opportunity to pivot, protect, and rebuild confidence in your plan.
The longer you wait, the fewer options you may have. But take action now—and you may be surprised how much better your future can look.
Disclaimer: This article is for educational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed advisor or tax professional before making investment decisions. Guarantees are backed by the claims-paying ability of the issuing insurer.
https://safemoney.com/blog/annuity/3-retirement-mistakes/
Double Your Pleasure – The 457(b) 2x Catch-Up
By Ian Berger, JD
IRA Analyst
If you’re in a 457(b) plan and are nearing retirement, you may want to consider an often-overlooked rule that could allow you to defer twice the usual annual elective deferral limit (for 2025, $23,000 x 2 = $47,000) in the three years before retirement.
This almost-too-good-to-be-true opportunity is sometimes called the “2x catch-up” or the “3-year special catch-up.” It’s available if you are in either of the two types of 457(b) plans: governmental plans for state and local municipal workers, and non-governmental plans for key management and other high-paid employees of tax-exempt employers like hospitals and universities. (The latter plan is often referred to as a “top-hat” plan.)
It should come as no surprise that there are limitations on the 2x catch-up. First, plans do not have to offer it, although most do. Also, this is a true catch-up contribution, since any prior elective deferrals to the 457(b) will offset it. In other words, the only way you can defer exactly twice the deferral limit is if you haven’t previously put away any funds in the plan. Finally, if you’re a municipal worker, you can’t use the 2x catch-up in the same year you also use the age-50-or-older catch-up or the “super catch-up” for ages 60-63. (Note that neither the age-50-or-older catch-up nor the super catch-up is available if you’re in a top-hat plan.)
The 2x catch-up can be done in the 3 calendar years before the employee reaches his “normal retirement age.” That term should be defined in the 457(b) plan document. IRS rules say that the plan can define “normal retirement age” as any age chosen by the employee that is between 65 and 70½. (If you’re in a defined benefit pension plan, an earlier age may be possible.) So, you can normally make the 2x catch-up in the three calendar years before an age you choose that is between 65 and 70½. (In some cases, the plan will designate a uniform normal retirement age in that range without allowing you to choose.)
Starting next year, certain highly-paid employees in municipal 457(b) plans (as well as in 401(k) or 403(b) plans) who want to make catch-up contributions will have to make them as Roth contributions. (If the plan does not offer Roth contributions, these high-paid individuals won’t be able to make any catch-up contributions at all.) Does this rule apply to the 2x catch-up? The IRS says no – except in the highly unusual situation where your age-50-or-older catch-up limit is higher than your 2x catch-up limit. In that case, catch-up contributions up to the 2x catch-up limit don’t have to be made on a Roth basis. Only catch-ups over the 2x limit have to be Roths.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/double-your-pleasure-the-457b-2x-catch-up/
Moving Your Roth Account
By Sarah Brenner, JD
Director of Retirement Education
The year 2025 has been a turbulent time for the economy. Whether due to job loss or persons seeking better investment opportunities in volatile markets, retirement account funds are on the move more than ever. Fortunately, portability between different types of retirement accounts has expanded, creating more options for those relocating their money.
If you are among the growing number of savers choosing to use Roth accounts for retirement savings, you may have questions when it comes to moving your money.
Roth Options
As Congress expands the universe of Roth accounts, more options are available when it comes to moving retirement funds. Designated Roth plan accounts (such as Roth 401(k)s, 403(b)s, and governmental 457(b) plans) can be rolled into Roth IRAs or other Roth plan accounts, if the receiving plan allows.
Roth IRA funds can be moved to other Roth IRAs, but Roth plans cannot accept Roth IRA funds. Although no one should want to do this, a Roth account cannot be rolled over or transferred to a non-Roth account, such as a traditional IRA or qualified plan.
Roth SEP and Roth SIMPLE IRAs, which were established by the SECURE 2.0 Act, are slowly becoming more available as the arrival of IRS guidance has led to more custodians allowing these options. These accounts are subject to portability rules similar to those for non-Roth SEP and SIMPLE IRAs.
The Right Roth Moves
Once an individual understands the options for moving Roth funds, the next step is to complete the move correctly. The best way to ensure this happens properly is to move the retirement account funds directly from one Roth retirement account to another. Moving your Roth money directly avoids all sorts of complications and problems that come along with moving the funds indirectly (that is, by taking a distribution and then doing a 60-day rollover).
From work plans like a Roth 401(k), this means doing a direct rollover to another plan or to a Roth IRA. Instead of opting to receive the funds, the participant instructs the plan to send the funds directly to the receiving retirement account. A check made payable to the receiving plan administrator or Roth IRA custodian also qualifies as a direct rollover, even if it is sent to the plan participant for forwarding.
For Roth IRA funds, the best way to move money is by doing a direct transfer (if possible). The Roth IRA custodian would send the funds directly to the new account without the account owner ever taking receipt of the funds. Alternatively, a check could be made payable to the new Roth IRA custodian and sent to the Roth IRA owner for forwarding.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/moving-your-roth-account/

Weekly Market Commentary
Despite there being plenty for investors to consider, the holiday-shortened week ended pretty much where it started. Israel and Iran continued to exchange missile attacks, while global leaders tried to find a resolution to the conflict. President Trump opened the door to diplomacy throughout the week, but on Saturday sent US B2 bombers into Iran and bombed three nuclear facilities. The unprecedented move appears to have materially damaged the facilities and has likely set back Iranian efforts to enrich uranium for a nuclear weapon. It is too early to tell what Iran’s next move will be, but sharp rhetoric from Iran’s supreme leader assures some form of retaliation. This conflict will be at the top of investors’ minds as we enter the new trading week. Interestingly, trade has taken the back seat as we approach the tariff deadline.
The Federal Reserve’s decision to keep its policy rate at 4.25%—4.50% came as no surprise, and Chairman Powell’s press conference did little to move markets. The Fed’s Summary of Economic Projections, updated from March, showed the committee increasing its outlook on inflation and unemployment while decreasing its projections for GDP growth. The Fed now expects PCE to come in at 3% from 2.7% and for the Core reading to increase to 3.1% from 2.8%. Unemployment is expected to rise from 4.5% to 4.4%. GDP growth is expected to fall from 1.4% to 1.7%. The Fed still projects two twenty-five basis point cuts in 2025, with the market expecting the first cut in September. Notably, the Bank of Japan and Bank of England kept their policy rates at 0.50% and 4.25%, respectively.
The S&P 500 fell 0.2%, the Dow closed unchanged, the NASDAQ increased by 0.2%, and the Russell 2000 rose 0.4%. US Treasuries advanced across the curve. The 2-year yield fell by five basis points to close the week at 3.91%, while the 10-year yield declined by four basis points to close at 4.38%. Oil prices were volatile again, but they finished the week higher by only $0.67, closing at $73.83 a barrel. Oil is likely to have a significant bid to it once it opens. Some are calling for it to trade above $80 a barrel. Gold prices fell by 1.9% or $66.50 to close at $3385.80 per Oz. Copper prices were little changed at $4.83 per Lb. Bitcoin dropped to $100,000, down about $4,500 from the prior week. The US Dollar index had a 0.6% advance, closing the week at 98.70.
The economic calendar was pretty quiet. June Retail Sales were weaker than expected, coming in at -0.9% versus the estimate of -0.6%. The Ex-auto reading came in at -0.3% versus the forecast of 0.1%. Initial Claims fell by 5k to 245k, while Continuing Claims fell by 6k to 1945k. Housing Starts and Building Permits came in much weaker than expected. Housing Starts came in at 1256k versus 1356k, while Building Permits came in at 1393k versus the consensus of 1411k.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

8 Ways to Keep From Going Broke in Retirement
Budgeting, saving and investing tips to help make your money last as long as you do
No matter how diligently you’ve been saving for retirement, it’s hard not to worry about outliving your money. But you can take several steps to contain your expenses, manage your nest egg and invest wisely to help keep your savings from running dry
1. Be realistic about expenses
“A lot of people are not honest with themselves about how much they will spend in retirement,” says Linda Bentley Gillespie, founder of Real World Financial Planning in Newton, Massachusetts.
To get a general estimate, add up your regular expenses, like rent or mortgage payments, utilities, taxes and insurance, then figure out your variable spending. Sarah Behr, an investment adviser at Simplify Financial Planning in San Francisco, suggests adding up your costs for things like dining out, groceries, gas and vacations over the last six months, and calculating a monthly average. Using a spreadsheet or a budgeting app can also help you track those expenditures.
Be sure to factor in new expenses that might pop up in retirement, and any costs that might go away, Behr says. Will you be traveling more? Will you and your spouse still need two cars if you’re not commuting anymore? Will your mortgage be paid off?
2. See where you can save
Look for ways to reduce spending on the things you don’t really need so you will have enough to do the things you love in retirement.
For example, if your home is becoming too difficult to maintain, consider downsizing. Pay off high-interest debt, like credit cards and auto loans, and shop around for things like cheaper auto insurance. The little things add up, so examine your day-to-day costs as well. Maybe you can cancel one or two of your streaming services, or go out to dinner a few times less a month.
Even if you’ve been frugal over the years, think twice about any big splurges. Retirement may seem like the perfect time to hit the road in an RV or get a boat for your lake house, but big-ticket items like these — and the cost of maintaining them — can dig a deep hole in your savings.
3. Figure out the right withdrawal rate
Once you reach retirement age, odds are good that you’ll live another 20 years or more. You need to find the right balance between drawing down your savings for income and making the money last.
One long-standing rule of thumb is the 4 percent rule, which recommends withdrawing up to 4 percent of your investment portfolio in the first year of retirement, then adjusting the amount for inflation every year after that. So, if you retire with $1 million saved, you could take out $40,000 in the first year. The next year, if the inflation rate is 3 percent, you would withdraw $40,000 plus 3 percent, or $41,200.
A November 2023 Morningstar study found that a retiree following this method at an initial withdrawal rate of 4 percent or less had a 90 percent probability of having funds left after 30 years, assuming a balanced portfolio (such as 40 percent stocks and 60 percent bonds and cash) and returns that follow historical norms.
The 4 percent rule is a good starting point, but it’s important to stay flexible. “No one spends in a straight line,” Behr says, noting that retirees generally spend more at the beginning and the end of retirement, and less in the years in between.
4. Play catch-up
While it’s always best to start saving for retirement when you’re young, it’s never too late for older workers to play catch-up. Starting when you turn 50, the IRS lets you make larger “catch-up contributions” to retirement accounts. Doing so can significantly bulk up your nest egg, says Greg McBride, chief financial analyst at Bankrate.
For 2024, workers under age 50 can put up to $23,000 into a workplace retirement plan such as a 401(k) or 403(b), but those who are 50-plus can contribute up to $30,500. For an individual retirement account (IRA), the standard limit is $7,000, but 50-plus workers can make catch-up contributions of up to $1,000, for a total of $8,000.
5. Be strategic about Social Security
If you can afford to hold off taking Social Security until you reach age 70 (or at least your late 60s), your monthly checks will be appreciably bigger.
Retirement benefits are reduced if you take them before full retirement age (between 66 or 67, depending on the year you were born). That’s when you qualify to claim the full benefit calculated from your lifetime earnings record. If you can delay past that, you get an extra two-thirds of 1 percent per month, or up to 8 percent a year, until you hit 70.
“That is a benefit that is 24 percent higher than if you claim it at age 67,” McBride notes. So, if your full benefit would be $2,000 a month, claiming at 70 makes it $2,480. That’s an extra $5,760 a year (plus cost-of-living adjustments, or COLAs) for life.
6. Stay on top of your investments
When it comes to investing for retirement, you can’t just set it and forget it. “People should, over the course of their life spans, be reevaluating and making adjustments,” says Tyler Bond, research director at the National Institute on Retirement Security, a nonprofit research organization.
The conventional wisdom is that the older you get, the less risk you should take on, because you’ll have less time to recover if the market goes south. This means reducing your exposure to riskier assets, like stocks, in favor of more conservative assets, like bonds or cash.
Target date funds (TDFs), which rebalance your portfolio as you near retirement age, were created to help investors navigate these adjustments. But do your research before investing in one. “Not all target date funds are created the same,” says McBride. “Some are more aggressive, while some are more conservative.”
Also, steer clear of annuities and investment funds that charge high fees, Behr suggests. You can check fees for individual funds on the Financial Industry Regulatory Authority (FINRA) Fund Analyzer, which calculates how much fees and expenses will affect the value of a certain fund over time and allows you to compare the cost of owning different funds.
7. Don’t forget about health care costs
The average 65-year-old will need to devote roughly $165,000 of savings to health care expenses in retirement, according to a 2024 Fidelity study. A couple who are both 65 would need approximately $330,000.
One way to keep these costs from breaking your bank: Don’t retire until you’re eligible to enroll in Medicare at age 65. Staying on your workplace health plan (or your spouse’s) instead of relying on COBRA or buying private coverage could mean significant savings, McBride says.
During your working years, you may also be able to put funds into a tax-advantaged account like a health savings account (HSA). “You get a tax deduction on the money you put in while you’re working, the money grows without being taxed, and, when you withdraw it for health care-related expenses, you don’t pay taxes on the withdrawals,” McBride says.
The drawback to an HSA is that it often requires you to enroll in a high-deductible health plan. “That may be unaffordable for some people, or it may not be offered by your employer,” McBride says.
8. Consider a side hustle
One of the best ways to help ensure your nest egg will last as long as you do is to keep working. But hanging on to a full-time job well into your 60s or 70s is not always realistic, or particularly desirable.
To bring in extra income and let your investments keep growing, consider getting a part-time job doing something you enjoy. Not only will it keep money flowing in; it will also help you stay active and engaged.
If you want even more freedom and flexibility, consider a side hustle, says Robert Holzbach, a fee-only certified financial planner at Red Kennedy Financial in Littleton, Massachusetts. “An extra $10,000 a year can go a long way because you aren’t touching $10,000 in retirement savings, and you’re letting it compound.”
Holzbach suggests a few creative ways to make money, including hosting an exchange student, pet sitting or renting out your home on a site like Vrbo or Airbnb. Plus, you can often deduct the expenses for some of the income you bring in, he says.
“You can visit your grandkids for two weeks, rent out your home, and then you’re getting paid to play with your grandkids,” he says.
https://www.aarp.org/money/retirement/avoid-going-broke-after-retiring/
RMD Calculations and Qualified Charitable Distributions: Today’s Slott Report Mailbag
By Sarah Brenner, JD
Director of Retirement Education
Question:
I am age 85, and my wife is age 75. If I die first and my wife inherits my IRA, are the required minimum distributions (RMDs) that my wife must take after my death calculated using her age or my age?
Richard
Answer:
Hi Richard,
If your wife inherits your IRA, she can do a spousal rollover to her own IRA or keep the account as an inherited IRA. With either option, the RMDs will be calculated using her life expectancy. The IRS Uniform Lifetime Table is used if she does a spousal rollover. New rules under the SECURE 2.0 Act would allow her to use that table for an inherited IRA as well.
Question:
Good day folks! I have an old stretch inherited IRA and would like to do a qualified charitable distribution (QCD) with part of my RMD. Any problems with this idea?
Thank you, and I really enjoy the webinars!
Jim
Answer:
Hi Jim,
Glad you are enjoying Ed’s webinars!
Beneficiaries can do QCDs from inherited IRAs. However, the beneficiary must be age 70½ or older. If you qualify, you can do a QCD from your inherited IRA.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/rmd-calculations-and-qualified-charitable-distributions-todays-slott-report-mailbag/
Bad Advice Turns Me Into the Hulk
By Andy Ives, CFP®, AIF®
IRA Analyst
Before he transformed into the Incredible Hulk, Bruce Banner once said to his antagonist, “Don’t make me angry. You wouldn’t like me when I’m angry.” That’s a little how I feel when I hear stories about lazy financial professionals giving bad advice. Not that I’m about to turn green and rip through my clothes, but I do feel my blood start to boil.
A member of Ed Slott Elite IRA Advisor GroupSM (Elite Advisor) called me the other day with a frustrating story. He met a relatively young widow (age 55) and they discussed her financial situation. Her husband recently passed away, leaving his 401(k) valued at around $1 million. Another less experienced advisor had the widow move the 401(k) into an IRA in her name via spousal rollover. This is a perfectly acceptable transaction, but it was definitively the WRONG advice in this case. Why?
The Elite Advisor learned that the young widow needed some of the $1 million for daily living expenses. However, doing a spousal rollover eliminated her ability to withdraw from the IRA without a 10% early distribution penalty. Unfortunately, once a spousal rollover is completed, there is no going back. There is no transaction available to reverse what had been done. Adding to the misery, the other advisor told the widow that if she chose any other option, she would be forced to withdraw all $1 million within 10 years.
The Elite Advisor knew this was false. Just plain wrong. When he called to share the story and to see if there was a path forward…that’s when the Hulk inside me began to stir.
What was the proper guidance in this situation? Instead of doing a spousal rollover, the young widow could have established an inherited IRA. With an inherited IRA, all distributions avoid the 10% early withdrawal penalty. Yes, these distributions are taxable, but the widow would have had total access to all $1 million, free and clear of any penalty. Additionally, there would be no annual required minimum distributions (RMDs) from this account. Spouse beneficiaries are allowed to delay RMDs on an inherited IRA until the deceased spouse would have been RMD age. Finally, when the widow turned age 59½ in a few years, she could have then done a spousal rollover. There is no deadline to do a spousal rollover after first electing an inherited IRA. Since the widow would be over age 59½, the 10% early withdrawal penalty would no longer apply, so she could then move the inherited IRA into her own name.
Frustrated by the actions of a less knowledgeable professional, the Elite Advisor and I put our heads together. There was no unwinding the spousal rollover. There was no other 10% penalty exception to which the widow could qualify. The “emergency expense” exception ($1,000) would not be enough to meet her monetary needs. So, as the only option, the decision was made to implement a 72(t) substantially equal periodic payment program.
The Elite Advisor will properly install the payment program by splitting the IRA and leveraging the highest possible interest rate…but that is another story. For now, the young widow is in good hands. Recognize that not all financial professionals are created equally. Some are superheroes, here to serve, with superior training, experience and knowledge. Seek them out.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/bad-advice-turns-me-into-the-hulk/
Are My SEP and SIMPLE IRAs Safe from Creditors?
By Ian Berger, JD
IRA Analyst
You are not alone if you have concerns that your IRA or workplace plan savings could be lost if you are forced to declare bankruptcy or wind up on the losing end of a civil lawsuit. After all, we all count on those savings for a financially secure retirement. Fortunately, there is usually some degree of creditor protection for retirement accounts. Unfortunately, that doesn’t seem to be the case for SEP and SIMPLE IRA plan funds. Those accounts may not always be protected against creditors.
Let’s start with the good news. If you must declare bankruptcy, your SEP and SIMPLE IRA accounts can’t be reached by bankruptcy creditors. That’s because the federal Bankruptcy Code provides a complete shield for those funds. Traditional and Roth IRAs are also protected under the Bankruptcy Code, but that law imposes a dollar limit on the amount of IRA funds that are free from creditors. That dollar limit is indexed every three years based on the cost-of-living. On April 1, 2025, the dollar limit increased from $1,512,350 to $1,711,975, effective through March 31, 2028. Importantly, this dollar limit does not take into account amounts rolled over from employer plans like 401(k)s.
Unfortunately, the news is not as good for SEP and SIMPLE IRAs when non-bankruptcy creditors come after those funds after winning a lawsuit. Many workplace retirement plans are shielded from these creditors because the plans are covered by the federal ERISA law, which usually provides rock-solid protection.
SEP and SIMPLE IRAs are technically considered ERISA retirement plans. So, what’s the problem? The problem is that ERISA denies those plans the complete protection against general creditors that it gives to other employer plans. (The language in ERISA is not crystal-clear, but that’s how courts have interpreted it.)
Some states have their own laws intended to provide a state shield against general creditors trying to reach SEP and SIMPLE IRA accounts. That would seem like another way to protect those monies from non-bankruptcy creditors. But, again, no luck. ERISA has a provision that says, for ERISA-covered plans, any state law that “relates to” ERISA retirement plans is disallowed. (The fancy word is “preempted.”) State creditor protection laws clearly “relate to” SEPs and SIMPLEs, which are ERISA plans.
So, when it comes to non-bankruptcy creditor protection, SEP or SIMPLE IRA owners may be stuck between a rock and a hard place. They do not have federal protection because ERISA has a carve-out for SEP and SIMPLE IRA plans. And they don’t have state protection because state creditor protection laws apparently cannot apply to ERISA plans like SEPs and SIMPLEs. This was exactly the conclusion of a 2002 federal appeals court decision (Lampkins v. Golden) that covered residents of Kentucky, Michigan, Ohio and Tennessee. There haven’t been any similar court decisions covering residents of other states, but those residents also may be out of luck.
What to do? If you have a SEP or SIMPLE IRA and are concerned about creditors, consider moving those funds to an IRA, where you will likely receive at least some state creditor protection. Owners of businesses with SEPs or SIMPLEs who have creditor concerns may want to consider terminating those plans in favor of 401(k)s, where again the funds will likely be better protected.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/are-my-sep-and-simple-iras-safe-from-creditors/

A Loved One Died and Left You an Inheritance. Now What?
Take these steps when you receive a windfall
Perhaps you are among the growing number of Americans fortunate enough to receive an inheritance. As older generations pass away and leave money to their families, a great wealth transfer is underway. Those bequests could total $100 trillion by 2048, according to Cerulli Associates, a financial consulting firm.
If you’re among those in line to receive an inheritance, there’s more good news: You generally won’t owe taxes on it. Although the IRS levies a tax on very large estates — more than $13.99 million in 2025 — individuals generally do not pay federal income taxes on assets they inherit. And only five states (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) charge an inheritance tax, according to the Tax Foundation.
Still, there may be challenges in managing your windfall. “For people who may be dealing with the loss of a loved one, it can be difficult to understand the tax rules or think about how the gift fits into your long-term plan,” says Marguerita Cheng, a certified financial planner (CFP) in Gaithersburg, Maryland. To help you sort out your options, here are tips for five major types of inherited assets.
1. Cash, stocks and other taxable accounts
A cash gift is the most straightforward form of inheritance. It’s simple to turn around and invest — or spend — the money as you like, and it isn’t considered taxable income. There is one caveat, however. “If interest is paid on the cash before it’s distributed to you, that amount may be taxable,” says Mary Kay Foss, a certified public accountant (CPA) in Carlsbad, California.
If you inherit investment assets, such as stocks or bonds, you will receive what’s called a “step-up in basis,” which resets the value to the price on the day of the owner’s death. Say your dad purchased Amazon stock 20 years ago at $2 a share, and you’re receiving it now at its current price, recently $175 a share. You can sell the investment right away and pay little or no capital gains taxes, says Foss. If you wait to sell, you’ll owe taxes on any future gains when you do.
Whatever type of asset you receive, take your time before making an investment decision. “You’ll want to make sure you use that money in a way that helps you reach your financial goals,” says Cheng. Consider consulting a financial planner; many work on an hourly basis or for a flat fee. (You can search for one on the CFP board’s website.)
2. Retirement accounts
Tax rules for inherited IRAs and 401(k)s can be tricky. According to new IRS requirements, most non-spouse beneficiaries must empty an inherited traditional IRA within 10 years of the owner’s death. Exceptions include surviving spouses, chronically ill individuals and people with disabilities, who can stretch distributions over their lifetime. If you’re a non-spouse beneficiary, you’ll need to set up an inherited traditional IRA in your own name, where you can directly transfer the funds from the original account. (Surviving spouses can transfer the funds to a new account or use an existing traditional IRA account.) You’ll owe income taxes on any withdrawals.
Be aware, if the original account owner died before the starting date for required minimum distributions (RMDs), the beneficiary can wait until year 10 to pull money out. To empty the account by year 10, however, you may want to withdraw some each year. If you wait until the last year, you could end up with a big tax bill.
If you inherit a Roth IRA and you’re a non-spouse beneficiary, you face the same time limit: You must empty the account by year 10. But spouses who inherit Roth IRAs have several options, including designating themselves as the account owner and taking RMDs over their lifetime. Roth distributions are not taxed.
Surviving spouses could also put the money into their own 401(k) or IRA, roll the funds into an inherited IRA or take a lump-sum distribution. If you take a lump sum distribution, you won’t incur an early withdrawal penalty, but the money will be taxed as ordinary income, which could push you into a higher tax bracket.
For any of these assets, consider working with a tax professional to help you understand your options and avoid penalties.
3. Real estate
You may find that you’ve inherited real estate, such as a family home. You might be able to benefit from a step-up in basis if you sell the home, since the value of the property resets to its fair market value when the owner dies. Say the house that your grandfather bought originally cost $100,000, but today it’s worth $500,000. You could sell the home right away for that amount without incurring a capital gains tax, says Kevin Hegarty, a CFP in Garden City, New York. If the value rises before the sale closes, though, you’ll owe taxes on any increase.
There are special tax rules for a surviving spouse. You have the option of selling the house within two years from the date of your spouse’s death and claiming a $500,000 exclusion. After that, you can only apply your half of the exclusion, or $250,000, but half the house will receive a step-up basis. (In community property states, both halves receive the step up.)
Taxes aren’t the only costs to consider. You’ll need to maintain the house, as well as pay bills for insurance and property taxes. And if the property is co-owned by other family members, be sure to reach an agreement about its sale or use, Hegarty recommends.
4. Life insurance and annuities
For those who receive a life insurance death benefit, the amount is generally not taxable. (One exception: If you receive the payout in installments, rather than a lump sum, you may have to pay tax on any interest earned on the principal.) And if you live in one of the handful of states with an inheritance tax, it will generally not apply, since a life insurance policy is typically considered separate from the estate, says Mark Luscombe, a CPA and principal analyst at Wolters Kluwer Tax & Accounting.
If you inherit an annuity, the tax rules depend on several factors, including the type of annuity, how it was funded, and whether it was purchased through a retirement account. Given the complexity, Foss says, it’s best to talk to a financial adviser with expertise in these products before you make any decisions.
5. Personal items
For most families, a major part of a loved one’s estate is the deceased’s personal possessions, everything from furniture to clothing to jewelry. “All of these possessions could have emotional value, if not financial value,” says Sonya Weisshappel, CEO of Seriatim, a firm that provides organizing and estate clearing services.
Figuring out what to do with these items can be daunting. To simplify the process, work with your family members to identify the pieces they wish to keep. The rest could be sold, donated or perhaps recycled. And don’t forget to preserve or digitize records of family history, such as photo albums and recipes.
If there are items that may be valuable, like jewelry or antique furniture or artwork, consider seeing an appraiser. “You probably want a generalist who can look at different categories of items,” says Weisshappel. To find one, you can search online directories for the Appraisers Association of America or the American Society of Appraisers, or get a referral from a local auction house. That way, whether you intend to sell the items or keep them in the family, you’ll have a clear idea of their market value.
As for the tax implications if you choose to sell some of the items? You don’t have to disclose any money you make on items that you sell for less than what the deceased person paid for them. And since the federal inheritance tax exemption is $13.99 million in 2025, unless you inherit and sell something incredibly valuable, you likely won’t owe taxes.
https://www.aarp.org/money/personal-finance/inheritance-next-steps/
IRA Transfers and Qualified Charitable Distributions: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
Hello,
I have two IRA annuities with different insurance companies. One of my annuities is maturing and I would like to transfer it upon maturity to a different insurance company. Do I need to take my 2025 required minimum distribution (RMD) from the current insurance company prior to transferring the funds to a new insurance company offering a higher rate, or can I take it after the transfer?
Thanks
Mary
ANSWER:
Mary,
There are two ways to move IRA money between custodians. One is via 60-day rollover. With a 60-day rollover, the funds are paid directly to you for delivery to the other firm. RMDs cannot be rolled over. So, if you proceed with moving the money as a 60-day rollover, the RMD must be retained before the rest of the balance can be rolled over. The second (and safer) way to move money is by direct transfer. With a direct transfer, the funds are sent directly to the receiving custodian. (A check made payable to the receiving insurer that is sent to you for delivery also qualifies as a direct transfer.) With a direct transfer, you can move the entire IRA and then later withdraw the RMD from the new custodian/insurance company. However, some insurance companies apply their own internal rules when it comes to transferring IRA money, so be sure to verify with the insurance provider on how to best proceed.
QUESTION:
I am 71 years old and am picking up a part-time job. I have nothing in an IRA currently. Can I contribute to an IRA at this age? If so, can I then do a qualified charitable distribution (QCD) from this IRA account?
Thanks!
Tim
ANSWER:
Tim,
If you have taxable earned income from this part-time job, then yes, you can contribute to an IRA. There are no age restrictions for IRA eligibility. Once the funds are in the IRA, you can then complete a QCD. However, BE CAREFUL! You cannot take a deduction for the IRA contribution and also receive the benefits of a QCD. The IRS considers this double dipping and would require you to offset (make taxable) a portion of the QCD equal to the amount deducted for the IRA contribution. A better idea might be to contribute to a Roth IRA and make a separate (non-QCD) donation to the charity.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/ira-transfers-and-qualified-charitable-distributions-todays-slott-report-mailbag/
When You SHOULD Name a Trust as IRA Beneficiary
By Sarah Brenner, JD
Director of Retirement Education
Here at the Slott Report we hear many stories about trusts being named as IRA beneficiaries and the problems that follow. Often, there seems to be no purpose for naming the trust and it brings unnecessary complications. Trusts won’t help with income taxes. In fact, they can increase the tax hit because IRA funds may be subject to high trust tax rates.
Naming a trust is not something that should be done without a clear purpose. Here are six good reasons to name a trust as an IRA beneficiary:
- Minor Beneficiaries. When there are minor children involved, naming a trust can be a good plan. Having a minor be named directly on a beneficiary form is a recipe for disaster because a minor cannot legally conduct business on the account. It may be possible in some cases to name a Uniform Trust for Minors (UTMA) or Uniform Gift to Minors (UGMA) account as an IRA beneficiary, but not all custodians allow this. Also, these accounts don’t offer the ability to control funds after the minor reaches the age of majority the way a trust can. Especially with larger IRAs, when minors are involved, naming a trust as the beneficiary may be necessary.
- Special Need Beneficiaries. For special needs beneficiaries, a trust is essential to manage money and to protect government benefits when IRA funds are inherited. A special needs trust drafted to comply with the SECURE and SECURE 2.0 rules can still use the stretch instead of the 10-year rule, allowing payments to be paid out over the life expectancy of the special needs beneficiary.
- Substance Abuse Issues. No IRA owner would want to see their life’s savings support a beneficiary’s drug problem or gambling addiction. By naming a trust as beneficiary, instead of naming a beneficiary with substance abuse issues directly on the account, controls can be put in place to ensure this does not happen.
- Vulnerable Beneficiaries. There is no shortage of con artists and scammers looking to take advantage of vulnerable or naïve beneficiaries with large inheritances. To protect these individuals, naming a trust as the IRA beneficiary can be extremely useful for limiting access and warding off those with malicious intent.
- Divorce Concerns. While most people love their children and grandchildren, they may not feel as warmly towards the people their offspring marry. There may be concerns about money ending up in the wrong hand if marriages go south and there is divorce. A trust named as an IRA beneficiary can alleviate these concerns.
- Creditor Protection. Inherited IRAs are not protected under federal law either in bankruptcy or from other creditors. There is some protection under state laws, but this can vary. A trust can help shield IRA funds from the beneficiary’s creditors.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/when-you-should-name-a-trust-as-ira-beneficiary/
Fixing a Converted RMD…and the Tax Reporting
By Andy Ives, CFP®, AIF®
IRA Analyst
We know that required minimum distributions (RMDs) cannot be rolled over or converted. Before a person does any Roth IRA conversions, all of their IRA RMDs must be satisfied. (See this prior Slott Report post: “New Rule: All IRA RMDs Must Be Satisfied Prior to Doing a Roth Conversion.”)
But what if an RMD does get erroneously converted? Is there a fix? Yes.
Before we discuss the “fix,” note that there is often a misconception that a converted RMD is a missed RMD. This is not the case. The RMD was taken from the traditional IRA, so no 25% penalty for missing the RMD would apply. Instead, a converted RMD is technically an excess contribution in the Roth IRA, so we follow the excess contribution correction rules. The deadline to fix an excess contribution with no penalty is typically October 15 of the year after the year of the excess. That means that an excess contributions made in 2024 can be corrected with no 6% penalty up until October 15, 2025. If the deadline is missed, then the 6% penalty will apply for every year the excess remains in the account as of December 31. (For example, an excess contribution made in 2024 that is identified and corrected in November of 2025 will have a 6% penalty for 2024 only, because the excess was in the account on December 31, 2024, but removed by December 31, 2025.)
What about the earnings on the excess contribution while it was illegally in the IRA? Again, we look to the same October 15 deadline in the year after the year of the excess. If the excess contribution is corrected PRIOR to the deadline, the earnings attached to that excess (the “net income attributable,” or “NIA”) must also be removed. If the excess is corrected AFTER the deadline, the NIA (the earnings) can remain in the account. (This is a little odd, but true.)
So, let’s get back to the erroneously converted RMD. In our scenario, the account holder has identified his mistake prior to the October 15 deadline. As such, he is required to remove the excess amount, plus the NIA. Where does he go next?
IRS Publication 590-A provides a worksheet to calculate the earnings on an excess contribution (in this case, on the erroneously converted RMD). The NIA formula is not complicated. You will need to know the account balance immediately before the excess was contributed and the balance on the day the excess is withdrawn. The NIA is determined based on the performance of the entire IRA, not just the investment where the excess was placed. (For example, saying the excess contribution was “sitting in a cash position” within the IRA while the rest of the portfolio skyrocketed does NOT allow the account owner to minimize the NIA.)
Once the NIA is determined, the excess (in this case, the converted RMD) and the NIA must be withdrawn and labeled as an “excess contribution withdrawal.” This will ensure proper coding on the Form 1099-R. Since this correction was made prior to the October 15 deadline, there is no 6% penalty and no need to file any special tax forms (i.e., no Form 5329). However, the earnings will be taxable. How will the taxpayer know what the taxable NIA is? The 1099-R will report a gross distribution in Box 1, and a taxable amount (the NIA) in Box 2a.
A converted RMD is not the end of the world if it is promptly identified and corrected.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/fixing-a-converted-rmdand-the-tax-reporting/

Weekly Market Commentary
US markets advanced in an erratic week of trading. The S&P 500 ended the week above the 6000 level and is up nearly 24% from the April 7th lows. Investors continue monitoring global trade policy, hoping more trade deals will be signed soon. Trump acknowledged that China’s President Xi is “extremely tough and extremely difficult to make a deal with”. The two leaders spoke late in the week and agreed to send trade delegations to London to resume negotiations. President Trump is sending Treasury Secretary Bessent, Commerce Secretary Lutnick, and Trade Representative Greer to meet with the Chinese delegation. In other trade news, it is rumored that a trade deal with India is close and that negotiations with Japan have hit a few snags. There were also plenty of headlines throughout the week regarding the reconciliation bill. A fallout between President Trump and Elon Musk became apparent as both sent barbs over social media. Musk called the bill in its current form a “disgusting abomination” and called for lawmakers to kill the bill. The sharp rhetoric hit shares of Tesla stock, which lost nearly 150 billion in market capitalization on Thursday. Threats of curtailed government contracts to Tesla remain a concern for several investors who have invested in Musk’s companies. A mixed bag of economic data increased volatility in the rates markets and pushed out the probability of Fed rate cuts. Notably, the European Central Bank cut its monetary policy rate by twenty-five basis points. The move was widely expected. ECB President Lagarde said the central bank expected Eurozone inflation to continue to moderate and expected inflation in 2026 to be 1.6%.
The S&P 500 gained 1.5% and, as I mentioned earlier, eclipsed the 6000 mark for the first time since late February. It is now up 2%for the year. The Dow rose 1.7%, the NASDAQ increased by 2.18%, and the Russell 2000 gained 3.19%. The mega caps and semiconductors led the market higher for the week. Circle, a company specializing in Stablecoins, held its IPO and was up nearly 169% on its first day of trading. US Treasuries endured a volatile week but ended with losses. The front end and the belly of the curve took the brunt of the sell-off as investors recalibrated rate cut expectations. The 2-year yield increased by fourteen basis points, while the 10-year yield rose by twelve basis points to 4.51%. Despite OPEC+ announcing it would increase daily production by 411k barrels, oil prices gained. West Texas Intermediate prices increased by $3.83 or 6.3% to close at $64.59 a barrel. Gold prices increased by $30.70 to close at $3,346.40 per ounce. Copper prices closed the week $0.15 higher at $4.85 per Lb. Bitcoin’s price had a volatile week but was trading up $500 from a week ago. The Dollar index traded lower by 0.15 to close the week at 99.18.
The Economic calendar was full this week and produced some very interesting mixed signals about the economy. ISM Manufacturing fell deeper into contraction with the May figure moving to 48.5 from 48.7 in April. ISM Services also showed contraction coming in at 49.9 from 52 in April. This is only the fourth time in 5 years that ISM Services has been in contraction and portends a weaker economic outlook. Q1 Productivity declined by 1.5% while Unit Labor costs ticked higher by 6.6%. On the labor front, Jolts data saw job openings increase to 7.391m from the prior reading of 7.2m. ADP Employment Change saw an increase of just 37k, while the street was looking for an increase of 99k. Initial Claims ticked higher by 8k to 247k, while Continuing Claims decreased by 3k to 1.904m. The Employment Situation Report came in better than expected, which helped to boost market sentiment and recalibrate Fed rate cut expectations. Non-Farm Payrolls increased by 139k versus the consensus estimate of 125k. Private payrolls increased by 140k versus the expected estimate of 120k. The Unemployment rate stayed at 4.2%. Average Hourly Earnings increased by 0.4% versus the estimated 0.3%. The Average Work Week stayed at 34.3hours. All that said, the takeaway is that it appears the economy is slowing but not falling off a cliff, and that the labor market continues to be resilient. In the coming week, we will get a look at Consumer and Producer inflation data and a first look at June’s Consumer Sentiment.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

Retirement age change 2025: What it means for your Social Security benefits
A quiet but important shift is happening in 2025: the full retirement age for Social Security is increasing again. If you were born in 1959, the change affects you directly—and if you were born in 1960 or later, you’re next.
Here’s what this change means for your benefits, your retirement plans, and your bottom line.
What is full retirement age?
Your full retirement age (FRA) is the age at which you’re eligible to receive your full, unreduced Social Security retirement benefits. While many people still assume FRA is 65, that’s no longer the case.
In 1983, Congress passed legislation to gradually raise the retirement age due to longer life expectancies. The FRA has been increasing slowly ever since.
For example:
- People born in 1957 reached FRA at 66 years and 6 months
- People born in 1958: 66 years and 8 months
- People born in 1959: 66 years and 10 months (takes effect in 2025)
- People born in 1960 or later: 67 years
What changes in 2025?
Starting in November 2025, Americans born in 1959 will hit their new full retirement age: 66 years and 10 months.
This is part of the final step in the multi-decade rollout that began in the 1980s. After this change, only one increase remains—bringing FRA to 67 years for those born in 1960 and beyond.
If you’re turning 66 this year and planning to claim, be aware: you may need to wait several additional months to avoid a reduced benefit.
Can I still claim Social Security at 62?
Yes. The earliest you can start receiving Social Security retirement benefits is age 62, but it comes with a permanent reduction—about 30% less than if you had waited until your full retirement age.
This trade-off can make sense for those retiring early due to health issues, layoffs, or personal preference. But it’s important to understand that claiming before your FRA locks in that lower benefit for life.
Even claiming a few months early—say, at 66 and 9 months instead of 66 and 10—results in a slightly smaller monthly payment.
Why is the retirement age increasing?
The Social Security retirement age is rising because people are living longer and drawing benefits for more years. According to the Social Security Administration, the law passed in 1983 aimed to maintain the program’s long-term stability as longevity improved.
This change affects:
- Younger baby boomers (born 1959–1964)
- Generation X (born 1965–1980), who face an FRA of 67
- Future retirees already facing savings shortfalls
How does this affect benefit amounts?
Let’s compare the impact of timing:
- Claiming at FRA in 2025: Max monthly benefit is $3,822
- Claiming early at 62: Max monthly benefit drops to $2,710
- Waiting until 70: Benefits can increase up to 25% more than FRA (over $4,700/month)
Despite these incentives, only 4% of retirees wait until 70 to maximize benefits, according to the Transamerica Center for Retirement Studies.
A growing retirement readiness gap
The final shift to FRA 67 will mostly affect younger boomers and Gen Xers—two groups struggling with savings.
- About 1 in 3 younger boomers (born 1959–1965) will rely on Social Security for 90% or more of their income in retirement
- The average Gen X household has saved just $150,000, far below the estimated $1.5 million needed for a comfortable retirement
- About 40% of Gen Xers have no retirement savings at all
With Social Security designed to replace only about 40% of your income, these numbers highlight a looming retirement crisis.
What should you do now?
Whether you’re already eligible or still planning for retirement, here are key action steps:
- Use the SSA retirement age calculator to find your FRA
- Check your personalized benefit estimate through your My Social Security account
- Consider delaying your claim if financially possible to increase your monthly payout
- Consult a retirement advisor if your savings plan doesn’t match your retirement timeline
KEY TAKEAWAYS
- The full retirement age rises to 66 years and 10 months in 2025 for those born in 1959
- FRA will reach 67 for people born in 1960 and later
- Claiming before FRA reduces your monthly benefit permanently
- Millions of Americans, especially Gen Xers, face serious retirement savings shortfalls
- Planning when to claim Social Security could significantly impact your financial future
https://www.fingerlakes1.com/2025/05/09/retirement-age-change-2025/
Roth Conversions and HSA Distributions: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
Recently, I’ve received dozens of emails suggesting that traditional IRA owners can convert to a Roth IRA and somehow avoid all or some tax. Is this a scam?
Thank you in advance.
Bill
Answer:
Hi Bill,
There is no way for traditional IRA owners to avoid having funds converted to Roth IRAs count as taxable income in the year of conversion. The schemes that are being marketed do not mention that fact. Instead, a typical scheme entices individuals to put their money into investments that supposedly will produce enough deductions to offset the Roth conversion taxable income. That way, the Roth conversion will be “tax-free.” Our advice is to tread carefully. Do not take the bait without speaking to a knowledgeable financial advisor.
Question:
Hello,
I understand that I can take Health Savings Account (HSA) distributions in a year other than the year that I incurred a qualified medical expense. There is confusion and conflicting opinion, however, on what that distribution can be used for. Must it be for a qualified medical expense to be tax and penalty free? For example, if I paid $4,000 out of pocket for various qualified medical expenses in 2022, may I take a tax- and penalty-free distribution of $4,000 from my HSA in 2025 to go on vacation? I have the receipts as proof of paying out of pocket for the 2022 medical expenses. Wouldn’t the $4,000 distribution just be reimbursing myself and I can use the money as I choose?
Thank you.
Caroline
Answer:
Dear Caroline,
You are correct. Often, HSA funds are used to pay qualified medical expenses directly. However, that is not required. Instead, you could first pay for those expenses out of pocket and then have the HSA reimburse you — even in a later year. You could then use the reimbursed money for any reason. If you do that, make sure to retain good records of the medical expense and proof of your payment. This will establish that the HSA distribution should not be taxable or subject to penalty in case you are questioned by the IRS.
https://irahelp.com/slottreport/roth-conversions-and-hsa-distributions-todays-slott-report-mailbag/

Weekly Market Commentary
-Darren Leavitt, CFA
The holiday-shortened week was busy. Trade uncertainties continued to be on investors’ minds, with several trade stories hitting the tape throughout the week. News on Tuesday that President Trump had extended the timeline for negotiations with the EU until July 9th catalyzed global markets higher. News that the US Court of International Trade had ruled against President Trump’s legal authority to impose and enforce reciprocal tariffs, and the subsequent ruling by the US Court of Appeals to temporarily reinstate the tariffs kept investors guessing what would come next on the trade front. On Friday, Trump accused China of violating the preliminary trade agreement with the US and then threatened to impose additional technology-related sanctions on China. The President later said he looked forward to speaking with China’s President Xi and was hopeful things could be worked out. Treasury Secretary Bessent is scheduled to meet with the Japanese trade delegation in the next few days.
Earnings from NVidia were solid and helped to push shares higher, but the stock fell later in the week off the announcement of further technology bans on China. Costco had a great quarter, while Best Buy and Salesforce.com had disappointing quarters.
The S&P gained 1.9%, the Dow added 1.6%, the NASDAQ advanced by 2%, and the Russell 2000 increased by 1.3%. US Treasuries found some reprieve this week as 2, 5, and 7-year auctions were met with solid demand. The 2-year yield fell by eight basis points to 3.92%, while the 10-year yield decreased by nine basis points to 4.42%. When yields decline, bond prices increase. US Treasuries were also bolstered by the announcement that Japan may decrease its issuance of its ultra-long JGBs. WTI oil prices fell by 1.57%, closing at $60.79 a barrel. Crude prices have fallen by 15.42% since the beginning of the year. Gold prices are up 25.53% year to date and gained 0.55% on the week, closing at $3,315.40 an ounce. Copper prices fell 3.34% on the week to close at $4.70 per Lb. Bitcoin prices fell by $4k to $104,836. The Dollar index gained 0.33% to close the week at 99.33.
The economic calendar was stacked with a mixed bag of results. The Fed’s preferred measure of inflation, the PCE, showed continued progress on the inflation front. Headline and Core PCE came in line with expectations at 0.1%. On a year-over-year basis, the headline number declined to 2.1% in May from 2.3% in April, while the Core reading fell to 2.5% from 2.7% in April. Personal Income came in better than expected at 0.8% versus the estimated 0.3%. Personal Spending was in line with the consensus estimate of 0.2%. Sentiment and Confidence data showed a bit of an uptick. The Consumer Confidence index was 98, higher than the 85.7 reported in April. The final reading of the University of Michigan’s Consumer Sentiment Index increased to 52.2 from the prior reading of 50.8. Both of these upticks could be attributed to the reprieve on tariffs. The 2nd look at Q1 GDP was revised to -0.2% from -0.3%. However, a revision in the Personal Spending figure to 1.2% from 1.8% caused concerns about the consumer curbing their spending. Finally, Initial Jobless Claims increased by 16k to 240k, while Continuing Claims increased by 26k to 1.919M.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
Inherited Roth IRAs and IRA Transfers: Today’s Slott Report Mailbag
By Sarah Brenner, JD
Director of Retirement Education
Question:
Hello,
I have a question concerning inherited Roth IRAs. I know that in the past you have said that no annual required minimum distributions (RMDs) are required for these accounts. Does this include Roth IRAs that were inherited prior to the SECURE Act changes?
There is so much confusion about Roth IRA RMDs, so I wanted to be sure.
Thank you!
Answer:
You are right that there is a lot of confusion about when annual RMDs are required from inherited Roth IRAs! We often get questions on this topic.
If a Roth IRA was inherited prior to 2020 (before the SECURE Act), and the beneficiary was taking distributions over their life expectancy, those annual distributions must continue. Similarly, if a Roth IRA is inherited in 2020 or later and the beneficiary is an eligible designated beneficiary who is taking RMDs over his life expectancy, annual RMDs would be necessary.
However, if the Roth IRA beneficiary is subject to the SECURE Act’s 10-year rule, no annual RMDs are required during years 1-9 of the 10-year period.
Question:
Our client is age 78, and she has not taken her 2025 required minimum distribution (RMD) from her IRA yet. Can she transfer this IRA to a new institution without taking the RMD first?
Answer:
Yes, your client can go ahead and transfer the IRA to a new institution without first taking her 2025 RMD. There is a rule that says when an IRA owner does a 60-day rollover, the RMD must be taken prior to the rollover. However, this rule does not apply to direct transfers of IRA funds. She can transfer the entire amount. She just will need to remember to take her 2025 RMD from the new institution by December 31, 2025.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/inherited-roth-iras-and-ira-transfers-todays-slott-report-mailbag/
Misconceptions About the Still-Working Exception
By Andy Ives, CFP®, AIF®
IRA Analyst
Regardless of the topic, we could all use an occasional refresher. Retirement account rules are incredibly complicated, and we all have our blind spots. Even seasoned financial advisors with extensive client lists can overlook certain details. I had a conversation recently with a respected professional who was operating on a misconception regarding the still-working exception. Fortunately, we were able to identify the oversight and make the necessary corrections. But the conversation confirmed, once again, that understanding the rules is paramount to success.
For those who have 401(k) or other employee retirement plan funds, the required beginning date (RBD) for starting required minimum distributions (RMDs) is the same April 1 as for IRA owners, unless they are still working for the company where they have the plan. If they do not own more than 5% of the company in the year they reach their RMD age and the plan allows, workers can delay their RBD to April 1 of the year following the year they finally retire. This is called the “still-working exception” to the RBD, but it only applies to RMDs from employer plans. It does NOT apply to IRAs or IRA-based work plans like SEPs and SIMPLEs. It also does not apply to employer plans if the individual is not currently working for that company.
The first misconception about the still-working exception is about the date when a person retires. A worker must be employed for the entire year for the exception to apply for that year.
Example: Mary, age 75, has an IRA and a 401(k) plan and is still working for the company that sponsors the 401(k). She never owned more than 5% of that company. Mary can delay distributions from her 401(k) until April 1 of the year following the year she retires. (The exception does not apply to her IRA.) Mary leaves her job after working her last day on December 31, 2025. She thinks that since she worked the “full year,” she has “retired” in 2026 and therefore can avoid taking the 2025 RMD from her 401(k). Such is not the case. It appears that retiring on December 31 is not good enough when it comes to the still-working exception and delaying RMDs. The RMD will be due for that same year for anyone whose last day of work is December 31. In the case of the still-working exception, it behooves a worker to hang on for one more day and “retire” on January 1.
Another misconception about the still-working exception is how an RMD can apply “retroactively.” If a person is leveraging the still-working exception and, therefore, has no RMD to worry about, that worker can roll over his entire 401(k) to an IRA (assuming the plan allows for in-service distributions). However, if the worker is laid off later that same year, or if he abruptly retires for whatever reason, then the RMD applies for that year. If he already did a full rollover of the plan assets to an IRA that same year, then this springing “retroactive” plan RMD is now an excess contribution in the IRA. This is not the end of the world as there is a relatively easy fix: remove the excess contribution (the plan RMD) from the IRA, plus any earnings attributable to those dollars. There is no penalty if the error is corrected by October 15 of the year after the year of the excess (although the earnings will be taxable).
Be careful with the still-working exception. The governing rules can be sneaky.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/misconceptions-about-the-still-working-exception/
Backdoor Roth Conversions and IRA Losses: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
Thank you for all you do to educate the public. I’m hoping you guys can settle a debate that’s been going on with a few financial advisors and CPAs regarding the 5-year rule for Roth IRA conversions. I was under the impression that a non-taxable conversion can be withdrawn at any time, even within 5 years of the “backdoor” contribution/conversion, without a 10% penalty.
My personal CPA is adamant that the 10% penalty would apply to a withdrawal of the backdoor conversion amount, but I don’t see why, or where that opinion is supported. Can you please help settle this debate? Thanks again for all you do.
Tyler
ANSWER:
With a backdoor Roth IRA conversion, a non-deductible contribution is made to a traditional IRA, and those dollars are subsequently converted. Yes, there is a 5-year clock before converted pre-tax dollars are available for withdrawal penalty-free for anyone under age 59½. However, after-tax dollars that are converted are never subject to the 10% penalty, regardless of when they are withdrawn. Be aware that there are distribution ordering rules within the converted dollars “tranche.” Pre-tax converted dollars come out first (the ones potentially subject to penalty), with converted after-tax dollars (no penalty) coming out next.
QUESTION:
Dear Slott Report,
I have a self-directed Roth IRA. I invested in a partnership that, during the Covid pandemic, went bankrupt. I lost all the money. Is there a way to distribute these losses to myself to add to my taxes? My CPA says no, but I wanted another opinion.
Thank you,
Joey
ANSWER:
Joey,
Sorry to hear about the investment loss. Your CPA is correct. Losses within a traditional or Roth IRA cannot be distributed or used to offset any gains or other tax liability.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/backdoor-roth-conversions-and-ira-losses-todays-slott-report-mailbag/

10 Things Retirees Should Stop Spending On Now
Say goodbye to second cars, warehouse stores and other no-longer-necessary expenses
Retirement is a time to rethink some things: how we fill our hours and days, what we do for fun and fulfillment. And, maybe, all that stuff we’ve been spending money on for years.
You may have needed that stuff back then, for family or work. But you’re not going to the office anymore, and the kids have moved out (probably). Now is the time to take a hard look at some of the goods and services you buy and decide which ones you really need (or which ones have cheaper alternatives). Here are 10 things to consider culling from your retirement budget.
1. New clothes and accessories
If you were a white-collar worker, it’s a good bet your closets and dressers are packed with office attire collected over decades. You hardly need this stuff anymore, let alone more of it.
If you do want to supplement your wardrobe, smart-shopping expert Trae Bodge recommends skipping boutiques and department stores in favor of second-hand shops. To save even more, she says, “shop your closet” — it’s probably full of clothes you rarely or never wear that can feel new when you dig them out.
Bodge does something like this twice a year, seasonally switching out clothes from her closet. “Inevitably, I find things I forgot about,” she says. “I can hide some from myself one winter and feel like I have a new wardrobe the next winter.”
2. Pricey gifts
Buying birthday and holiday gifts for your grandchildren may give you as much pleasure as it gives them, and we’re not suggesting you stop. But retirement might be a “time to dial that way back,” says Bodge.
Consider being a little less lavish in your giving, especially as the grandkids get older and it gets harder to know what to get them. Rather than buying something expensive that might fall flat, Bodge recommends giving gift cards or a modest amount of cash so they can get what they want.
Such giving doesn’t have to be generic. Shopping sites such as Gift Card Granny, PerfectGift.com and Giftcards.com let you create personalized gift cards adorned with a memorable photo—perhaps one from a vacation you took with your grandchild—and a brief message.
3. Collectibles
Many retirees have amassed collections from once-keen hobbies that now sit around taking up space. How much time do you spend cataloging those rare coins, rearranging the Hummel figurines or playing with your toy trains? Do you really need any more of them?
Let retirement be a time to stop expanding your collection and start looking for its future home. For example, Bodge’s father, an avid collector of jazz books and records, plans to donate his collection to a local library after he dies.
Taking Tax-Free Distributions from Your HSA
By Sarah Brenner, JD
Director of Retirement Education
Health Savings Accounts (HSAs) may be one of the biggest tax breaks currently available. If you have a qualifying high-deductible health plan, you may make a deductible contribution to an HSA. There are no income limits for eligibility to contribute. You can then take tax-free distributions from your HSA to pay for qualified medical expenses.
More Than Just Medical Bills
Qualified medical expenses mean more than just doctor bills. Qualified medical expenses include those that would generally qualify for the medical expense deduction under the Tax Code. This means you can take a tax-free distribution from your HSA to pay not only medical expenses like doctor and hospital bills, but also medical supplies, prescriptions co-payments, dental care, vision services, and chiropractic expenses. You can take tax-free distributions from your HSA to pay for your spouse’s or child’s medical expenses, even if they are not covered by your high-deductible health insurance plan.
Prior Year Expenses
You can take a tax and penalty-free distribution from your HSA in 2025 to pay for medical expenses in a previous year, as long as the expenses were incurred after you established your HSA. That means you do not have to make an HSA withdrawal every time you have a medical expense. You can pay that expense from your pocket, let your account grow, and decide to reimburse yourself in a later tax year. Even if you no longer have a high-deductible health plan and you are no longer contributing to your HSA, you can keep the HSA and continue to take tax-free distributions from your HSA to pay for your qualified medical expenses for you, your spouse, and your dependents.
At Age 65, and After Death
You cannot contribute to an HSA once you are enrolled in Medicare. However, you can keep your existing HSA, and you can still take tax-free distributions for qualified medical expenses. When you reach age 65, you also gain some new benefits with your HSA. Generally, insurance premiums are not considered qualified medical expenses. However, after age 65 and enrollment in Medicare, certain insurance premiums can be paid tax free with HSA distributions. You can take tax-free distributions from your HSA to pay for Medicare premiums, excluding Medigap.
If your HSA beneficiary is your spouse, after your death, he or she can maintain the HSA in his or her own name and can continue to access the funds. Distributions for qualified medical expenses will be tax free just as they would have been to you.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/taking-tax-free-distributions-from-your-hsa/
Self-Certification After 60 Days: 12 Reasons
By Andy Ives, CFP®, AIF®|
IRA Analyst
There are two ways to move money from one IRA to another: a direct transfer or a 60-day rollover. With direct transfers, the funds are sent directly from one custodian to another. The IRA owner has no ability to use the dollars while they are in transit, and the transaction does not create any tax reporting. A direct transfer can be processed electronically, or a check can be sent. A check made payable to the receiving custodian “for the benefit of” (FBO) the IRA owner qualifies as a direct transfer. A direct transfer is the recommended way to move IRA dollars.
A 60-day rollover is a far riskier way to move IRA funds from one institution to another. The 60 days begin on the day the funds are received by the IRA owner. If they are not rolled over by the end of this 60-day window, it will be a taxable distribution. If the IRA owner is under age 59½, a 10% early withdrawal penalty will also apply (unless an exception exists). Additionally, even if the rollover is completed within 60 days, the transaction will generate tax forms that must be accounted for when the IRA owner files his tax return. A Form 1099-R will show the distribution, and a Form 5498 will show the corresponding rollover deposit.
The IRS has been agreeable to extend the deadline in certain situations. In fact, so many private letter ruling (PLR) requests were submitted over the years (pleading for an extension) that the IRS created a list of 12 items they will typically accept as reasons for missing the rollover deadline. The IRS went a step further and provided a means for IRA owners to self-certify that the reason they missed the deadline was due to one of these 12 reasons. With self-certification, an expensive PLR is not required. (Note that this self-certification process is not a get-out-of-jail free card. The IRS could still refuse the late rollover if it determines there was a larger violation of the rules.)
The 12 acceptable reasons for self-certification are:
- An error was committed by the financial institution making the distribution or receiving the contribution.
- The distribution was in the form of a check and the check was misplaced and never cashed.
- The distribution was deposited into and remained in an account that I mistakenly thought was a retirement plan or IRA.
- My principal residence was severely damaged.
- One of my family members died.
- I or one of my family members was seriously ill.
- I was incarcerated.
- Restrictions were imposed by a foreign country.
- A postal error occurred.
- The distribution was made on account of an IRS levy, and the proceeds of the levy have been returned to me.
- The party making the distribution delayed providing information that the receiving plan or IRA required to complete the rollover, despite my reasonable efforts to obtain the information.
- The distribution was made to a state unclaimed property fund.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/self-certification-after-60-days-12-reasons/

Weekly Market Commentary
-Darren Leavitt, CFA
It was a busy week on Wall Street. The Dow Jones Industrial Index and the S&P 500 went positive for the year, catalyzed by the announcement that China and the US would significantly lower tariffs for 90 days as trade negotiations continue. China reduced its tariffs on US goods to 10% while the US lowered its tariffs on Chinese goods to 30%. The move sent global markets higher on Monday, leading to 5 straight days of market gains for the S&P 500. The S&P 500 had been down 21.4% from its all-time high set on February 19th and is up 23.2% from the low set on April 7th.
President Trump’s visit to the Middle East garnered several headlines related to military deals, Artificial Intelligence, and exports of US Technology. It has been reported that over $600 billion in initiatives were forged during his visit. On his visit, Trump also lifted sanctions on Syria and announced an imminent nuclear deal with Iran. Ukraine and Russia’s peace talks started on Friday in Turkey, but Putin and Trump did not attend the talks. It is reported that Zelensky, Trump, and Putin are scheduled to have a call this Monday.
The Reconciliation bill was unable to move forward from the budget committee, as several fiscal hawks pushed back on the deal. Lawmakers will reconvene on Monday to try to get the bill to the next stage, with Republicans hoping to pass the bill by Thursday. Concerns regarding the growing deficit induced rating agency Moody’s to downgrade US sovereign debt on Friday. The move by Moody’s comes after S&P and Fitch cut their US debt rating last fall. Markets will likely feel the downgrade’s impact on Monday, with US Treasury yields expected to rise.
The S&P 500 gained 5.3%, the Dow rose 3.4%, the NASDAQ climbed 7.2%, and the Russell 2000 added 4.5%. The rally was broad-based but favored the Mega-Cap names, which were up 7.2% for the week. NVidia was a standout, gaining 16% on the week. US Treasury yields increased across the curve for a second week. The 2-year yield increased by ten basis points to 3.98%, while the 10-year yield jumped by six basis points to 4.44%. Oil prices increased by $0.97 to close at $61.97 a barrel. Gold prices fell by $157.90 or 4.7% to close at $3186.80 an Oz. Copper prices declined by $0.07 to $4.58 per Lb. Bitcoin prices changed little from the prior week, closing at $103,500. The US Dollar index increased by 0.65 to 101.07.
The economic calendar showcased the Consumer Price Index and Producer Price Index. CPI rose by 0.2% in April, less than the forecasted increase of 0.3%. The Core reading, which excludes food and energy, also increased by 0.2% and was lower than the consensus estimate of 0.3%. Headline CPI rose 2.3% year-over-year, down from 2.4% in March. Core CPI rose 2.8% year-over-year, in line with the March reading. PPI declined by 0.5% versus an estimated increase of 0.3%, while the Core reading declined by 0.4% versus the consensus estimate of 0.3%. Notably, the prior month’s data was revised materially higher. Retail Sales were a bit of a disappointment as consumers pulled back on their spending. The headline figure increased by 0.1% versus an estimated 0.2%, while the Ex-Auto’s figure increased by 0.1% versus the consensus of 0.5%. Initial Jobless Claims were unchanged at 229K and Continuing Claims ticked higher by 9k to 1.881M. The University of Michigan’s Consumer Sentiment index declined to 50.8 from the prior reading of 52.2. Inflation expectations for the next year increased from 6.5% to 7.3%.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

10 Simple Financial Tasks You Can Tackle in an Hour
You won’t believe how much you can accomplish — and save — in just a few minutes
Have 60 minutes to kill? You could spend it watching TV or playing games on your smartphone. Or you could spend it saving money, by ticking some easy but important financial tasks off your to-do list.
Get one — or more — of these 10 smart money moves accomplished on your next lunch hour.
1. Check your credit report
Unfortunately, credit report errors are widespread. A recent survey from Consumer Reports and WorkMoney, a nonprofit group that aims to help people find savings, showed nearly half of respondents (44 percent) who checked their credit reports found at least one error.
A credit report error, such as the wrong name on a bank account, an incorrect payment date or a bill you paid that’s been marked as outstanding, could be dragging down your credit score. Checking your credit report regularly can also help you spot when a bad actor uses your personal information to open a fraudulent account.
“Look for unfamiliar accounts, incorrect personal details or unauthorized inquiries,” recommends Bruce McClary, a spokesman for the National Foundation for Credit Counseling, an association of nonprofit credit counseling agencies.
You can request a free copy of your credit report once a week from each of the three major credit bureaus — Equifax, Experian and TransUnion — at AnnualCreditReport.com. You can also obtain reports by calling 877-322-8228 or downloading and filling out a request form and mailing it to the address listed at the top.
2. Put your credit on ice
Freezing your credit can help protect you from scammers and hackers. This simple move prevents the credit bureaus from releasing your financial information to third parties, making it harder for identity thieves to open new accounts in your name.
“Freezing your credit is an easy and effective way to reduce the risk of identity theft, which is especially important to keep in mind as we grow older,” says McClary. “As Americans grow older, they become increasingly attractive targets for criminals who count on their potential victims to be less tech-savvy and more likely to trust what they say.”
You can request a freeze for free online or by phone in just a few minutes — but you’ll have to do a separate freeze with each of the three credit bureaus. Once you do so, the credit agency must restrict access to your credit within one business day. Temporarily thawing a security freeze so that you can open a legitimate account is simple, too — and if you submit the request online or by phone, the company has to lift the freeze within one hour.
3. Sign up for an IRS identity protection PIN
People ages 65 to 74 are at greater risk of large financial losses from tax scams, a 2025 survey by McAfee found. An identity protection PIN, or IP PIN, can help protect your taxpayer data from cybercriminals.
To obtain a PIN, register for an account with the IRS. Once you verify your identity, you’ll receive a six-digit number to use when filing your taxes annually. You’ll get a new IP PIN each year. “This will provide taxpayers with the peace of mind that come tax time, no one else is claiming a refund in their name,” says Carl Breedlove, a lead tax research analyst at The Tax Institute at H&R Block.
4. Ask your cellphone provider for a better rate
Mobile plans are getting more expensive. The average cellular bill was $121 per month in 2024, up from $113 in 2022, according to survey data from digital billing service Doxo. But a quick call to your cellphone provider could save you money. Paying for data that you don’t use? Ask your provider to downgrade your plan. (Your monthly billing statement states data usage for each phone on your plan.) The best time to call customer service is on a Tuesday or Wednesday morning, when hold times are typically shorter, says Brian Keaney, co-founder and chief operating officer at Billshark, a bill-negotiating service.
If you’re 55 or older, look into discounts for older adults. T-Mobile’s Go5G Plus 55 plan offers eligible customers two lines at $60 each per month for unlimited talk, text and data. Mint Mobile also offers cellphone plans for customers 55 and older, with a 12-month unlimited plan for $25 per month plus a $300 upfront payment. AARP members can get two lines of unlimited talk, text and data with Consumer Cellular for $55 per month.
5. Download a few grocery store apps
Many supermarkets have mobile apps. By downloading them and signing up for the store’s loyalty program, you get access to special deals and digital coupons. Some smartphone apps, such as the Target Circle app, provide a barcode scanner that you can use to scan items as you shop to see if deals are available.
“Grocery store apps are one of the most underrated savings tools,” says Stephanie Carls, retail insights expert at RetailMeNot, a coupon website. “They offer personalized coupons, loyalty rewards and weekly specials that can really add up, especially on essentials.”
Shop at several grocery stores? Consider downloading Flipp, a free app that lets you select multiple supermarkets and browse their circulars. Participating stores include Aldi, Food Lion, Harris Teeter, Kroger, Walmart, Wegmans, Weis and other national grocers. Apps like Ibotta, Receipt Hog and Checkout 51 let you earn cash back on grocery purchases from certain supermarkets by scanning receipts.
6. See if you have unclaimed assets
About 1 in 7 Americans has unclaimed cash or property, according to the National Association of Unclaimed Property Administrators (NAUPA). “Unclaimed property can be anything from forgotten checking accounts, payroll checks, insurance payments or even the contents of a safe deposit box,” says Shaun Snyder, CEO of the National Association of State Treasurers (NAST).
Although there’s no central database for all unclaimed assets, you can go to MissingMoney.com to find unclaimed property in states where you’ve lived or worked. In one shot, you can search 49 states, Washington, D.C. and Puerto Rico. The free site, endorsed by NAUPA and NAST, also provides a national index with direct links and contact information for each state’s official unclaimed property program.
7. Have credit card debt? Apply for a low-interest balance transfer card
Nearly half of adults ages 50-plus have credit card debt, a recent AARP survey found. The good news? Moving high-interest credit card debt to a balance transfer credit card with a low introductory interest rate could save you a lot of money if you can pay it off before the introductory rate expires. Some cards offer up to 21 months to pay off the transferred balance with no interest, according to NerdWallet, a credit card comparison site.
“Signing up for a 0 percent balance transfer card is my favorite credit card debt payoff tip,” says Ted Rossman, a credit card analyst at Bankrate.
Paying for data that you don’t use? Ask your provider to downgrade your plan. (Your monthly billing statement states data usage for each phone on your plan.) The best time to call customer service is on a Tuesday or Wednesday morning, when hold times are typically shorter, says Brian Keaney, co-founder and chief operating officer at Billshark, a bill-negotiating service.
If you’re 55 or older, look into discounts for older adults. T-Mobile’s Go5G Plus 55 plan offers eligible customers two lines at $60 each per month for unlimited talk, text and data. Mint Mobile also offers cellphone plans for customers 55 and older, with a 12-month unlimited plan for $25 per month plus a $300 upfront payment. AARP members can get two lines of unlimited talk, text and data with Consumer Cellular for $55 per month.
5. Download a few grocery store apps
Many supermarkets have mobile apps. By downloading them and signing up for the store’s loyalty program, you get access to special deals and digital coupons. Some smartphone apps, such as the Target Circle app, provide a barcode scanner that you can use to scan items as you shop to see if deals are available.
“Grocery store apps are one of the most underrated savings tools,” says Stephanie Carls, retail insights expert at RetailMeNot, a coupon website. “They offer personalized coupons, loyalty rewards and weekly specials that can really add up, especially on essentials.”
Shop at several grocery stores? Consider downloading Flipp, a free app that lets you select multiple supermarkets and browse their circulars. Participating stores include Aldi, Food Lion, Harris Teeter, Kroger, Walmart, Wegmans, Weis and other national grocers. Apps like Ibotta, Receipt Hog and Checkout 51 let you earn cash back on grocery purchases from certain supermarkets by scanning receipts.
6. See if you have unclaimed assets
About 1 in 7 Americans has unclaimed cash or property, according to the National Association of Unclaimed Property Administrators (NAUPA). “Unclaimed property can be anything from forgotten checking accounts, payroll checks, insurance payments or even the contents of a safe deposit box,” says Shaun Snyder, CEO of the National Association of State Treasurers (NAST).
Although there’s no central database for all unclaimed assets, you can go to MissingMoney.com to find unclaimed property in states where you’ve lived or worked. In one shot, you can search 49 states, Washington, D.C. and Puerto Rico. The free site, endorsed by NAUPA and NAST, also provides a national index with direct links and contact information for each state’s official unclaimed property program.
7. Have credit card debt? Apply for a low-interest balance transfer card
Nearly half of adults ages 50-plus have credit card debt, a recent AARP survey found. The good news? Moving high-interest credit card debt to a balance transfer credit card with a low introductory interest rate could save you a lot of money if you can pay it off before the introductory rate expires. Some cards offer up to 21 months to pay off the transferred balance with no interest, according to NerdWallet, a credit card comparison site.
“Signing up for a 0 percent balance transfer card is my favorite credit card debt payoff tip,” says Ted Rossman, a credit card analyst at Bankrate.
https://www.aarp.org/money/personal-finance/quick-easy-financial-tasks/
First RMD Year and Roth IRA 5-Year Period: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
Our client is 75 years old. He just retired on January 1, 2025. The company has recognized his retirement date as being January 1, 2025.
When must he take his first required minimum distribution (RMD)?
Rick
Answer:
Hi Rick,
If the client actually worked on January 1, 2025, then his first RMD year is 2025. The RMD for the first RMD year can be delayed until April 1 of the next year. So, he could delay the 2025 into 2026 – no later than April 1, 2026. But if he did that, he would have two RMDs payable in 2026, one for 2025 and the other for 2026.
It gets tricky if your client did not work on January 1, 2025 (and his last actual work day was in 2024). There is no IRS guidance on this situation. But the IRS could say that he actually retired (i.e., worked his last day) in 2024 even though the company is showing January 1, 2025, as his retirement date. If so, his first RMD was for 2024 and that RMD was due by April 1, 2025. If he has not taken the 2024 RMD, he would have to take it ASAP and file for a penalty waiver using Form 5329.
Question:
If I made a prior year Roth IRA contribution for 2024 in spring of 2025, when does the 5-year rule for holding that IRA begin?
Many thanks.
Phil
Answer:
Hi Phil,
The 5-year holding period for determining whether the distribution of earnings is taxable begins as of the first day of the year for which a contribution (or conversion) was made to any Roth IRA. The contribution you made in the spring of 2025 was for 2024. So, the 5-year period began on January 1, 2024.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/first-rmd-year-and-roth-ira-5-year-period-todays-slott-report-mailbag/
How the Compensation Limit Affects Retirement Plan Benefits
By Ian Berger, JD
IRA Analyst
Many retirement plans base employer contributions on employee compensation. For many years, Congress has limited the compensation that can be taken into account for those contributions. Fortunately, this dollar limit only applies to very highly paid employees.
The compensation limit increases most years based on inflation. For 2024, it was $345,000, and it went up to $350,000 for 2025. If you’re fortunate enough to be affected by the limit, it doesn’t mean you can’t receive an employer contribution. It just means that the contribution can only be made on your pay up to the dollar limit for the year.
One type of employer contribution often affected by the compensation limit is 401(k) matching contributions.
Example 1: Mark, age 52, is CEO of FB Company and earns $1.0 million dollars in 2025. The company’s 401(k) matches 50% of each employee’s elective deferrals, up to 6% of pay (a typical formula). For 2025, Mark defers the maximum $31,000 ($23,500 + $7,500 catch-up). The plan can only recognize $350,000 of Mark’s compensation in making the match. So, Mark’s matching compensation is limited to $10,500 [50% x (6% x $350,000)]. If all of his pay could be recognized, his match would be $30,000.
(Don’t feel too sorry for Mark. Many companies have non-qualified deferred compensation plans that allow higher paid employees to defer on their pay without being capped by the annual elective deferral limit.)
The compensation limit also comes into play when a 401(k) employer makes an across-the-board contribution (sometimes called a “profit sharing contribution”) to all employees, whether they defer or not.
Example 2: FB decides to make a flat 4% contribution to the 401(k) plan — instead of a match — for 2025. Mark’s contribution will be limited to $14,000 (4% x $350,000).
SEP IRAs are also subject to the compensation limit. The 2025 maximum SEP contribution is capped at 25% of up to $350,000 of pay, but in no event more than $70,000. SIMPLE IRAs may also be affected. A SIMPLE IRA sponsor can make either a matching contribution or an across-the-board contribution. Oddly, the compensation limit must be applied if an across-the-board contribution is made but not if a match is made.
Most defined benefit pension plans calculate benefits based on a formula that takes into account pay. For example, the plan might pay an annual benefit at retirement equal to 2% of average annual pay times years of service with the employer. In that case, pay cannot include amounts above the compensation limit for the year.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/how-the-compensation-limit-affects-retirement-plan-benefits/
New Reporting for 2025 QCDs
By Sarah Brenner, JD
Director of Retirement Education
The IRS has introduced a new code for the reporting of qualified charitable distributions (QCDs) by IRA custodians on Form 1099-R.
How QCDs Work
QCDs first became available in 2006, and they were made permanent in 2015. The strategy has become increasingly popular among IRA owners who are charitably inclined. With a QCD, IRA owners or beneficiaries who are at least age 70½ make a tax-free donation to charity directly from their IRA. An important benefit of a QCD is that it can be used to satisfy a required minimum distribution (RMD).
The 2025 annual limit is $108,000, and it is indexed for inflation. A one-time QCD of $54,000 can go to a split-interest entity, such as a charitable remainder annuity trust, charitable remainder unitrust or a charitable gift annuity.
QCDs can only be made through a direct transfer of IRA funds to charities that qualify under the tax code. Gifts made to donor-advised funds or private foundations do not qualify. In addition, the client cannot receive anything of value from the charity in exchange for making a QCD, and that must be documented in writing.
New Code Y
Historically, IRA custodians have not been required to report a QCD differently than any other IRA distribution. There has never been any special code on Form 1099-R to identify the QCD. Instead, the QCD was coded like any other IRA distribution, and it was up to the taxpayer to let the IRS know about the QCD on the tax return.
For 2025 QCDs, the IRS appears to have changed its approach. In April 2025, the IRS released draft Instructions for the 2025 Form 1099-R. These draft Instructions introduced a new Code Y for QCDs. While these are only “draft” instructions, the IRS has also released the final version of the actual 2025 Form 1099-R with Code Y included.
Code Y would seem to be welcome news for both IRA owners and their tax preparers to help ensure that the QCD tax break is not missed. However, as before, IRA owners will need to be careful to make sure that their donation satisfies all of the QCD rules. Simply receiving a 1099-R with Code Y from the custodian does not necessarily guarantee that the donation qualifies for tax-free treatment.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/new-reporting-for-2025-qcds/

Weekly Market Commentary
-Darren Leavitt, CFA
US financial markets were little changed last week as investors continued to weigh the implications of the Trump administration’s trade policies. A trade agreement between the US and the UK set a constructive tone and is likely to provide a template for future trade deals- there are currently 20 nations at the table negotiating tariffs with the US. Treasury Secretary Scott Bessent is scheduled to meet with Chinese Premier He Lifeng in Geneva this weekend to discuss trade between the two nations. It is not expected that much will come out of this weekend’s negotiations; however, de-escalating what is now considered a full-on embargo on goods between the superpowers is a first step and provides the market with something to look forward to. Again, it’s not likely anything material will come out of this weekend’s discussions; rather, it is more likely that there will be several rounds of talks with plenty of issues to contemplate and thus more volatility for investors to endure.
The Federal Reserve’s open market committee meeting left its policy rate unchanged at 4.25%-4.50%. Fed Chairman Powell noted the cost of waiting to change the policy rate is fairly low, as the economic data remains solid. That said, there is a strong sense that the uncertainty induced by trade policy will dampen the economy and that tariffs will likely be inflationary. The Bank of England cut its policy rate by twenty-five basis points to 4.25%.
Corporate earnings continued to roll in with mixed results. Despite a solid quarter and a better-than-expected outlook, Palantir’s share price fell after its earnings announcement. Valuation concerns were cited as the reason for the pullback. The street applauded Disney’s results as subscriber growth topped estimates and theme park revenue surpassed expectations. Carvana was also bid higher after a strong beat on their first quarter results. The company saw a surge in buying in front of the implementation of tariffs on autos. Arm Holdings, DraftKings, and Coinbase had disappointing results. Google shares were also under pressure this week as Apple looked for alternative search solutions for its Safari browser. Google’s Chrome has co
The S&P 500 lost 0.5%, the Dow lost 0.2%, the NASDAQ shed 0.3%, and the Russell 2000 gained 0.1%. Technically, the US market appears to be consolidating the last few weeks of gains. We believe that the market is vulnerable to a pullback with limited upside in the short term. Yields increased slightly across the curve, with the 2-year yield up four basis points to 3.88% and the 10-year yield up six basis points to 4.38%. Despite an increase in oil production, oil prices increased 4.6% on the week, closing at $61.05 a barrel. Gold prices increased by 3.1% or $102.60 to close at $3344.70 per Oz. Copper prices shed $0.04 to close at $4.65 per Lb. The price of Bitcoin increased by 7.2%, closing at $103,500 on Friday afternoon. The US Dollar index increased by 0.4% to 100.42.
The economic calendar was quiet. ISM Services showed that the services sector remained in expansion mode and accelerated from the prior month. The reading came in at 51.6 versus the previous reading of 50.8. Initial claims fell by 13k to 228k, and continuing claims fell by 27k to 1879k, which helped temper fears that the labor market is rolling over after last week’s noticeable uptick in claims. First quarter productivity fell to -0.8% versus the consensus estimate of -0.2%. Q1 Unit Labor Cost increased to 5.7% from 2% in the fourth quarter.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

4 Key Decisions for Early Retirement
‘Will your money last?’ isn’t the only question to consider before retiring.
I was chatting with a friend the other day about his retirement—possibly an early one. At age 60, he has worked hard, saved aggressively, and invested well. Most important, he’s pretty burned out. He’d love to find a way to pursue his many interests, get more sleep, and not have to shoehorn the whole rest of his life into the weekends.
Happily for him, he had received wonderful guidance from his financial advisor; they had discussed the viability of his portfolio under various asset allocations and simulations, as well as what healthcare would cost if he were to retire before 65 and what he would do for cash flows before his Social Security income commences. But as he and I talked through this momentous decision, it was clear that the key inputs were much more nuanced than looking at his portfolio value, asset allocation, and budget pre-Medicare/pre-Social Security. There were a lot of lifestyle and quality-of-life decisions swirled in, too, and those decisions have financial implications. It’s a bit like a Rubik’s Cube. The right decision for him—and indeed the right retirement plan—rests on a few key decisions. Note that the below isn’t an inclusive list, but it’s the gist of what we discussed.
Will You Continue to Work in Some Fashion, or Are You Planning on a Hard Stop?
Being willing to work a bit longer—in some capacity—wasn’t my friend’s first choice. He’d love to make a clean break. But continuing to earn an income for at least a few more years would help him worry less about his portfolio’s ability to last; otherwise, his plan looks a bit tight. Even if he downshifted into a lower-paying or part-time position and couldn’t save as much as he was able to do in his highly paid position (or even if he had to stop saving altogether), he’d still be forestalling portfolio withdrawals. That would mean that, when he did eventually fully retire, he could spend more without having to worry so much about running out. Continuing to earn an income would also help him stick with his plan to delay Social Security until 70, and if he continued to work in a position that offered healthcare benefits, he could avoid having to cover health insurance out of pocket until Medicare coverage kicks in. And as much as his job has been exhausting him these last few years, he’s had a wonderful career and his professional life seems intertwined with his personal identity.
Ultimately, my friend decided to propose a reduced schedule to his employer; at 30 hours a week, he would still be able to maintain his healthcare coverage. And if that didn’t pan out, he decided that he would keep his ears open for consulting positions in his field or consider less stressful and less remunerative work in an adjacent field. For someone else—and indeed my friend at some later date—making a clean break could be the right call, especially if continuing to work begins to have implications for physical or mental health. For now, he still likes working—he just wants less of it.
What Lifestyle Changes Do You Plan to Make?
We also talked through whether my friend’s spending would likely change a lot when he retired. He lives and owns a condo in a beautiful but expensive part of the US but has considered moving back to the Midwest when he retires in order to be closer to family. Moving to a cheaper locale would free up some funds that he could plow into his portfolio, but it would also take him away from his social network and pull him away from the center of his industry. Staying put seems like the right call for the time being, especially as continuing to work is in the mix, though downsizing or moving somewhere with a lower cost of living is a valuable thing to have in his back pocket.
How Flexible Are You Willing to Be With Your Spending?
This is a major dimension in our retirement income research, and it should be a key consideration for anyone embarking on retirement, too. If a retiree is willing to and has the leeway to tighten up spending when the portfolio takes on losses—right now, for example—that improves the portfolio’s ability to last over a 25- or 30-year horizon. The reason is simple: Lower portfolio spending during and after losses leaves more of the portfolio in place to recover with the market. Our retirement spending research also shows that flexible spending strategies increase total lifetime spending relative to strategies that maintain static inflation-adjusted spending, like the 4% guideline.
In my friend’s case, he’s quite willing to adjust his spending as he goes. He’s not a big spender, and years of work travel mean that he doesn’t have an appetite for lots of expensive globe-trotting, unlike many new retirees. When Social Security comes online for him at age 70, he’ll have even more leeway to adjust spending. It’s also worth noting that retiree spending tends to trend down throughout the lifecycle, though some retirees have high healthcare-related costs, notably for long-term care, toward the ends of their lives.
How Do You Feel About Lifetime Spending Versus Leaving a Bequest?
This is a key aspect of retirement spending: Do you want to spend as much as you can (and/or give away as much as you can) during your own lifetime, or do you aim to leave a bequest? That was the idea behind the “spending/ending ratio” that we introduced in our 2025 retirement spending research; we wanted to help retirees see whether retirement spending strategies generally helped front-load lifetime spending or left a high possibility of portfolio leftovers for bequests. Flexible strategies like the guardrails strategy tend to encourage lifetime consumption and spending, whereas more rigid ones tend to leave more leftovers.
My friend is single and doesn’t have children; his nieces and nephews are all financially well and have affluent parents themselves. Leaving a bequest isn’t a priority for him; enjoying his money is. That underscores the value of using a flexible spending strategy and taking steps to enlarge lifetime income rather than using a more rigid strategy that could cause him to underspend.
https://www.morningstar.com/retirement/4-key-decisions-early-retirement
Roth Conversions and 401(k) Distributions: This Week’s Slott Report Mailbag
By Sarah Brenner, JD
Director of Retirement Education
Question:
Since I retired in 2020, each year I have been converting amounts from my employer plan to my Roth IRA. I will be age 73 in 2026. Can I take my required minimum distribution (RMD) amount and convert that to my Roth IRA?
Thanks,
Thomas
Answer:
Hi Thomas,
Unfortunately, this strategy will not work. You can continue to convert funds from your employer plan to a Roth IRA, but your RMDs cannot be converted. However, you can take the RMD and, once that is satisfied, continue to convert funds from the plan to your Roth IRA.
Question:
I retired from my job at age 53. I still have money in my former employer’s 401(k) plan. Now, I am age 57. I was told that since I separated from service and I am now over age 55 that I can take penalty-free distributions from my 401(k) plan. Can you please help clear this up for me?
Thank you for your help!
Gayle
Answer:
Hi Gayle,
Until you reach age 59½, any distribution that you take from the 401(k) plan would be subject to the 10% early withdrawal penalty unless an exception exists. There is an exception to the penalty for distributions taken when you separate from service in the year you reach age 55 or later. This exception would not work for you because even though you are over age 55 now, you separated from service when you were only age 53. It is the age at separation from service that matters and not the age at the time of the distribution.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/roth-conversions-and-401k-distributions-this-weeks-slott-report-mailbag/
Check Both Boxes for Tax-Free Roth IRA Earnings
By Andy Ives, CFP®, AIF®
IRA Analyst
Roth IRAs follow strict distribution ordering rules. Contributions come out first, then converted dollars, and then earnings. It does not matter how many Roth IRAs a person has, or if the accounts are held at multiple custodians. The IRS doesn’t care. All the IRS sees is one big Roth IRA bucket, and within that consolidated Roth IRA bucket, there are only three types of dollars: contributions, conversion, and earnings. Any distribution from any Roth IRA follows the ordering rules – contributions first, converted dollars second, earnings last.
Let’s focus on just the EARNINGS within this aggregated bucket of Roth IRA dollars. For the earnings to be tax free (which is the goal of starting a Roth IRA), a person must check two boxes. Box #1: He must own a Roth IRA – any Roth IRA – for 5 years. The 5-year clock starts on January 1 of the year of the first Roth IRA contribution or conversion. Box #2: He must be age 59½ or older (or disabled, purchasing a first home or deceased). Check both boxes, and you are living in a tax-free-earnings world for the rest of your life.
Assume a person is 60 years old, never had a Roth IRA before, and decides to make his first entry into a Roth IRA by doing a $100,000 conversion. When will his earnings be tax free? Answer: In five years. Until he reaches the 5-year mark, he only checks the age 59½ box.
What if this same person does another Roth conversion three years after the first conversion? When will the earnings on that SECOND Roth conversion be tax free? Answer: After only TWO years! Why? Because two years after that second conversion, he will be over age 59½ AND will have owned ANY Roth IRA for 5 years (based on his first conversion). With both boxes checked, the 5-year Roth IRA clock applicable to conversion #2 disappears. Any future Roth IRA contributions or conversions in this person’s life will result in IMMEDIATE tax-free earnings.
Example 1: Tom, age 60, never had a Roth IRA before. Excited by the opportunity to have tax-free earnings, he converts $100,000 from his traditional IRA. Since Tom never owned a Roth IRA, he must wait 5 years before the earnings are tax free. Three years later, when Tom is age 63, he does another Roth conversion. This second conversion has its own 5-year Roth IRA clock to wait out before the earnings are tax free. However, two years later, when Tom is age 65, he has checked both boxes: he is over age 59½ AND he owned a Roth IRA for 5 years. At that point, the 5-year Roth IRA clock applicable to Tom’s second conversion disappears, and ALL his Roth IRA earnings are tax-free. Tom will never have another Roth IRA 5-year clock to worry about. The earnings on any future Roth IRA contribution or conversion will be immediately available tax free.
Example 2: Betty was age 55 when she contributed to her first Roth IRA and started her 5-year clock for tax-free earnings. Three years later (age 58), Betty does a Roth conversion. This conversion has its own 5-year clock. However, two years after that, when Betty is age 60, she will have owned a Roth IRA for 5 years (based on her initial contribution at age 55) AND she will be over age 59½. Both boxes checked. Her conversion clock disappears. All earnings are tax free.
Check both boxes – age 59½ AND own any Roth IRA for 5 years – and all earnings in ALL your Roth IRAs are tax free.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/check-both-boxes-for-tax-free-roth-ira-earnings/
How Plan After-Tax Contributions Are Taxed When Converted
By Ian Berger, JD
IRA Analyst
The April 23, 2025, Slott Report article, “After-Tax 401(k) Contributions Shouldn’t Be an Afterthought,” discusses how 401(k) after-tax contributions can be moved into Roth accounts through in-plan Roth conversions, the “mega backdoor Roth IRA,” or split rollovers. This article will explain the tax implications of these strategies.
If you have made after-tax contributions to your plan, any earnings on those contributions are taxable when distributed to you. If you have earnings, you can’t just take out the after-tax contributions to avoid paying taxes on a withdrawal. Instead, a pro-rata rule treats part of your distribution as taxable.
Most 401(k)s have a separate account that contains only after-tax contributions (not taxable) and earnings (taxable). If your plan does separate accounting, then only that account is considered in doing the pro-rata calculation. (Neither pre-tax accounts nor Roth accounts within your 401(k) are considered for this calculation.) The portion of each withdrawal taxable to you is the ratio of earnings in the after-tax account to the value of the entire separate account. If you’re not sure whether your plan uses separate accounting, check with the plan administrator or your HR rep.
Example: Mei participates in a 401(k) plan that separately accounts for after-tax contributions and their earnings. She has $100,000 in contributions and $25,000 in earnings in that account. Mei wants to do an in-plan conversion to have $40,000 of that account transferred to her Roth account within the plan. Mei cannot just have all $40,000 come from non-taxable after-tax contributions. Instead, 20% ($25,000/$125,000) of the withdrawal, or $8,000, must come from taxable earnings. The remaining $32,000 comes from after-tax contributions and is tax-free.
By contrast, if Mei’s plan doesn’t have separate accounts, her pre-tax 401(k) accounts (e.g., elective deferrals and employer contributions) must be considered in calculating how much of the $40,000 conversion is taxable. That will require her to pay much higher taxes on the conversion.
The same tax analysis would apply if you are using the mega backdoor Roth IRA strategy to move after-tax contributions to a Roth IRA (instead of to your Roth 401(k) account through an in-plan conversion) while you’re working. Again, if your plan has separate accounting, only that after-tax account comes into play when calculating how much of the Roth IRA conversion is taxable.
You can avoid any immediate taxes on a Roth conversion by doing a split rollover of your after-tax and pre-tax 401(k) accounts. You would roll over your after-tax funds to a Roth IRA and your pre-tax funds (including earnings on after-tax contributions) to a traditional IRA. The after-tax funds would be converted tax-free to a Roth IRA, and any subsequent earnings could be withdrawn from the Roth IRA tax-free down the road. However, this split rollover is not available until age 59½ if you’re still working, and depending on the terms of your plan, may not be available until after you leave employment.
Since these rules are complicated, you should contact a knowledgeable financial advisor to discuss how to handle your after-tax plan contributions.
https://irahelp.com/slottreport/how-plan-after-tax-contributions-are-taxed-when-converted/

Weekly Market Commentary
-Darren Leavitt, CFA
Global markets rallied for a second week as the S&P 500 clinched nine consecutive days of gains- something not seen in two decades. News that trade negotiations between the US and seventeen countries would occur over the next few weeks encouraged investors to buy risk assets. US and Chinese diplomacy seemed to thaw a bit after the US reportedly reached out to Beijing on trade and after China relaxed tariffs on several US goods. A third of the S&P 500 reported first-quarter earnings over the week with mixed results. Microsoft shares advanced 11.1% after its earnings showed strong demand for Azure. Meta shares also ripped higher on the back of its better-than-expected results and outlook. Meta ended the week 9.1% higher. Apple’s quarter was solid, but worries about the impact of tariffs on its supply chain and demand for the iPhone in China weighed on shares. The economic calendar was also full this week and provided some intriguing data for investors to contemplate.
The S&P 500 gained 2.92%, the Dow rose 3%, the NASDAQ increased 3.42%, and the Russell 2000 added 3.22%. The S&P 500 regained its 50-day moving average (5582), which could induce technical buying and push the index higher. A stronger-than-expected Employment situation report hit the bond market on Friday and sent yields higher across the curve. The move produced weekly losses for US Treasuries. The 2-year yield increased by eight basis points to 3.84%, while the 10-year yield increased by five basis points to 4.32%. Oil prices tumbled on the idea that OPEC+ was considering an increase in output. West Texas Intermediate lost $4.86 or 7.42%, closing at $58.36 a barrel. Gold prices continued to come off their most recent highs, losing $55.50 to close at $3,242.10 an ounce. Copper prices fell 3.2% or $0.16 to close at $4.60 per Lb. Bitcoin prices close Friday afternoon at $97,500, up $2,500 for the week. The US Dollar index increased by 0.5% to 100.08. Notably, the Japanese Yen weakened on dovish tones from the BOJ, which held their monetary policy rate at 0.5%.
The Employment Situation report headlined the economic calendar, which showed stronger-than-expected payroll generation. Non-Farm Payrolls increased by 177k versus the consensus estimate of 130k. Private Payrolls increased by 167k, topping the forecast of 125k. The Unemployment Rate remained at 4.2%. Average Hourly Earnings came in at 0.2%, lower than the anticipated 0.3%. The Average Work Week came in at 34.3 versus the estimate of 34.2. Interestingly, Initial Claims increased by 18k to 241k and Continuing Claims jumped by 83k to 1916k. We continue to look at this high-frequency data for signs of weakness in the labor market and are closely watching the shippers and retailers for signs of layoffs. The Fed’s preferred measure of inflation, the PCE, showed no increase from the prior month on both the headline and core readings. On a year-over-year basis, headline PCE increased by 2.3%, down from 2.7% in March. The Core increased by 2.6% but decreased from 3% in March. Personal Income increased by 0.5% in March, in line with expectations, while Personal Spending increased by 0.7%, above the estimated 0.4%. The first look at Q1 GDP showed a contraction of 0.3% versus the consensus estimate of 0.4%. The decline came as imports ticked materially higher on demand pull in front of expected tariffs. The GDP Deflator came in at 3.7% versus an estimated 3.1%- slower GDP growth coupled with higher prices equals stagflation. ISM Manufacturing also showed continued contraction in the manufacturing sector. The print came in at 48.7, down from the prior reading of 49. Anything under 50 is considered contraction, while a print above 50 indicates expansion. Consumer Confidence continued to wane with a print of 86, down from the prior month’s reading of 93.9. The expectations index declined to 54.4, the lowest level since October 2011. 12-month inflation expectations also ticked higher to 7% from 6%.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

How to Plan for Retirement Like a Veteran
Surveys show ex-service members retire with more assets, less debt and greater confidence. Here are six ways to follow their lead.
When her son Corbett joined the Marine Corps right out of high school in 2013, Lara Ferguson was surprised to learn that he was required to sign up for a retirement savings account.
It wasn’t just the military’s focus on financial planning that got her attention. It was that, as a certified financial planner herself, she seldom saw civilian clients start preparing for retirement so early.
“Before they get their first paycheck, someone is telling [new enlistees] to put a portion of it into savings,” says Ferguson, who works for Citizens Wealth Management in Charlotte, North Carolina, and whose three sons have all served.
New research suggests there is a lot to learn from how they and their peers plan for retirement.
People who have served in the military have more assets, are less worried about debt and are more confident about retirement than their nonmilitary counterparts, according to a 2024 survey by the Employee Benefit Research Institute (EBRI). They’re also more likely to know how much money they will need to pay for health care or cover an emergency expense in retirement, the poll shows.
Another 2024 study, by financial services company First Command, found that more than three-quarters of career military families are confident they will be able to retire comfortably, compared to about half of civilians who have financial advisers and fewer than one in five who don’t.
“It’s astounding how many conversations I have with nonmilitary people who don’t know whether their company even has a 401(k) match,” Ferguson says.
But in the armed services, she notes, saving for retirement becomes the norm right off the bat. “They don’t have a choice. We should all get in that habit.”
Here are six things military members do to prepare for retirement that we can all incorporate into our plans.
1. Start building a nest egg as soon as you can
Like Ferguson’s sons, most service members join up young: 83 percent are 17 to 21 years old when they enlist, according to the nonprofit military research organization CNA. Unlike most civilians in that age group, all are required to undergo financial counseling.
“The military from day one is teaching you to have a long-term goal,” says Will Mullin, a former Army combat engineer and senior vice president at the Wealth Enhancement Group, a financial advisory firm.
Incoming service members are automatically enrolled in the Thrift Savings Plan, a 401(k)-style retirement account for federal employees and military personnel, and they get a life insurance policy administered by the Department of Veterans Affairs.
“From the day you start working, you start preparing for retirement,” says Paris Jackson, a financial adviser at Northwestern Mutual who served for more than 20 years as a financial manager in the Army.
That’s a crucial message for people who didn’t serve in the military, she says. “The phrase I always hear from them is, ‘I wish I’d started earlier.’ ”
Most people don’t get the head start service members do — fewer than 8 percent of civilians ages 15 to 23 have retirement accounts, according to U.S. Census Bureau data — but financial advisers stress that it’s never too late to start saving. If your workplace offers a 401(k), sign up. Set your contribution rate to automatically increase each year and take full advantage of any employer match.
“We as a population have to get back to thinking about our futures at a younger stage in life,” says Christopher Fitzpatrick, deputy director of Coordinated Assistance Network, a nonprofit that provides financial coaching to active service members and veterans.
2. Talk about money
There’s another thing that focuses service members on their financial futures sooner: Research has shown that, on average, they get married several years younger than civilians do.
“It causes them to be much more serious about making sure that if something happens to them, their family’s going to be OK — to sock money away, make sure they have life insurance,” says James Cadet, a retirement planning counselor at Merrill Lynch Wealth Management and a West Point graduate who served as a military intelligence officer. He says that even civilians who marry and have kids later can anticipate family financial needs and plan accordingly.
Because of disruptions such as deployments, military couples do something else advisers say civilians should do more: Share financial information between them.
“Know the passwords and how the bills are being paid,” says Michael Meese, a retired brigadier general and president of the American Armed Forces Mutual Aid Association.
Ferguson echoes that in her work. “I preach this all the time with clients: Everybody needs to know everything.”
3. Get help
Many service members don’t confine those conversations to their families. They openly discuss their finances with more experienced mentors, typically officers and older comrades. “You’re much more prone to seek out advice,” says John Osarczuk, a former Air Force pilot and the national director of adviser operations at First Command.
“It’s not unheard of for a squad leader to go to the car dealership with a soldier so they don’t take out a loan with 19 percent interest to buy a Dodge Neon,” says Kyle Packard, a former Army Ranger and a certified financial planner in Alexandria, Virginia, whose firm, Packard Wealth Strategies, focuses on retiring service members and veterans. “Everyone knows exactly what everyone else makes, so there’s no self-consciousness or anxiety over money.”
In civilian life, money “is still something people consider secret,” Jackson notes. “People don’t talk about what they make.”
These pros’ advice? Don’t be afraid to open up.
“Ask for help. Ask the old guy in the office,” Packard says. Or talk to your HR department. Tapping their years of experience and expertise may well be worth the short-term discomfort.
4. Live within your means
Enlisted service members are not highly paid, at least not early in their careers. Basic pay in 2025 starts at just over $25,000 a year (not including additional allowances for housing, clothes and other needs). Financial advisers say that gets people in the military accustomed to another important habit for retirement planning: budgeting.
“There’s a sense of frugality,” says Packard. “I don’t want to say it’s universal, but it’s much more prevalent in the military.” In the civilian sector, Cadet says, “people may get sucked in more easily to spending money they don’t have.”
Emulating the military’s culture of discipline, at any stage, could help Americans prepare better for retirement, Meese says. “You don’t spend more than you make, and you try to put away 10 percent and do all these disciplined things,” he says.
5. Ask about your benefits
Fewer than 30 percent of service members stick with the military until retirement, the EBRI survey found. Most muster out to other careers and are confronted with an entirely new alphabet of civilian benefits.
“They make this big transition, and that causes them to ask more questions at that point,” says Craig Copeland, director of wealth benefits research at EBRI. “Just gliding through the private sector, you don’t have that kind of big focus.”
Civilians changing jobs “look at it as more paperwork,” Mullin says. They may not know or understand the full range of benefits offered and, as a result, don’t take full advantage of them,.
Jackson encourages her clients to ask detailed questions whenever they switch jobs: “Have I taken advantage of everything my employer offers? Have I signed up for all the benefits?”
6. Revisit and revise your plan
Military culture motivates service members to regularly reconsider their retirement plans in response to changing circumstances. As on the battlefield, there is always a Plan B.
“In the military, it’s not fire and forget,” Osarczuk says. “You don’t do it one time and then never come back to it. You pay attention to it all the time. How have my goals changed? How has my life situation changed? And how has that changed my plan?”
Financial security is considered part of operational readiness for service members; people focused on money worries can be distracted from the mission. Meese, the former brigadier general, says there’s a lesson there for civilians: “It’s crucial to create a culture where fiscal responsibility becomes second nature.”
https://www.aarp.org/money/retirement/plan-like-a-veteran/
Basis In Your Traditional IRA
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
My wife and I created a Roth IRA when our two children were young to pay for their college education. Our daughter is finishing her second year of school, and our son will be entering college this fall. We have withdrawn $30,000 so far from our contributions to pay her expenses. The current value of the Roth IRA is over $150,000. Our remaining contributions are around $70,000. I’ve been told that I can only withdraw our contributions without tax or penalty and cannot touch the earnings generated unless I pay the income tax. Is this true, or can we use the entire value for the qualified expense? My wife and I are 55 and 54 years old.
Thank you,
Chip
ANSWER:
Chip,
Roth IRAs follow strict distribution ordering rules. Contributions come out first, then converted dollars (none in your case), followed by earnings. Contributions are always available tax- and penalty-free, regardless of how old you are or how long the Roth IRA has been open. As such, you currently have access to $70,000 free-and-clear. The earnings are a different story. For Roth IRA earnings to be tax free, the Roth IRA must have been open for 5 years AND the Roth IRA owner must be at least age 59½, disabled, purchasing their first home or deceased. Unfortunately, paying for higher education is not a reason for taking tax-free distributions of Roth IRA earnings. Therefore, if you exhaust your contributions and start withdrawing the earnings, you can avoid the 10% under-age 59½ early withdrawal penalty by leveraging the higher education penalty exception. However, the earnings will be taxable.
QUESTION:
A recent Slott Report post states that if you are age 73 or older you will need to take your 2025 required minimum distribution (RMD) from your IRA prior to doing a Roth IRA conversion. However, if you turn age 73 in 2025, don’t you have the option to defer your first RMD to April 1, 2026? If so, then, can’t you do a conversion in 2025 without taking the RMD?
Thank you,
Les
ANSWER:
Les,
It is true that the RMD must be withdrawn before a Roth conversion can be completed. It is also true that the first RMD can be delayed until April 1 of the year after the year a person turns age 73. However, if the first RMD is delayed, it is still the first RMD that is applicable to the year the person turned age 73 (2025 in your case). Since it is the RMD for 2025, delaying it to 2026 does not change the fact that it must be withdrawn before doing a conversion in 2025.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/roth-iras-and-required-minimum-distributions-todays-slott-report-mailbag/
Basis In Your Traditional IRA
By Sarah Brenner, JD
Director of Retirement Education
While most distributions from a traditional IRA are taxable, sometimes distributions can include after-tax dollars. These after-tax dollars are known as “basis.” Handling and tracking basis in your traditional IRAs can be challenging, but it is important to get it right. If mistakes are made, double taxation can occur. That is a result no IRA owner wants.
What Is Basis in a Traditional IRA?
Basis in a traditional IRA consists of after-tax dollar contributions. Basis in your IRA can come from two sources:
- Nondeductible tax-year IRA contributions (including those that are done as part of the backdoor Roth IRA conversion strategy).
- After-tax funds that are rolled over from a plan like a 401(k). (This does not include funds from a Roth plan account, which cannot be rolled over to a traditional IRA.)
Earnings on basis amounts are tax deferred, not tax free. When earnings are distributed, they are taxable as ordinary income. While basis avoids the 10% early distribution penalty, earnings on these after-tax dollars can be subject to the 10% early distribution penalty, if applicable.
Basis carries over to inherited IRAs. Most beneficiaries, and even their tax preparers, aren’t aware of this issue. If you inherit an IRA, you need to determine whether basis exists. Failure to adequately investigate will cause you to overpay taxes on distributions from the inherited IRA.
IRAs Are Different When It Comes to Basis
Basis in your IRA is different from basis in your investment account. In an investment account, basis is the amount paid for the asset. Growth on that investment is taxed as long-term or short-term capital gain. At the death of the owner, a beneficiary gets a step-up in basis to the current market value. There is never a step-up in basis in any retirement account.
Form 8606
Someone, somewhere, has to be tracking the basis in IRA accounts. Did you think it was the IRA or custodian? You would be wrong. The “I” in IRA stands for “individual.” The individual is responsible for tracking their own basis.
You can track your basis using Form 8606. This form is filed with your tax return each year that you make an after-tax contribution to your traditional IRA, and each year that you take a distribution from your IRA (if the IRA contains basis).
Filing Form 8606 to track your basis is important. No one wants to pay taxes on funds that have already been taxed!
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/basis-in-your-traditional-ira/
72(t): Switching Methods in a Market Downturn
By Andy Ives, CFP®, AIF®
IRA Analyst
When a person under the age of 59½ needs access to his IRA dollars, there is a 10% early withdrawal penalty applied to any distribution, unless an exception applies. One of the many 10% penalty exceptions is a 72(t) “series of substantially equal periodic payments.” Due to the possibility of errors over the required duration of such distribution schedules, it is our opinion that establishing a 72(t) should be the last resort. However, sometimes life gets in the way and a person has no other options.
A 72(t) payment plan must continue for five years or until age 59½, whichever comes later. A person leveraging a 72(t) cannot simply choose whatever amount he wants to take. A calculation must be made to determine the allowable distribution amount. The calculation factors in items like the balance in the account, the person’s age and a particular interest rate. Three distribution “methods” have been approved by the IRS: required minimum distribution (RMD), amortization, and annuitization. Usually, the same distribution method must be maintained during the entire payment period. The goal is to use the method that produces the largest 72(t) payments with the smallest IRA balance. This typically results in selecting either the amortization or annuitization method, because the RMD method usually produces a smaller payment.
But what if a market downturn caused the balance of the IRA to severely decline, resulting in the annual 72(t) payments becoming a much larger percentage of the IRA balance? There is relief. IRS Revenue Ruling 2002-62 permits a one-time switch from either the amortization or annuitization methods to the RMD method. This may be appropriate in 72(t) situations where the IRAs has shrunk due to a stock market downturn.
Note that if the switch is made to the RMD method, it is permanent until the end of the original 72(t) payment period. Any other changes would be considered a modification and result in retroactive penalties. Also, be aware that, while 72(t) payments cannot be converted to a Roth IRA, the entire IRA from which the 72(t) payments are coming CAN be converted to a Roth IRA. If the IRA has lost substantial value, converting the account during a market downturn could be a wise tax planning decision. Just be sure to continue with the same payment schedule.
Example: David, age 58, has been consistently taking 72(t) withdrawals from his IRA for three years under the amortization method. With a recent market downturn, his investments have lost considerable value. His required 72(t) payments are now eating up a much higher percentage of his account. To reduce the draw on his IRA, David elects to switch to the RMD method to calculate the remainder of his 72(t) payments. David must still adhere to the original 5-year payment period and can make no other modifications during that time.
For anyone considering a 72(t) series of substantially equal periodic payments, please be hyper careful. The same holds true for anyone with an existing 72(t) looking to make the one-time switch outlined above. One false step and years of retroactive 10% penalties could come due.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/72t-switching-methods-in-a-market-downturn/

Weekly Market Commentary
-Darren Leavitt, CFA
Global financial markets rallied on several reports that suggested significant progress was being made on trade negotiations. Vice President Vance met with Indian Prime Minister Modi on his visit to India. The two leaders announced they were in advanced talks on tariffs and close to a deal being forged. Similarly, negotiations with South Korea, Japan, and Australia seem to be moving in the right direction. President Trump and Treasury Secretary Bessent softened their tone on Chinese tariffs when Trump announced that he would not play “hardball” with China and expected that there would be a significant reduction in the current tariffs imposed on their exports. Trump also backed off the idea of terminating Fed Chairman Powell, but continued criticizing the Fed for not cutting rates, suggesting they were late to the party again. The idea of an independent Fed is extremely important for the global markets, and much of the sell-off we saw a couple of Fridays ago and last Monday was a prelude to a much larger sell-off we would expect if that tenet were violated.
First quarter earnings continued to roll in with mixed results. In many cases, guidance from corporations has been lowered and at some companies even removed, given the uncertainty in the current economic outlook. Mega-cap Technology issues led the way this week on the back of earnings announcements from Tesla and Google. Tesla’s results missed the mark but rallied on the news that Elon Musk would curtail his efforts at DOGE and refocus his efforts on his companies. Tesla rallied 18.1% on the week. Google’s results came in better than expected and put a bid into the rest of the mega-cap tech space. Google was up 6.8% after their earnings call. This week, MMM, Texas Instruments, Netflix, and Boeing were notable gainers. IBM, Raytheon, Northrop Grumman, and SAIA were notable disappointments. We continue to monitor the guidance companies offer and their effects on the street’s expectations for aggregate earnings forecasts for the S&P 500. Despite seeing several strategists take down their estimates, the consensus estimate for S&P 500 earnings growth is still 8% for the year.
The S&P 500 gained 4.6%, the Dow rose by 2.5%, the NASDAQ increased by 6.73%, and the Russell 2000 was higher by 4.09%. The S&P 500’s 5500 level, a key technical resistance area, was retaken, possibly leading to another leg higher for the index. The S&P 500 has gained 10.11% from its lows in early April but is still off 14.27% from its February highs. The Index is down 6.06% year to date. Despite an awful week for US Treasury auctions, Treasuries rallied across the curve with no real maturity bias. The 2-year yield fell four basis points to 3.76%, while the 10-year yield lost six basis points to 4.27%. Oil prices fell by 1.3% for $0.88 to close at $63.04 a barrel. Gold prices eclipsed $3500 an Oz before reversing course to close the week lower by $30.20 to $3297.60 per Oz. Copper prices increased by $0.15 to close at $4.85 per Lb. Bitcoin prices increased by 10.59%, closing at ~$95,000. The US Dollar index increased by 0.3% to 99.51. The VIX fell by 4.81%.
The economic calendar was relatively quiet this week. The final reading of the University of Michigan’s consumer sentiment index for April was slightly better than expected, at 52.2, but it remained at historically low levels. The survey also showed an uptick in 1-year inflation expectations to 6.5%, the highest level since 1991. S&P Global Manufacturing ticked higher to 50.7 from 50.2. Their Services reading came in at 51.4, down from the prior reading of 54.4. March New Home Sales came in at 724K units, above the consensus estimate of 684K. Initial Jobless Claims increased by 6k to 222k, while Continuing Claims fell by 37k to 1.841m.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

6 things to consider when saving for retirement.
Retirement is a time to enjoy your golden years and live life to the fullest. But in order to do that, it’s important to start planning early. Retirement savings can be a complex topic, but there are a few key things to keep in mind to get started.
1. Start saving early
The earlier you start saving for retirement, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time thanks to the power of compound interest.
2. Set retirement goals
How much money do you need to save for retirement? This will depend on a number of factors, such as your desired lifestyle, your current income and expenses, and your retirement age. Once you have a goal in mind, you can start to develop a plan to reach it.
3. Choose the right retirement savings accounts
There are a variety of retirement savings accounts available, each with its own advantages and disadvantages. Some popular options include 401(k) plans, individual retirement accounts (IRAs), and Roth IRAs. It’s important to choose the right account for your individual needs and goals. If your employer offers a 401(k) match, be sure to contribute enough to receive the full match. It’s free money!
4. Invest your retirement savings wisely
Once you have chosen a retirement savings account, you need to invest your money. There are a variety of investment options available, such as stocks, bonds, and mutual funds. It’s important to choose investments that are appropriate for your risk tolerance and time horizon.
5. Rebalance your portfolio regularly
As you get older, your risk tolerance may change. It’s important to rebalance your investment portfolio regularly to ensure that it still meets your needs and goals.
6. Get professional help
If you need help planning for retirement, consider working with an investment professional. An investment professional can help you assess your needs, choose the right retirement savings accounts, and develop an investment strategy.
It’s important to remember that every little bit you can put away for your retirement helps. By following these tips, you can start saving for retirement today and help create a secure future for yourself.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult with an investment professional to develop a retirement savings strategy that is right for you.
https://www.newyorklife.com/newsroom/consider-when-saving-for-retirement
RMD Calculation and Direct Roth Conversions: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
At age 71, I’m not yet subject to required minimum distributions (RMDs) from my IRA or workplace retirement accounts. However, I am required to take annual RMDs from a pre-2020 inherited IRA and a pre-2020 inherited Roth IRA.
Am I required to take the RMDs from these inherited accounts prior to doing a Roth conversion from my own IRA? Does that change in the year in which I turn age 73?
Answer:
No. You are not required to take RMDs from your inherited accounts before doing a Roth conversion from your own IRA. That will not change starting in the year you turn age 73. But before doing a Roth conversion in that year (or in a subsequent year), you will need to first take the RMD from your own IRA.
Question:
I am 69 years old and plan to retire soon. I have an old Keogh Profit-Sharing Plan that I want to start converting into a Roth IRA.
I’m getting conflicting answers on how this can be done properly. One IRA custodian tells me that I must convert it first into a traditional IRA and then convert it into a Roth. Another IRA custodian tells me that I can convert it directly into a Roth. Both options require me to pay full income taxes on the amount being transferred.
Can you give me some guidance on what you think is the right way to do this?
Thanks,
Mike
Answer:
The first custodian gave you bad advice. For many years, the tax law has allowed direct conversions of retirement plan distributions to a Roth IRA. So, there is no need to first roll over your Keogh plan funds to a traditional IRA before doing the conversion.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/rmd-calculation-and-direct-roth-conversions-todays-slott-report-mailbag/
After-Tax 401(k) Contributions Shouldn’t Be an Afterthought
By Sarah Brenner, JD
Director of Retirement Education
With the popularity of Roth 401(k) contributions, after-tax (non-Roth) employee contributions have gotten short shrift. But, if your plan offers them, after-tax contributions are worth considering. They can significantly boost your retirement savings and can sometimes be funneled into Roth accounts while you’re still working.
After-tax contributions are contributions you make from already-taxed salary. Unlike earnings on Roth 401(k) contributions, earnings on after-tax contributions are always taxable. 401(k) and 403(b) plans are allowed to offer after-tax contributions, but many do not.
One reason your plan may not offer after-tax contributions is because of IRS nondiscrimination rules. Those rules limit the amount of after-tax contributions that a high-paid employee can make, based on the amount that low-paid employees make. Since high-paid employees are the ones most likely interested in making after-tax contributions, the nondiscrimination test is often difficult to pass.
However, after-tax contributions always work for solo 401(k) plans because those plans aren’t subject to nondiscrimination rules.
If your plan offers after-tax contributions, you can potentially put away large amounts. You are limited in the amount of elective deferrals (pre-tax and Roth) you can make in any calendar year (for 2025, $23,500; $31,000 if age 50 or older; and $34,750 if ages 60-63). Importantly, after-tax contributions do not count against this limit. Those contributions, along with elective deferrals and employer contributions (such as matches), do count against another annual dollar limit. But that dollar limit is much higher – for 2025, $70,000, and even more if you’re older. So, even if you’ve maxed out on pre-tax and Roth contributions and have received an employer contribution, you’ll likely still have enough room to make substantial after-tax contributions.
As mentioned earlier, the downside to after-tax non-Roth contributions is that earnings are always taxable. However, your plan may allow you to move your after-tax funds into a Roth account before you accumulate considerable earnings. This can be done through either an in-plan Roth conversion or the “mega backdoor” Roth option.
An in-plan Roth conversion allows you to convert your after-tax dollars (and any other non-Roth dollars) into the 401(k) plan’s Roth account. You’ll pay taxes on the earnings in the year of the conversion, but the Roth account can later be withdrawn tax-free or rolled over to a Roth IRA. The mega backdoor Roth strategy allows you to move after-tax 401(k) funds directly from the plan into a Roth IRA. Once again, you’ll pay taxes on any earnings, but withdrawals from the Roth IRA down the road can be tax-free.
If you still have after-tax contributions in the 401(k) when you leave employment, you can do a split tax-free rollover. This allows you to roll over the after-tax contributions themselves (and any Roth 401(k) funds) to a Roth IRA, while rolling over pre-tax dollars, including earnings on after-tax dollars, to a traditional IRA.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/after-tax-401k-contributions-shouldnt-be-an-afterthought/
3 Retirement Account Moves You Can Still Do for 2024
By Sarah Brenner, JD
Director of Retirement Education
The April 15 tax-filing deadline has come and gone. However, for some 2024 retirement account planning strategies, it’s not too late! There is still time beyond the April 15 deadline. Here are three retirement account moves for the 2024 tax year that are still available to make in 2025.
1. Correct a 2024 IRA Contribution
For IRA owners who are now discovering they have an excess IRA contribution for a 2024 IRA, there is still time to correct the contribution and avoid a 6% excess contribution penalty. This can be done by withdrawing or recharacterizing the 2024 contribution, plus net income (or loss) attributable, by October 15, 2025.
October 15 is also the deadline to remove or recharacterize 2024 IRA contributions that are not actually excess contributions but are, instead, simply unwanted. After October 15, 2025, this flexibility for 2024 IRA contributions goes away.
The October 15, 2025, deadline for correcting 2024 contributions applies to anyone who timely files their 2024 tax return. This is true even if you do not have an extension past the standard April 15 deadline.
2. Make a 2024 SEP Contribution
There is also additional time for those looking to establish and contribute to a SEP IRA plan for 2024. While contributions to a traditional or Roth IRA must be made by the tax-filing deadline, a SEP IRA plan can be established and funded at any time up to the business’s tax-filing deadline, including extensions.
The SEP limit for 2024 is 25% of up to $345,000 of compensation, limited to a maximum annual contribution of $69,000. (For 2025, these numbers increase to $350,000 of compensation, limited to a maximum contribution of $70,000.)
3. Make a 2024 Employer Contribution to a Plan
If a business has employees, any employee contributions to a retirement plan for 2024 must have already been made. Employee salary deferrals have strict deadlines that require deferrals to be deposited into the plan throughout the year soon after the contribution is withheld.
However, employer contributions for 2024 to retirement accounts have a later deadline. Employer contributions can still be made until the business’s tax-filing deadline, including extensions. This rule applies to employer contributions to both qualified plans, such as 401(k) plans, and SIMPLE IRA plans.
https://irahelp.com/slottreport/3-retirement-account-moves-you-can-still-do-for-2024/

Weekly Market Commentary
-Darren Leavitt, CFA
Equity markets regressed during the abbreviated trading week, while US Treasuries found some footing. Trade policies continued to influence markets and foster uncertainty. Little progress was made on country-specific tariffs, while several announcements contradicted prior trade rhetoric. Last weekend, the Trump administration announced that Smartphones, Laptops, Semiconductors, Solar Cells, and other electronics produced in China would avoid certain levies, catalyzing buying in Apple and NVidia on Monday. Later in the week, the announcement that a Section 232 investigation from the Trade Expansion Act would proceed on Semiconductors, Semiconductor equipment, Pharmaceuticals, and Pharmaceutical ingredient companies dampened investors ‘ interest. NVidia shares were hammered on the announcement that the company would take a $5.5 billion charge on their H20 chips as tighter export controls to China were implemented. On the other hand, auto makers were bid higher on headlines that tariff adjustments may come on certain auto parts.
First-quarter earnings announced over the week came with mixed results. Goldman Sachs gained 9.5% as it topped estimates while announcing record trading revenue. Citibank and Bank of America also had positive results. Dutch semiconductor equipment company ASML saw its shares throttled on a weaker-than-expected outlook. Similarly, United Healthcare shares plummeted more than 20% after their results missed the mark and management reduced estimates for the full year.
Fed Chairman Jerome Powell’s presentation at the Economic Club of Chicago was not well received by the markets or the White House. Powell said he did not think much progress would be made on the Fed’s dual mandate of full employment and inflation this year, while also suggesting there would not be a “Fed Put” for the markets. President Trump criticized the Chairman and called for his resignation, or he would pursue his termination. A test of the Fed’s independence would not be good for markets.
The S&P 500 lost 1.4%, the Dow shed 2.5%, the NASDAQ lost 2.3%, and the Russell 2000 gained 0.9%. The belly of the US Treasury curve outperformed, while the entire curve saw lower yields. Treasury Secretary Bessent said there was no evidence of Sovereigns selling US Treasuries in the prior week and noted the strong indirect or foreign demand in last week’s Treasury auctions. The 2-year yield fell by fifteen basis points to 3.8%, while the 10-year yield fell by sixteen basis points to 4.33%. Oil prices increased by 3.85% to close at $63.92 a barrel. Gold prices fell by 2.5% or $81.20 to $3,327.80 per ounce. Copper prices increased by 4.2% to close at $4.70 per Lb. Bitcoin prices increased by ~$1,000, closing at $84,500. The US Dollar index fell by 0.3% to 99.52.
The economic calendar was pretty quiet but featured a stronger-than-expected Retail Sales print. The headline number increased by 1.4% versus the consensus estimate of 1.3%. The Ex-auto print increased 0.5% versus the estimated 0.2%. A pull forward in demand due to the anticipated tariffs took some of the shine off the better numbers, but confirmed what many bank CEOs conveyed on their earnings calls—the consumer is still out there spending. Initial claims fell by 9k to 215k, while continuing claims increased by 41k to 1.885m. Housing starts came in at 1.324m, well below the consensus estimate of 1.418m. Single-unit starts fell 14.8% from the prior month. Building permits were slightly better than expected at 1.482m. Both the Empire State Manufacturing and Philly Fed data showed weakness in the manufacturing sector.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

The Transition to Retirement: 11 Exceptional Tips for the Average Joe or Jane
Baby boomers were never “average.” The generation wears uniqueness is a badge of honor. However, approximately 10,000 boomers turn 65 everyday. While we each have specific goals, ideas and financial circumstances, there are some things that apply to us all.
Here is some exceptional advice for both the average and extraordinary guy, gal or duo as you transition to retirement.
1. Get the Big Universal Decisions Right
As you transition to retirement, almost everyone will make a lot of critical decisions including: When to stop working? When to start Social Security? Where should you retire? And more…
Be thoughtful about your choices and try out different scenarios – especially if you do not have significant savings. These decisions can have a dramatic impact on your quality of life in retirement:
- Delaying the start of Social Security can add almost $100,000 to your bottom line. Try different Social Security start ages in the Boldin Retirement Planner, then compare your net worth and out of money age in the different scenarios to figure out the best time for YOU to start to bring in the most money over your lifetime.
- Working a little longer is a triple treat: 1) You earn more income for a longer period of time. 2) You can save more. 3) You can delay tapping existing savings.
- Where will you retire? If you own a home, it could save your retirement. Consider if and how you might tap into your home equity.
2. Tiptoe into Retirement Instead of Jumping Right In
Retiring used to be a big event with parties, gifts, an abrupt end of work, and the beginning of a lot of free time. However, these days more and more people are switching to retirement jobs or working part time before they quit the labor force entirely.
Other ways people tiptoe into retirement include:
- Taking a long vacation or sabbatical to recharge instead of retiring.
- Trying out (renting in or spending time at) a retirement destination, before packing up and moving.
- Making sure you can live on the budget you need to stick to in retirement.
3. Think About Passive Income
Passive income is exactly what it says it is – income that you earn without very much effort. The most popular (and perhaps profitable) form of passive income is a real estate investment. However, you don’t necessarily have to be able to afford an apartment building to benefit from passive income.
4. If You Have Savings, Think About Your Goals and How You Are Invested
There are a lot of different philosophies about how people approaching and already in retirement should be invested.
Some of the advice you hear includes:
- Your savings should be held in low risk (and probably low return) investments.
- Preserve your capital and live off interest.
- Think about systematic withdrawals so that your income from investments remains steady over your lifetime.
- Make sure your investments can grow to keep pace with inflation.
- Focus on income from investments, not asset growth.
The contradictory and sometimes irrelevant advice can be very confusing. The reality is that there is a no-one-size-fits-all all approach for retirement investments.
The best investment strategy for you will depend on the value of your assets, how much income you have from other sources, your monthly expenses, your goals for retirement, your desire for leaving an estate, and more.
You can try out multiple scenarios in the Retirement Planner. Experiment with different investment return scenarios and more. The transition to retirement may also be a good time to discuss your situation with a financial advisor. Just be sure to work with someone who has your financial interests in mind – not their own financial gain.
5. Prepare for a Long Haul – Set Up a Long Term Budget
Retirement can be a long endeavor. If you retire at 65, you could easily spend 30 years enjoying life.
When you retire, you are agreeing to live off relatively fixed finances. As such, you really need to know how much you are going to spend when.
You will want to think about how your spending levels might change over time. Most people spend a little more when they first retire. Then, less as they get a little older. And finally more – mainly on healthcare – near the end of life. When thinking about your retirement budget, you also want to include any big one time expenses you might incur for things like education or travel.
The Retirement Planner let’s you do this kind of lifetime budgeting. Set as many different spending levels as you like. You can even set different levels of spending in more than 70 different categories and establish both nice to spend and necessary spending levels.
6. Consolidate and Simplify Accounts
If you have not already done so, the transition to retirement is a good time to consolidate your savings and banking accounts to simplify your money management.
Too many people enter retirement with old 401ks and IRAs. Having multiple accounts can be difficult to manage and it may increase the fees you are paying.
A few tips for consolidating your accounts:
- Ask a lot of questions about fees.
- Consider your investment options.
- Do rollovers VERY carefully to avoid withdrawal penalties.
7. Think About Friends and Family
With so much to think about as you transition to retirement, sometimes the most important parts of life like friends and family can get a little lost.
Social connections are one of the most important factors for your emotional and even physical health. And, many people really miss daily interactions with people when they stop working.
As you think through your retirement plans, be sure to factor in your loved ones.
- Will your retirement lifestyle decisions enable you to maintain your friendships?
- Do you have a plan for seeing people on a regular basis?
- If you are relocating, how will that impact your relationships?
- Will your children need or want financial support?
- Will they contribute to your retirement finances or long term care?
8. Start a Retirement Club
Have you ever benefited from networking for work? What about when you first had kids? Weren’t things a lot easier when you had other parents to talk with about diapers and being up in the middle of the night.
Wouldn’t it be nice to be able to chat and commiserate and brainstorm about retirement with your friends?
If this sounds appealing, maybe you could set up a retirement club – kind of like a book club, but you discuss retirement topics instead of the latest best seller. Possible themes for each meeting could include:
- Round the room sharing about what is good about your retirement plan and where you could use some help.
- Bring in an investment advisor to talk about your options.
- Discuss different Social Security options.
- Everyone shares a retirement article in advance of the meeting and you discuss what you read.
Research into financial literacy has found that your peers can have a huge impact on your success. In the same way having a work out buddy gets you exercising more, discussing finances with friends can be motivating.
9. Write or Update Your Estate Plans
Did you know that you need more than just a will? The will is important, but probably of bigger consequence to your own well being are your medical directives. What are your plans for a catastrophic medical event? What do you want to happen if you need some kind of long term care?
10. Don’t Be Afraid to Have Fun and Be Happy – Get Creative if Necessary
There is a lot to worry about as you transition to retirement.
Research from Merrill Lynch, “Leisure in Retirement, Beyond the Bucket List,” finds that most people have anxiety leading up to retirement, but find that once they take the plunge, they are very happy.
If you are worried about finances, dig deep and prioritize what is important to you. Keep your focus on your priorities and make sure you can do those things.
Just make sure that you are enjoying your time now, not only looking forward to the future. Here are 8 ideas for how to thrive as you transition.
11. Plan for How You Will Spend Your Time
Many people focus on the financial aspects of transitioning to retirement. However, it is really important for you to plan your retirement lifestyle. Retire to something, not just away from work.
Here are a few ways to find what to do in retirement or afford the most popular retirement activities:
- 14 ways to avoid retirement boredom
- 120 ideas for what to do in retirement
- 20 retirement travel ideas, including tips for for retirement travel on a budget.
- If you are worried about paying for rounds of golf, maybe work part time at the course to subsidize your hobby.
- Want to see the grandkids more? Can you move closer?
- 6 ways to find meaning and purpose in retirement
- Develop the right retirement planning mindset
Still worried? Studies find that having a retirement plan helps alleviate the stress.
https://www.boldin.com/retirement/transition-to-retirement-exceptional-tips/?utm_source=google&utm_campaign=21895021828&utm_content=720553230184&utm_term=&place=&net=g&match=&nr_a=google&nr_placement=&nr_creative=720553230184&nr_campaign=21895021828&nr_adgroup=173220351594&nr_keyword=&nr_adtype=c&nr_medium=PaidSearch&utm_medium=cpc&nr_product=NRC&nr_network=g&gad_source=1&gclid=CjwKCAjwktO_BhBrEiwAV70jXoONBuwwhjLo9gw10Qi5dZZrlX5jwODOSmo9uKgk-GObAPB5z11qSRoCoqsQAvD_BwE
Once-Per-Year Rollover Rule and RMD Aggregation: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
Question:
Are rollovers done by a spouse beneficiary subject to the once-per-year IRA rollover rule? The IRA funds were never distributed to me. They were directly transferred from my deceased husband’s IRA to my own IRA. Everything was done electronically at the same firm. I’m being told that the second transfer is taxable.
Camilla
Answer:
Hi Camilla,
The once-per-year rollover rule applies to 60-day rollovers between IRAs. It does apply to spouse beneficiaries; however, it is not a concern in your situation. You did not do any 60-day rollovers. Instead, you moved the funds from the inherited IRA to your own IRA by doing direct transfers. Direct transfers are not subject to the once-per-year rollover rule, so you do not have a problem.
Question:
I have a traditional IRA and four SEP IRAs. Can I calculate my total 2025 RMD and take that total out of one SEP IRA?
Dave
Answer:
Hi Dave,
Good news! Aggregation of required minimum distributions (RMDs) is permitted between traditional and SEP IRAs. You can take the total of all your 2025 RMDs from the traditional IRA or from any combination of the SEP IRAs.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/once-per-year-rollover-rule-and-rmd-aggregation-todays-slott-report-mailbag/
NUA: “Resetting” Cost Basis
By Andy Ives, CFP®, AIF®
IRA Analyst
The recent market ride has been nuts. It is certainly no fun for anyone who owns stock or stock funds. Many of us are experiencing the same sensation in our gut as when a roller coaster click, click, clicks to its apex and then plummets over the edge. (That’s why I don’t ride roller coasters anymore.) Wild swings in the market result in sleepless nights for many. But for those with a long-term view, there is a potential silver lining in this storm cloud.
Market dips can create positive opportunities with the net unrealized appreciation (NUA) tax strategy…but can also lead stock owners down the wrong path. When executed properly, the NUA strategy allows a person to pay ordinary income tax on the cost basis of company stock from his workplace retirement plan, and long-term capital gains on the appreciation. This could result in tens of thousands of dollars in tax savings. Forward-looking employees could view a dip in the price of the company stock in their 401(k) as an opportunity to “reset their basis.”
Example: Kyle, age 45, participates in the 401(k) offered by his employer, ABC Company. Within his 401(k) account, Kyle owns shares of ABC stock and has a current average cost basis of $40. When the market was at its peak, ABC stock reached $70 per share. However, with the recent downturn, ABC stock has slumped to $30 per share. Kyle sells all his ABC stock within his 401(k) and promptly buys back the shares at $30, thereby “resetting” his cost basis. (The “wash-sale rule” does not apply in this scenario.) If ABC stock rebounds over the next few years, Kyle has set himself up for a more favorable NUA distribution in the future.
Unfortunately, market volatility can also lead to panicked decisions. Others within ABC Company (from the example above) may not have been so level-headed as Kyle. The adage of “buy low, sell high” often gets reversed. A mistake would be to liquidate all 401(k) company stock shares while the markets are tumbling and to sit on the sidelines until conditions improve. But timing the market is impossible. Missing the rebound “bumps” on the way back up could significantly minimize returns (e.g., the Dow Jones spiked 2,963 points on April 9).
Additionally, selling out and buying back company stock at a higher share price could ruin what was previously a solid NUA opportunity.
Example: Nervous Nellie also works at ABC Company and has company stock in her 401(k). Nervous Nellie is a long-time employee with a cost basis of $20 per share. When the ABC stock price dipped to $30, Nellie could not take the volatility anymore. She dumped all her shares and stayed away until the news was more rosy. Ultimately, when ABC stock rebounded and settled in at $60 per share, Nervous Nellie reallocated her 401(k) and bought back into ABC. In her panic, Nervous Nellie reset her cost basis HIGHER, from $20 per share to $60. If an NUA transaction is in her future, Nellie’s actions will prove detrimental.
Before haphazardly panic-selling company stock, be sure to consult with a knowledgeable financial professional to assess your situation. Resetting NUA basis can go both ways.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/nua-resetting-cost-basis/
Still Waiting for IRS Guidance on IRA Self-Correction Program
By Ian Berger, JD
IRA Analyst
In the 2022 SECURE 2.0 legislation, Congress gave the IRS two years – until December 29, 2024 – to come up with rules allowing IRA owners to fix certain mistakes through self-correction. Alas, December 29, 2024 has now come and gone, and we’re still waiting for those rules.
Here’s the background: For a number of years, the IRS has had a program in place – the Employee Plans Compliance Resolution System (EPCRS) – that allows employers to correct errors made by their retirement plans. SECURE 2.0 legislation loosened EPCRS to make self-correction for plans even more widely available.
Importantly for IRAs, SECURE 2.0 also expanded EPCRS to permit self-correction of IRA mistakes. Self-correction allows correcting those errors without paying any penalty or even notifying the IRS, as long as correction is made in accordance with IRS rules.
This was exciting news! It is true that IRA owners already have the ability to fix certain IRA mistakes. For example, since 2016, the IRS has permitted “self-certification” to remedy rollovers made after the 60-day deadline in certain circumstances. In addition, the 25% penalty for missed required minimum distributions (RMDs) can be avoided if the IRA owner properly requests a waiver of the penalty.Finally, an excess IRA contribution can be corrected without penaltyif the contribution, plus attributable earnings or losses, is returned by October 15 of the following year.
But there are several other commonplace errors that currently cannot be corrected and would be prime candidates for EPCRS correction. These include the once-per-year rollover rule, nonspouse beneficiary 60-day rollovers, and modifications of 72(t) payment schedules.
In fact, in SECURE 2.0, Congress said that any “eligible inadvertent failure” related to an IRA (except for “egregious” errors) could be self-corrected. Congress even listed two specific examples of “eligible inadvertent failures” for which the IRS should allow self-correction. The first would allow a waiver of the 25% penalty on missed RMDs. As discussed above, the IRS already freely excuses this penalty if a waiver request is made, so it’s not clear how self-correction would fit in with that existing policy. The second would allow a nonspouse IRA beneficiary to return an inherited IRA that had been rolled over when, because of an “inadvertent error” by a service provider, the beneficiary believed a tax-free 60-day rollover was possible. Again, though, it’s not clear how far this relief will go.
All we can do is take comfort in the words of the late, great, Tom Petty: “The waiting is the hardest part.”
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/still-waiting-for-irs-guidance-on-ira-self-correction-program/

Weekly Market Commentary
-Darren Leavitt, CFA
Wow, what a week on Wall Street. Continued uncertainty regarding trade policy induced massive swings in the equity, bond, commodity, and currency markets. A 7% intraday swing in the S&P 500 on Monday was superseded by a 10.8% intraday move on Wednesday, the largest since 1982. The move came on President Donald Trump’s announcement of a 90-day pause on most new tariffs, excluding those imposed on China. China’s retaliatory measures on tariffs escalated the situation as both sides increased tariffs- 125% imposed on US imports and 145% on Chinese imports. The policy uncertainty increased fears of a recession, which has prompted several Wall Street strategists to lower their market forecasts. Oppenheimer, which had been the most bullish on the street, slashed their year-end estimates on the S&P 500 to 5950 from 7100, while JP Morgan cut their estimate from 6500 to 5700. A significant sell-off in US Treasuries alongside a sell-off in the US dollar brought concerns that foreign institutions are selling US assets and repatriating that capital. Trump categorized the bond market as “tricky” and acknowledged the White House was watching it and noted that “people were getting a little ‘queasy” from its sell-off. Notably, the fifty-basis-point increase in rates on the 10-year was the largest weekly move since 1982. JP Morgan’s CEO Jamie Diamond told investors on the bank’s earnings call that he was worried about a possible kerfuffle in the US Treasury market. We are watching the bond market closely as it holds the key to so many aspects of the overall market. If it gets into more trouble, there will be more trouble to come in other markets. The Federal Reserve Open Market Committee minutes revealed Fed Officials concerned about stagflation. At the same time, Fed rhetoric throughout the week suggested ample reason to wait on cutting rates given the state of inflation. Boston Fed President, Susan Collins, gave the market a boost on Friday after saying the Federal Reserve is “absolutely” ready to help stabilize the market if needed. First quarter earnings started with some of the largest financial institutions reporting results. Morgan Stanley, JP Morgan, and Blackrock had solid quarters while Wells Fargo’s results missed estimates.
The S&P 500 posted a gain of 5.7%, the Dow rose by 5%, the NASDAQ climbed by 7.3%, and the Russell 2000 was higher by 1.8%. US Treasuries were hammered across the curve but more so on longer tenured paper. The 2-year yield increased by twenty-eight basis points to 3.95% while the 10-year yield increased by fifty basis points to 4.49%. Oil prices fell by $0.47 to close the week at $61.55 but had traded as low as $55.40. Gold prices surged as the precious metal was sought for its safe-haven quality. Gold prices increased by $211.30 and closed the week at new record highs at $3245.90 per ounce. Copper prices increased by $0.12 to close at $4.51 per Lb. Bitcoin’s price increased by ~$700 to close at $83,427. The US Dollar index fell by 2.7% to 100.14, the lowest since April 2022.
The economic calendar featured inflation data with the Consumer Price Index and the Producer Price Index. Headline CPI fell by 0.1% in March and increased by 2.4% year-over-year, down from 2.8% in February. The Core reading increased by 0.1%, up 2.8% year-over-year versus 3.1% in February. Headline PPI decreased by 0.4% versus an estimated increase of 0.1% and was up 2.7% year-over-year versus 3.2% in February. Core PPI declined by 0.1% versus the consensus estimate of 0.3% and was up 3.3% versus 3.5% in February on a year-over-year basis. Initial Claims increased by 4k to 223k, while Continuing Claims decreased by 43k to 1.850 M. A preliminary look at the University of Michigan’s Consumer sentiment showed another decline to 53.5, the prior reading came in at 57.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
Rollovers and Required minimum Distributions: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
A 401(k) plan participant over age 73 wants to roll over his account to a new IRA. I understand that he must take a required minimum distribution (RMD) before the rollover. Is an additional RMD required in the same year from the IRA?
ANSWER:
If this person has no other IRAs besides the new one receiving the 401(k) funds, then no additional RMD needs to be taken from the IRA for this year. Reason being is that the IRA receiving the 401(k) rollover funds had a $0 balance on December 31, 2024. With no balance for the previous year’s end, there is no 2025 RMD on the IRA to calculate.
QUESTION:
I am turning age 73 this year and will need to take my RMD. I have three different investment firms for my IRAs, SEP IRA plan and a 457(b) plan. My question is: Do I have to take my required minimum distribution (RMD) from each plan/firm or can I take the full amount from any one of the accounts?
Thank you,
Dean
ANSWER:
Dean,
Your question is all about the RMD aggregation rules. Some accounts can be aggregated for RMD purposes, and some cannot. In your specific scenario, the IRAs and SEP IRA account RMDs can be aggregated. While the RMD must be calculated individually for each IRA and the SEP account, all or any portion of the aggregated total can be taken from any combination of the IRAs and SEP. The 457(b) RMD, on the other hand, cannot be aggregated with any other account. That RMD must be taken from the 457(b) plan.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/rollovers-and-required-minimum-distributions-todays-slott-report-mailbag/

Is 2025 a Bad Year To Retire With the Stock Market in the Dumps?
2025 may seem like a bad year to retire if you’re looking at the stock market alone. But that’s not the only consideration.
It sure seems like a bad year to retire. The stock markets are falling, taking 401(k) balances along with it, tariffs are in place, federal government workers are losing jobs and egg prices are up about 59% year-over-year.
If you were planning to retire in 2025, recent economic developments may give you pause. After all, who wants to exit the workforce with less money to spend in retirement? Especially since it can easily last over twenty years.
Against that backdrop, 2025 may seem like a terrible year to retire, but whether that’s true for you comes down to how much you’ve saved, where you draw money from in retirement and how much you plan to spend during your golden years.
“For people who are planning to spend principal money during their retirement years, then this is a tougher year to start,” says Christopher R. Manske, a certified financial planner and president of Manske Wealth Management. “But if they do not need to spend money, then 2025 is a great year to retire.”
Why 2025 could be a bad year to retire given the stock markets
When retiring in a down market, you must be mindful of the sequence-of-returns risk. That occurs when poor investment returns early in retirement negatively impact your retirement savings over the long run. In that scenario, you may need to sell parts of your portfolio to meet your income needs, likely at a low point. As a result, you could end up selling more than originally planned to compensate for the shortfall.
“So far 2025 is shaping up to potentially be a future period in which withdrawal rates are lower because the markets are going down,” says David Blanchett, managing director, portfolio manager and head of retirement research for PGIM DC Solutions. “The markets have done really well for a long time and was [sic] due for at least some kind of correction.”
The question, says Blanchett, is what flexibility do you have in how and when you make withdrawals from your portfolio in retirement? Will you have enough money for it to last your lifetime? “If you have to withdraw from the portfolio and returns are down 20%, that ultimately is a double whipping,” he says.
Another risk of retiring in a weak market is becoming overly conservative to staunch a bleeding portfolio. That may prompt you to sell all your positions and move to cash, exacerbating your losses because you’re not giving the portfolio time to recover.
If history is any evidence, investors who stay the course in down markets tend to recoup their losses and then some. That was the case during the Great Recession of 2007-2009 and the early days of the COVID-19 pandemic.
“Often retirees get uber-conservative and move into cash and lock in their losses. Historically, the right play is to give the portfolio a chance to recover,” says Blanchett. He says retirees who do move to cash tend to commit the cardinal investing sin: they sell low and buy high. All of that could mean less money to live off in retirement.
Plus, if you do have to reenter the workforce because you are running out of money, you may have a difficult time getting a job comparable to your old one. You might even have to take anything to bring in cash. That’s a recipe for a miserable retirement.
“I think a great way to look at this is the simple question: do I have enough income coming in, without selling any holdings, to cover my expenses,” says Manske. “If you don’t see any need to sell a single holding for the next three years, then there’s no need to wait. If you do see the need to sell, then you might seriously consider waiting to retire.”
Why 2025 may be a good year to retire
Stocks rise and stocks fall. If you have been doing your job by saving for the long term, diversifying your portfolio and keeping your debt in check, then 2025 is a perfectly fine time to retire.
After all, inflation is stable, at least for now. The Consumer Price Index for February increased by 2.8% year over year, lower than economists expected — and it’s yet to be determined how tariffs will impact everyday goods and services.
But before you make the leap, Emily Irwin, head of Wells Fargo’s advice center, says to do a pulse check of where you’re at to ensure you can withstand potential losses in your portfolio in the first few years of your retirement.
Here are some key questions you should ask yourself.
- Have I been maxing out my 401(K) and making catch-up contributions?
- Have I worked with a professional adviser to ensure I’m taking advantage of tax structures?
- Is my living situation affordable and stable?
- Finally, can I emotionally handle a decline in my portfolio when I no longer collect a paycheck?
Irwin suggests reviewing your retirement plan and running scenarios. Will you have enough cash in retirement if the portfolio is down 10%? If you start taking 401(k) or IRA distributions and they are depleted, will you still be OK?
“The purpose of retirement is to move on to the next chapter, whether that’s to spend time with family, travel or whatever your next chapter is. If you don’t think you will enjoy it, punt until next year,” says Irwin. “If you can compartmentalize noise, you’ve done the right things, and you don’t need to make any trade-offs based on how you saved over the last few decades,” then full steam ahead with your retirement plan.
https://www.kiplinger.com/retirement/is-this-a-bad-year-to-retire
Will Market Volatility Mean RMD Waivers for 2025?
By Sarah Brenner, JD
Director of Retirement Education
Recent turmoil in the markets has hit many retirement savers hard as they see their IRA and 401(k) balances rapidly shrinking. For many, the age-old advice to stay the course for the long term and not cash out too soon applies, but for those who are age 73 or older, the rules requiring required minimum distributions (RMDs) present a hurdle.
2025 RMDs
Under current tax rules, IRA owners and many participants in employer plans must start taking RMDs once they reach the year in which they turn age 73. (The first RMD can be delayed until the following April 1, but then you would have two RMDs due in the next year.) Some plan participants can also delay RMDs if they are still working.
To calculate your 2025 RMD, you divide the December 31, 2024, balance of your account by the factor that corresponds with your age on the IRS Uniform Lifetime Table. Here is the issue: Due to recent market losses, many have seen their account balances decrease sharply from where they were at the end of 2024. This means taking an RMD calculated on a much bigger balance from a significantly smaller account.
RMD Waivers
Will retirement savings get any relief from this 2025 RMD hit?
In the past, when the markets have experienced very severe declines, Congress has stepped in and waived RMDs for the year. We saw this happen in 2009 during the Great Recession and then again in 2020 due to the global pandemic. As of right now, it is too early to tell if similar relief will be available in 2025, but the fact that this happened before is worth noting.
In these times of market volatility, retirement savers may want to delay 2025 RMDs until later in the year. Retirement account balances may have recovered by then, or Congress may act and grant some relief, as they have done before.
Stay Tuned
At the Slott Report, we have heard from many IRA owners and plan participants who are concerned about their 2025 RMDs in these times of market losses. We will be following any developments on this issue closely. Stay tuned for updates!
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/will-market-volatility-mean-rmd-waivers-for-2025/
Who Can Use a 10% Penalty Exception?
By Andy Ives, CFP®, AIF®
IRA Analyst
As a follow up to the March 26 Slott Report entry that included a full list of the 10% early withdrawal penalty exceptions (“10% Penalty Exceptions: IRAs and Plans”), here we get a little deeper into the weeds on some of the nuances of certain exceptions. As mentioned in the March 26 article, some exceptions apply to plans only, some to IRAs only, and some to both. Taking that concept a bit further, some exceptions apply to the account owner only, and some to certain extended family members of the account owner.
Not only must a person know which exceptions apply to which accounts, but they must also recognize who can leverage these exceptions. We have seen countless situations where a misunderstanding has led to the exception being denied. For example, in a recent court case, an IRA owner under the age of 59½ took a distribution from his account and claimed the disability exception. He used the dollars to cover expenses for his disabled wife. And therein lies the problem. The disability exception is applicable to the IRA owner only. Even though the distributed money was used to cover the legitimate costs for taking care of a disabled person (the wife), the IRA owner (husband) was not disabled. To qualify for the exception, the withdrawal needed to come from the disabled wife’s account. The 10% penalty exception was denied.
Like the disability exception, other exceptions available to the account owner ONLY include birth or adoption, terminal illness, active reservists, age 55, and the 72(t) substantially equal periodic payment exception. Meaning, the account owner himself must be the one who is terminally ill or adopting a child. Other exceptions are applicable to the account owner AND certain extended family members. These include the following:
- Higher Education (IRAs only). The 10% penalty on the IRA distribution can be avoided if the higher education costs are for the IRA account owner, his spouse, child, or grandchild of either the owner or spouse. Nephews, cousins and siblings of the IRA owner do not qualify.
- First-Time Homebuyer (IRAs only). For the purchase of a home belonging to the IRA owner, his spouse, any child, grandchild, or ancestor of the IRA owner or his spouse. Again, people like nephews, cousins and siblings of the IRA owner do not qualify.
- Medical Expenses over 7.5% of adjusted gross income (Plans and IRAs). This exception is used for expenses incurred by the account owner, spouse or dependent. Just be careful with timing. The medical expenses must be paid in the same year as the distribution.
- Domestic Abuse (Plans and IRAs). The IRA owner himself does not need to be the victim to qualify for this exception. The abuse could be inflicted on the account owner’s child or another family member living in the household.
- Financial Emergencies (Plans and IRAs). This exception is for distributions necessary to meet “unforeseeable or immediate financial needs relating to personal or family emergencies.” Hence, it is available for a family member’s emergency, not just those of the account owner.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/who-can-use-a-10-penalty-exception/

Weekly Market Commentary
-Darren Leavitt, CFA
Global financial markets tumbled last week as investors moved out of risk assets, fearing that a worldwide trade war would ensue after Trump’s tariffs were higher than anticipated. Thursday and Friday’s market action resulted in a $5.4 trillion loss in US market capitalization. Q1-2025 ended on Monday, marking the worst quarter since 2022, and March was also the worst month since 2022. The first quarter was also the worst quarter for US stocks when compared to the rest of the world’s equity indices since 2009. Have we seen peak uncertainty in the markets? That is the question many on Wall Street are contemplating. Now that the US has announced its tariffs, will other countries retaliate with their own tariffs? China imposed a 34% tariff in response to the announcement that the US would levy an additional 34% on Chinese goods, resulting in an overall duty of 54% on Chinese goods. On the other hand, Vietnam and Cambodia announced that they would eliminate tariffs on US goods and sought to negotiate with the US to remove the announced tariffs. I am in the camp that negotiations will be ongoing, and in the end, overall global tariffs will be reduced. That said, the current narrative is that these announced tariffs will increase inflation, slow global growth, and perhaps tip several economies into recession. According to a survey from Bloomberg, economists have increased the probability of recession in the next year to 30% from 20% at the end of 2024. The idea of slower growth means that corporate earnings are likely to be revised lower in the coming months as first-quarter earnings are announced. This may lead to another leg lower for the market, although some of this has likely already been priced into the market. Investors should expect increased volatility in the coming weeks as retaliatory tariffs are announced and negotiations result in new levels of duties. The volatility index (VIX) spiked to 45, the highest level since the Covid-19 pandemic hit the markets in March 2020. I would expect some moderation in the VIX over the coming days and weeks, but I anticipate it will remain elevated for the next couple of months.
The S&P 500 lost 9.1%, the Dow shed 7.9%, the NASDAQ tumbled 10%, entering a bear market, falling more than 20% from its recent highs, while the Russell 2000 gave back 9.7%. It was just an ugly week on Wall Street. The Information Technology sector lost 11.4%, the Financials Sector shed 11.4%, and the Energy Sector fell by 15%. All 11 S&P 500 sectors fell on the week. US Treasuries did offer a safe-haven quality. The 2-year yield fell by twenty-four basis points to 3.67%, while the 10-year yield fell by twenty-seven basis points to 3.99%. Interestingly, the market now has priced in a 50% probability that the Federal Reserve will cut its policy rate by 100 basis points by the end of the year. Commodities offered no safe haven for investors. Gold prices dropped from their all-time highs by 2.5% or $78.50 to close at $3,034.60. Oil prices hit a four-year low after falling 10.6% or $7.32 to close at $62.02 a barrel. Copper prices fell by 14.5% to close at $4.39 per Lb. Bitcoin’s price increased by $200 to close at $82,962. The US Dollar index fell by 1.1% to close at 102.89. The Yen, Euro, and Swiss Franc were all bid higher on the week.
The Employment Situation report was the highlight of this week’s economic calendar. Non-farm payrolls came in much better than expected at 228,000 versus the consensus estimate of 130,000. Private Payrolls were also better, coming in at 209,000 versus the estimated 120,000. The Unemployment rate ticked higher to 4.2% from 4.1%. Average Hourly earnings were in line with expectations of 0.3%, as was the average workweek at 34.2 hours. In aggregate, this was a good report; however, revisions to the prior two months of data were lower and cast a slight shadow over the overall report. ISM Manufacturing fell into contraction with a reading of 49, down from the previous figure of 50.3, and concerns about prices paid were noted by several economists. ISM Services remained in expansion but just barely, coming in at 50.8, down from the prior reading of 53.5. Job openings fell to 7.568 million from 7.762 million. Initial Jobless claims fell by 6k to 219k, while Continuing Claims increased by 56K to 1.903 million- the highest level since November of 2021.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

Weekly Market Commentary
-Darren Leavitt, CFA
Global financial markets tumbled last week as investors moved out of risk assets, fearing that a worldwide trade war would ensue after Trump’s tariffs were higher than anticipated. Thursday and Friday’s market action resulted in a $5.4 trillion loss in US market capitalization. Q1-2025 ended on Monday, marking the worst quarter since 2022, and March was also the worst month since 2022. The first quarter was also the worst quarter for US stocks when compared to the rest of the world’s equity indices since 2009. Have we seen peak uncertainty in the markets? That is the question many on Wall Street are contemplating. Now that the US has announced its tariffs, will other countries retaliate with their own tariffs? China imposed a 34% tariff in response to the announcement that the US would levy an additional 34% on Chinese goods, resulting in an overall duty of 54% on Chinese goods. On the other hand, Vietnam and Cambodia announced that they would eliminate tariffs on US goods and sought to negotiate with the US to remove the announced tariffs. I am in the camp that negotiations will be ongoing, and in the end, overall global tariffs will be reduced. That said, the current narrative is that these announced tariffs will increase inflation, slow global growth, and perhaps tip several economies into recession. According to a survey from Bloomberg, economists have increased the probability of recession in the next year to 30% from 20% at the end of 2024. The idea of slower growth means that corporate earnings are likely to be revised lower in the coming months as first-quarter earnings are announced. This may lead to another leg lower for the market, although some of this has likely already been priced into the market. Investors should expect increased volatility in the coming weeks as retaliatory tariffs are announced and negotiations result in new levels of duties. The volatility index (VIX) spiked to 45, the highest level since the Covid-19 pandemic hit the markets in March 2020. I would expect some moderation in the VIX over the coming days and weeks, but I anticipate it will remain elevated for the next couple of months.
The S&P 500 lost 9.1%, the Dow shed 7.9%, the NASDAQ tumbled 10%, entering a bear market, falling more than 20% from its recent highs, while the Russell 2000 gave back 9.7%. It was just an ugly week on Wall Street. The Information Technology sector lost 11.4%, the Financials Sector shed 11.4%, and the Energy Sector fell by 15%. All 11 S&P 500 sectors fell on the week. US Treasuries did offer a safe-haven quality. The 2-year yield fell by twenty-four basis points to 3.67%, while the 10-year yield fell by twenty-seven basis points to 3.99%. Interestingly, the market now has priced in a 50% probability that the Federal Reserve will cut its policy rate by 100 basis points by the end of the year. Commodities offered no safe haven for investors. Gold prices dropped from their all-time highs by 2.5% or $78.50 to close at $3,034.60. Oil prices hit a four-year low after falling 10.6% or $7.32 to close at $62.02 a barrel. Copper prices fell by 14.5% to close at $4.39 per Lb. Bitcoin’s price increased by $200 to close at $82,962. The US Dollar index fell by 1.1% to close at 102.89. The Yen, Euro, and Swiss Franc were all bid higher on the week.
The Employment Situation report was the highlight of this week’s economic calendar. Non-farm payrolls came in much better than expected at 228,000 versus the consensus estimate of 130,000. Private Payrolls were also better, coming in at 209,000 versus the estimated 120,000. The Unemployment rate ticked higher to 4.2% from 4.1%. Average Hourly earnings were in line with expectations of 0.3%, as was the average workweek at 34.2 hours. In aggregate, this was a good report; however, revisions to the prior two months of data were lower and cast a slight shadow over the overall report. ISM Manufacturing fell into contraction with a reading of 49, down from the previous figure of 50.3, and concerns about prices paid were noted by several economists. ISM Services remained in expansion but just barely, coming in at 50.8, down from the prior reading of 53.5. Job openings fell to 7.568 million from 7.762 million. Initial Jobless claims fell by 6k to 219k, while Continuing Claims increased by 56K to 1.903 million- the highest level since November of 2021.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
Deferral of First RMD and RMDs for Roth IRAs: Today’s Slott Report Mailbag
Question:
My wife turns 73 years old in August 2025. My understanding is that she has until April 1, 2026, to take her first required minimum distribution (RMD), in which case she would wind up taking two RMDs in 2026.
The RMD for 2025 is approximately $24,000. My question is: Can she can take a partial RMD of, say, $20,000 in 2025 and the $4,000 balance in 2026? Or, if she takes anything out of the IRA in 2025, does it have to be the full amount?
Thank you.
Les
Answer:
Hi Les,
Your wife can split the 2025 RMD between 2025 and 2026, as long as the total RMD is taken by April 1, 2026.
Question:
I am turning age 73 in 2025. I am still working, so I know I don’t need to start taking RMDs on my 401(k) because my plan has the still-working provision. All of my IRAs have been converted to Roth IRAs. I do a backdoor Roth each year on January 1. My question is: Do I need to take an RMD on the $8,000 contribution before I convert it to a Roth IRA?
Clinton
Answer:
Hi Clinton,
No, an RMD does not need to be taken. The reason is that lifetime RMDs are only required for traditional IRAs – not Roth IRAs. So, the RMD is based on the prior-year 12/31 account balance of your traditional IRAs divided by your life expectancy under the IRS Uniform Lifetime Table. If all of your traditional IRAs have been converted, then, for RMD purposes, you will have a zero account balance as of 12/31 of the prior year.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/deferral-of-first-rmd-and-rmds-for-roth-iras-todays-slott-report-mailbag/

5 Dos and Don’ts When Lending Money to Loved Ones
Helping friends or family shouldn’t mean hurting your finances
Let’s face it: Money is tight for many people. And if you have loved ones in your life who are struggling financially, you may feel inclined to help them.
If you do, proceed with caution. According to a 2022 CreditCards.com survey, 42 percent of people who lent money did not get repaid, and about half of Baby Boomers and Gen Xers said they got burned in such transactions.
“One of the most common mistakes people make when lending money to family and friends is expecting to get it back,” says Nate Towers, director at Five Pathways Financial, a retirement planning firm in Phoenix. “If you’re going to lend money, you should assume that you might not be repaid. If you’re OK with that, then go ahead, but if not, you need to take steps to protect both parties involved.”
Are you considering loaning money to a loved one? Heed these dos and don’ts to protect yourself.
Do understand how it could impact your relationship
Before you choose to loan money to a friend or family member, think about the potential repercussions it could have on your relationship with them. According to the CreditCards.com survey, more than a quarter of people who lent money said it damaged their relationship with the borrower.
“Ask yourself what will happen if the loan isn’t repaid,” says Matthew Argyle, a certified financial planner and principal at Encore Retirement Planning in South Jordan, Utah. “Can you sacrifice the funds without sacrificing the relationship? If they fail to repay, will you sue them? Will conflict and resentment ruin the relationship?” Bottom line: weigh the risks before opening up your wallet to a close friend or relative.
Don’t lend money you don’t have
You should also be careful how much cash you loan someone. While it might be nice to help your loved one cover the entire cost of whatever expense they’re facing, limiting the loan to what you can reasonably afford is important.
“This is one of those situations where you need to ask yourself, ‘If I don’t get paid back, will I be OK?’ ” Towers says. “Be honest with your answer. If you lost 100 percent of what you’re lending right now, could you handle it? Would it affect your financial stability in the long run?”
Moreover, you shouldn’t tap into your emergency fund to loan money; reserve those funds for a rainy day of your own. And if you decide to use some of your retirement savings to help out a loved one, make sure it won’t throw your long-term plans off track.
“You should always prioritize your own financial security before lending to family, no matter how much you want to help,” Towers says. “If lending will jeopardize your retirement, it’s simply not worth the risk. Think of it like being on an airplane: They always tell you to put your oxygen mask on first before helping others. It’s sound advice in this situation.”
Another thing to consider: If you have to pay any penalties for the funds you loan out — early withdrawal fees on a certificate of deposit (CD) or individual retirement account (IRA), for example — consider factoring those costs into the loan amount.
Do get it in writing
Before you give a loved one money, get the terms and conditions of the loan down on paper. While you might trust the person to keep their word, having an agreement in writing can ensure there’s a legal obligation to do so.
You could have an attorney craft a loan agreement, or create one using an online legal resource such as LawDepot, Nolo or Rocket Lawyer. A promissory note — a document in which the borrower promises to repay the other party a specified amount of money — will often suffice in these situations, Argyle says.
The contract “should include key details, like whether you’ll charge interest, the repayment schedule, due dates and any consequences if the loan isn’t repaid,” Towers says. “You might even consider having another family member sign as a witness. For an added layer of legitimacy, you can also have the contract notarized at your local bank.”
A signed agreement reduces the potential for disputes and “preserves goodwill,” Argyle says. It’s also important tax-wise if the borrower fails to repay the loan.
“If you aren’t repaid, you may be able to claim a bad debt deduction, but only if you can prove the loan was legitimate,” Towers says. The loan contract provides this evidence.
Don’t forget about the IRS
When planning your loan, make sure you take into account the potential tax implications. These will depend on where you source the money, financial and legal professionals say. “If you have to pull it from your IRA, you are incurring [income] taxes to get the money,” says Pat Simasko, an elder law and estate planning attorney at Simasko Law Offices in Mount Clemens, Michigan. (This is only true for traditional IRAs, withdrawals from which are taxable; with Roth IRAs, you pay income taxes on these before putting money in the account.)
Generally, money you withdraw from a 401(k) is also taxed at your ordinary income tax rate (unless you’re using a 401(k) loan). And “if you are selling stock, there might be capital gains taxes,” Simasko says. “It all adds up and should be included in the amount they have to repay you.”
If you loan out more than $10,000, you’ll need to charge interest on the loan, too, Argyle says. The IRS sets the applicable interest rates monthly. “That interest counts as taxable income, and you’ll need to report it on your tax return,” Towers says. “Depending on the size of the loan, this could push you into a higher tax bracket.”
Do consider consulting experts
Ultimately, the best way to protect yourself is to consult an attorney when setting up your loan. You could get guidance from a tax adviser and a retirement planner as well.
“Obtaining professional advice on the front end helps address any potential violations of the law,” says Troy A. Young, a certified financial planner and founder of Destiny Financial Group in Atlanta. “It is always easier to prepare than it is to repair.”
Can’t lend money? Offer other ways to help
If you determine you’re not in a position to loan a loved one money or the relationship just isn’t worth the risk, you may need to politely decline.
“You can soften the message by offering emotional support like, ‘I wish I could help, but I’m not able to lend you money right now. If there’s anything else I can do to support you, let me know,’ ” Argyle says. “You can also redirect them with a line like, ‘I’m not in a position to lend money, but I can help you look into other options.’ ” If your finances are tight, offering to help with childcare, for example, could be a way to provide meaningful assistance and help your loved one save money.
In some cases, you might consider cosigning a loan with your loved one if it would help them qualify for one. But be careful: If they fail to make payments, you would need to step in and take over. For this reason, make sure “you can shoulder the full payment without hardship” before co-signing, Argyle says.
https://www.aarp.org/money/personal-finance/lending-money-to-loved-ones/
Higher IRA Federal Bankruptcy IRA Protection Limit Became Effective on April 1
By Ian Berger, JD
IRA Analyst
When you file for bankruptcy, one thing you usually don’t have to worry about is protecting your IRA funds from your bankruptcy creditors.
That’s because, in just about every case, all of your IRA (and Roth IRA) monies are off limits. Under the federal bankruptcy law, IRA assets up to a certain dollar limit cannot be reached by creditors. That dollar limit is indexed every three years based on the cost-of-living. On April 1, the dollar limit increased from $1,512,350 to $1,711,975, effective through March 31, 2028.
That limit is especially generous because it doesn’t take into account rollovers from employer plans like 401(k) or SEP and SIMPLE IRA plans. (Those rolled-over dollars are always fully protected.) So, only IRA contributions themselves, and earnings on those contributions, are taken into account. Since IRAs did not become available until 1975, it would be a rare case for someone to have amassed over $1.7 million from IRA contributions and earnings alone.
Of course, the $5 billion Roth IRA owned by Peter Thiel, a cofounder of PayPal, is a notorious exception to that rule. If you’re also an IRA owner lucky enough to have contributory IRAs and earnings worth more than the federal dollar limit, you may have two other ways to shield your entire IRA portfolio in bankruptcy.
First, you may live in a state that has its own state bankruptcy law protecting all of your IRA funds in bankruptcy – no matter how large (in other words, without the $1.7 cap).
You may also have protection if you live in certain states with an anti-garnishment law. That’s a law that says your IRAs can’t be reached to pay off a non-bankruptcy legal judgment (for example, when you must pay lawsuit damages). In the 2022 case of Hoffman v. Signature Bank of Georgia, No. 20-12823 (11th Cir. 2022), January 24, 2022, a Georgia resident filed for bankruptcy. Georgia is a state that completely protects IRAs from garnishment. The Eleventh Circuit Court of Appeals ruled that the existence of the Georgia anti-garnishment law, a non-bankruptcy law, fully protects a resident’s IRA dollars in bankruptcy. (Don’t ask me to explain; it’s complicated.) That would be the case even if the IRA assets exceed the $1.7 million cap.
A couple of points about the Hoffman decision: First, it technically only affects you if you live in the Eleventh Circuit – Alabama, Florida and Georgia. Second, it would never apply if you live in a state that doesn’t have an anti-garnishment law like Georgia’s law.
But, remember, even if your state doesn’t have its own laws to protect your IRAs, you can always rely on the federal protection up to $1,711,975. For most people, that should be more than enough.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/higher-ira-federal-bankruptcy-ira-protection-limit-became-effective-on-april-1/
Make Your 2024 IRA Contribution by April 15
By Sarah Brenner, JD
Director of Retirement Education
There is still time! You can still make a prior-year (2024) IRA or Roth IRA contribution up to the tax filing due date, April 15, 2025. For most people, there is no extension beyond that date, regardless of whether a tax return extension is filed.
While April 15 is the deadline to contribute to an IRA for most individuals for the prior year, if you live in a federally declared disaster area you may be given additional time by the IRS to complete certain tax-related acts, such as making an IRA contribution. This year, those taxpayers impacted by the California wildfires have until October 15, 2025, to make a 2024 prior-year IRA contribution. An up-to-date list of disaster victims entitled to tax relief can be found on the IRS’s website: irs.gov/newsroom/tax-relief-in-disaster-situations.
Contribution Limit
The maximum contribution is $7,000. However, if you are age 50 or older by December 31, 2024, you can contribute an additional $1,000. This total amount is applied in aggregate across all of your traditional and Roth IRAs. Note that IRA contributions have no bearing on how much you can contribute to a workplace plan such as a SEP IRA, SIMPLE IRA or a 401(k).
Compensation
IRA and Roth IRA contributions are only permitted when you have compensation. Typically, whether or not a person has “compensation” is a relatively straightforward determination. For most individuals, compensation comes from employment, either as an employee or from self-employment income. Confirmation of “compensation” can be found in Box 1 of your W-2 form. Any amount listed here (minus any amount listed in box 11) qualifies as “compensation.”
As is often the case with IRAs, special rules exist for spouses when it comes to compensation. A spouse with little or no compensation can make an IRA contribution based on the other spouse’s compensation. If the higher-compensated spouse had enough eligible income, both spouses can make the maximum IRA contribution. Note that you must file a joint tax return for the year to qualify for a spousal contribution.
Deductibility
A traditional IRA contribution is not always deductible. (Roth IRA contributions are never deductible.) One factor for determining IRA deductibility is if you are an “active participant” (i.e., “covered”) in a retirement plan at work. This can be confirmed by checking Box 13 on your W-2. If neither you or your spouse have a retirement plan through an employer, then neither of you is an “active participant” and you each can deduct a traditional IRA contribution. It does not matter what your income is. Single filers not participating in an employer plan also qualify for a deductible IRA contribution without regard to their income.
If you are an active participant in an employer plan, you must consider the phase-out ranges for traditional IRA deductibility. As mentioned, while you can always make a traditional IRA contribution, you may not be able to deduct it. For 2024 IRA contributions, the income phase-out ranges for deductibility were $123,000 – $143,000 of modified adjusted gross income (MAGI) for those married/filing joint, and $77,000 – $87,000 for single filers. (In 2025, those numbers move to $126,000 – $146,000 and $79,000 – $89,000, respectively.)
There is another IRA deductibility phase-out range when one spouse participates in an employer plan and the other spouse does not. The participating spouse uses the married/filing joint phase-out ranges just listed. The non-participating spouse is permitted a higher phase-out range of $230,000 – $240,000 for 2024 ($236,000 – $246,000 for 2025).
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/make-your-2024-ira-contribution-by-april-15/

Weekly Market Commentary
It’s been a difficult month for investors, and sentiment indicators tell that story. Wall Street appeared poised to build on the prior week’s gains, but regressed again as mixed signals on tariffs and a loss of sentiment gave reason to sell. Early in the week, rhetoric on a more targeted approach to tariffs was met with optimism. However, a 25% levy on all imported autos, scheduled to take effect on April 3rd, rattled the auto sector and contradicted early thoughts that the auto sector would avoid blanket tariffs. Trump’s “Liberation” Day is also set for April 2nd, at which time it is widely expected that the administration will impose reciprocal tariffs on all nations. Inflation fears related to tariffs were top of mind in the sentiment data released this week, and concerns regarding future employment were also conveyed in the surveys. These concerns may lead to a pullback in discretionary spending, which will, in turn, ultimately affect corporate earnings. More curbs on technology exports hurt the Semiconductor and Information Technology sectors. Disappointing news from KB Homes and Lennar also cast a shadow on the home builders.




11 Mistakes Retirees Make at the Supermarket
It’s not just inflation. Your bad habits may explain why you’re paying too much for groceries.
Retirees living on fixed incomes have been feeling the pinch of rising grocery costs.
Grocery prices in February rose 2.6 percent year-over-year, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index. For some items, such as eggs, price hikes have been much steeper.
But don’t blame a big grocery bill entirely on inflation (or bird flu, in the case of egg prices). Your shopping habits could be a contributing factor.
“There are many ways retirees can reduce their grocery costs and help avoid overspending,” says Laura Adams, author of Money Girl’s Smart Moves to Grow Rich and an analyst at financial products and services comparison website Finder.com.
1. Missing out on senior discounts
A number of grocery stores across the country offer discounts to people over a specific age, typically worth 5 percent to 10 percent off your grocery bill (select items may be exempted).
Senior discounts are generally offered on a specific day of the week. Some big chains, such as Giant and Safeway, don’t offer them at every location, but their individual stores may, so it’s best to check with your local store.
2. Shopping without a plan
Create a meal plan for the week before you head to the grocery store to ensure you only buy what you need and avoid food waste. When crafting your weekly menu, look for recipes with overlapping ingredients so you can use everything you buy in its entirety.
“You can take this one step further by reviewing local store ads to see what’s on sale then picking recipes that use these discounted foods to save more,” says Andrea Woroch, a money consultant.
Also, check your refrigerator, freezer and pantry before you shop. “When making the meal plan for the week, it’s important to take inventory of what you already have on hand and build out your recipes and shopping list from there,” says Jill Sirianni, co-host of the Frugal Friends podcast and co-author of Buy What You Love Without Going Broke.
3. Buying out-of-season produce
You typically can buy your favorite fresh fruits and vegetables regardless of whether they’re in season, but it’s often not cost-effective. “In-season fruit and veggies are always less expensive and should be incorporated into your meal plan and shopping list week to week,” Sirianni says. If you’re not sure what’s in season in your area, check the website Seasonal Food Guide.
4. Overlooking frozen fruits and vegetables
You don’t have to bypass out-of-season fruit and vegetables entirely. In fact, you can save money on most produce purchases without compromising freshness by shopping in the frozen foods section.
“Because produce is frozen at peak ripeness, you are still getting all the nutritional content but for less money and stored in a way that reduces the chances of the food spoiling too soon,” Sirianni says.
Stocking up on frozen produce can also help you eat your recommended daily vegetable intake (2-3 cups), which only 12.5 percent of adults 51 or older reach, according to the Centers for Disease Control and Prevention.
5. Overbuying foods in bulk
Buying in bulk might have made sense when you had a house full of kids. But it could be a source of overspending if you’re now an empty nester and can’t consume a 3-pound barrel of pretzels before they go stale.
“This is especially true for fresh food, but even oversized bags of frozen fruit, veggies and other foods can go bad over time in the freezer thanks to freezer burn,” Woroch says.
6. Sticking to the center aisles
The center aisles of the supermarket are filled with often-pricey packaged goods, whereas the perimeter of the store is typically where you’ll find meat, fish, dairy and produce, Sirianni says.
“Not only is it more beneficial to our diets for these categories to make up the majority of our meals, but it’s also beneficial to our wallets,” she says. “When you’re buying a lot from the center aisles, you are paying more for convenience and packaging.”
7. Buying nonfood items at the supermarket
Purchasing household and personal items at the grocery store can be convenient but costly. “If you’re not shopping separately for nonperishable items like soaps and paper products you can buy in bulk at a discount, you’re likely overpaying for them,” Adams says.
You can also save money by signing up for subscriptions for certain items. For example, Amazon offers discounts on recurring purchases of many household items through its Subscribe & Save option; when you set up auto-delivery for five or more items, you can save an additional 15 percent. In addition, Chewy.com offers discounts if you set up auto-shipment for certain dog foods.
8. Not using grocery store apps
“Overlooking store apps could mean overpaying,” Woroch says. By signing up for your store’s loyalty program and using its mobile app, it’s easy to see what’s on sale before you shop and clip digital coupons that can be applied automatically when you scan your loyalty card or enter your phone number at checkout.
Some apps, such as the Target Circle app, even have a barcode scanner that lets you scan items as you shop to see if there are any deals available for them, Woroch says.
9. Being too loyal to major brands
Over the years, you may have developed an attachment to certain food brands, but that loyalty comes with a cost.
“Store brands have come a long way over the last decade, offering higher quality ingredients and even healthier options such as gluten-free and organic,” Woroch says. “It’s worth exploring and testing new options that can save you 30 to 50 percent on grocery items.” If you’re not happy with the product, your grocery store might refund the purchase, she says.
Sticking to just one grocery store also could be costing you. Other supermarkets might have lower prices or better deals on items you regularly buy. Woroch recommends using the Flipp app to see local grocery store circulars and compare prices without having to drive from store to store.
10. Using the wrong credit card
Using a rewards credit card to make grocery purchases can pay off — if you use the right card.
“If you’re not using a credit card to maximize rewards based on where you shop, that’s costing you,” Adams says. “For instance, warehouse stores typically offer branded cards with discounts, rewards and extra benefits. Or you can use a rewards card that pays competitive cash back for grocery purchases.”
If you have a cash-back credit card, review the reward terms to make sure you’re aligning your cash back with your shopping habits. You can compare credit cards at sites such as Nerdwallet, Bankrate or WalletHub to find one that offers the most cash back for groceries and items you regularly purchase.
“Just keep in mind that if you don’t pay monthly card balances in full, you can accrue interest that offsets a card’s net financial benefits,” Adams warns.
11. Throwing away receipts
Don’t toss your grocery receipts without checking them for deals first. “Some receipts may offer coupons to local businesses or even coupons for money off future grocery purchases,” Woroch says. “I recently got a deal from Sprouts for $10 off $75.” She recommends wrapping the receipt around your credit card so you don’t forget to use it the next time you shop.
Woroch also advises using the Fetch app to take photos of receipts and earn points that can be redeemed for gift cards for a variety of retailers and restaurants “so you can enjoy a meal out without derailing your limited retirement budget.” Other mobile apps that let you earn cash back for scanning receipts include Ibotta, CoinOut and Receipt Hog.
https://www.aarp.org/money/personal-finance/overspending-on-groceries/
Qualified Charitable Distributions and inherited IRAs: TOday’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
Question:
In the article “Why You Should Take Your 2025 RMD Now,” the following caught my eye …
“Or, maybe you are charitably inclined and looking to satisfy your RMD by doing a qualified charitable distribution (QCD). This will require the custodian to send funds directly to charity and the charity must cash the check.”
I wonder if you can clarify what the phrase, “send funds directly to charity” means? The reason I ask is because doing a QCD on my IRA custodian’s web site produces a check payable to:
Name of the charity
FBO my name
My address
The custodian mails the check to me, and I need to mail it to the charity. The IRA custodian apparently thinks that qualifies as “directly to the charity.” I’m not sure. What do you think?
Sincerely,
– Jim
Answer:
Hi Jim,
That will work! Sending a check to you will still qualify as a QCD, as long as the check is made payable to the charity and not to you personally. Just be sure that you deliver it to the charity, so it can be processed by them before the December 31 QCD deadline to avoid tax issues.
Question:
I have a question about an inherited Roth IRA. If a person inherits a Roth IRA in 2023, do they have to take required minimum distributions (RMDs) during the 10-year payout period? My spouse’s mother died in 2023 at the age of 95. In 2024 my spouse decided to take an RMD because it was unclear if he needed to. We would prefer to allow the money to compound as long as possible, before taking any distributions.
Thanks,
Mitch
Answer:
Hi Mitch,
Good news! RMDs are not required during the ten-year period for Roth IRA beneficiaries using the 10-year rule. Your spouse does not need to take any distributions from the Roth IRA he inherited from his mother until the end of 2033. He can let the tax-free earnings continue to accumulate in the inherited account until then.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/qualified-charitable-distributions-and-inherited-iras-todays-slott-report-mailbag-2/
10% Penalty Exceptions: IRAs and Plans
By Andy Ives, CFP®, AIF®
IRA Analyst
If a person under age 59½ takes a withdrawal from his IRA or workplace plan, there is a 10% early withdrawal penalty…unless an exception applies. There are currently 20 exceptions, with a 21st on the way. Here are those exceptions, with some brief commentary.
Exceptions Applicable to BOTH Plans and IRAs (Note: Check to make sure your plan allows in-service withdrawals for any plan-specific exceptions.):
- Death. Withdrawals from inherited accounts are always penalty free.
- Disability. High hurdle. Being “retired on disability” may not qualify.
- 72(t). The program must run for 5 years or until age 59½, whichever is longer. Tread carefully with this exception!
- Medical Expenses (Over 7.5% Adjusted Gross Income). You will need to do some math with this one.
- IRS Levy. If the IRS takes your money, there is no 10% penalty. Awesome.
- Active Reservists. A function of active duty and when the distribution is taken.
- Birth or Adoption. Up to $5,000 per child. Must be the parent of that child to qualify. (Aunts and uncles of the new family member cannot leverage this exception.)
- Terminal Illness. Death is reasonably expected within 7 years. No limit on the amount.
- Federally Declared Disasters. Capped at $22,000. The IRS provides a list of current disaster areas here: Tax relief in disaster situations | Internal Revenue Service.
- Domestic Abuse. An unfortunate reason for the need of a spouse or domestic partner to access retirement funds, up to the lesser of $10,000 or 50% of account
- Emergency Expenses. $1,000 cap, but it might get a person to their next paycheck.
Exceptions Applicable to IRAs Only (Including SEPs and SIMPLEs):
- Higher Education Expenses. Available to the IRA owner and certain family members.
- First Time Homebuyer. Lifetime cap of only $10,000.
- Health Insurance If You Are Unemployed. Pretty straightforward.
Exceptions Applicable to Plans Only (Not Including SEPs or SIMPLEs):
- Age 55. You must separate from service in the year you turn age 55 or older.
- Age 50 or 25 Years of Service for Public Safety Employees. Same as above, except the earlier of age 50 or 25 years of service, and only applicable to certain groups of workers.
- Section 457(b) (Governmental) Plans. Withdrawals are always penalty-free from these plans.
- Divorce (QDRO “Qualified Domestic Relations Order”). A QDRO allows the receiving ex-spouse to have penalty-free access to the funds while they are in the plan.
- Phased Retirement Distributions from Federal Plans. Very complex. Allows full-time employees to work part-time schedules while beginning to draw retirement benefits.
- Pension-Linked Savings Accounts. Limited to $2,500. This is an optional add-on feature for plans like a 401(k).
Exception #21, effective December 29, 2025, is for plans only and applies to premium payments for certain long-term care policies. But we will cross that bridge when we get to it.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
12 Super Catch-Up Contribution Questions Answered
By Ian Berger, JD
IRA Analyst
We continue to get lots of questions about the new “super catch-up” contribution for retirement plan and SIMPLE IRA participants who are ages 60-63. Here are answers to your top 12 questions:
1. When does the super catch-up contribution rule become effective?
It became effective for the 2025 calendar year.
2. Is the super catch-up only available for 2025?
No, it will continue for years after 2025.
3. To which plans does it apply?
The super catch-up applies to 401(k), 403(b) and governmental 457(b) plans. It also applies to SIMPLE IRA plans. However, it does not apply to traditional or Roth IRAs.
4. Are those plans required to offer it?
No, the super catch-up is optional for plans to offer.
5. Who is eligible for the super catch-up?
Participants in covered plans who turn age 60, 61, 62 or 63 during the year are eligible for that year.
6. If I turn age 60 during the year, can I contribute the full super catch-up?
Yes, the limit is not pro-rated in the year you turn age 60. So, for example, if you turn age 60 on July 1, 2025, and your plan offers the super catch-up, you can contribute up to the full limit for 2025 – not just ½ of the full limit.
7. If I turn age 64 during the year, am I eligible for the period when I was age 63?
No, you are not eligible. That’s the case even if you don’t turn age 64 until December 31.
8. Why ages 60, 61, 62 and 63?
That’s one question we can’t answer. No one seems to know why Congress settled on those ages.
9. Is the super catch-up in addition to, or instead of, the “regular catch-up” for ages 50 and older?
It’s instead of the age-50 catch-up.
10. What is the 2025 super catch-up limit?
For 401(k), 403(b) and governmental 457(b) plans, the 2025 limit is $11,250. That figure results from multiplying $7,500 (the 2024 regular catch-up limit) by 150%. So, an age 60-63 employee in a plan that allows catch-ups can defer up to a total of $34,750 ($23,500 + $11,250) for 2025.
11. What about SIMPLE IRAs?
You’ll be sorry you asked. The super catch-up contribution is available for SIMPLE IRA employees. The 2025 limit is $5,250. SIMPLE IRA participants age 50 or older (but not ages 60, 61, 62 or 63) are also eligible for the “regular” catch-up. That catch-up is either $3,850 or $3,500 for 2025. It’s $3,850 for plans with 25 fewer employees or plans with more than 25 employees where the company has agreed to make a larger-than-normal employer contribution. (That’s because of a 10% bump-up to the SIMPLE IRA contributions that became effective in 2024.) The 2025 age 50-or-older catch-up is $3,500 for larger plans where the employer hasn’t agreed to make the higher contribution. So, for 2025, there are three SIMPLE IRA catch-up contribution limits.
12. Why are the SIMPLE IRA catch-up rules so un-SIMPLE?
Ask your congressperson.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/12-super-catch-up-contribution-questions-answered/

Weekly Market Commentary
-Darren Leavitt, CFA
The S&P 500 avoided a fifth straight week of losses as investors continued to assess the impact of Trump’s policies. A late rally on Friday afternoon, fueled on heavy volume from quarterly options’ expiration, helped propel the S&P 500 higher and avoid another weekly loss. As expected, the Federal Reserve kept its monetary policy unchanged at 4.25%-4.50% but at the same time announced that it would reduce the amount of assets running off its balance sheet from $25 billion to $5 billion, a form of quantitative easing. Fed Chairman Powell endorsed the idea that tariffs could have a “transitory” effect on inflation and acknowledged that inflation continues to be elevated and that it was likely that economic growth would slow. However, the Chairman remained constructive on the US economy, which helped to send markets higher after his post-meeting Q&A. The Summary of Economic Projections showed that the committee had reduced its forecast on 2025 GDP growth to 1.7% from 2.1% and increased its Core PCE forecast to 2.8% from 2.5%. The Committee also forecasts the Fed Funds rate to be 3.9% by the end of 2025, translating to two twenty-five basis point cuts this year.
President Trump’s call with Russian President Putin appeared to yield a framework for a ceasefire centered on energy and infrastructure while opening the door to a maritime ceasefire in the Black Sea. Further technical negotiations are scheduled in the coming weeks, but the timeline remains vague.
NVidia’s GTC event showcased its newest chip and applications in AI and robotics, but the developers’ conference received a sell-the-news response on Wall Street. FedEx earnings results were disappointing, as were earnings from Nike, Lennar Homes, and Micron Technology.
The S&P 500 gained 0.5%, the Dow rose by 1.2%, the NASDAQ added 0.2%, and the Russell 2000 increased by 0.6%. US Treasuries rallied across the curve but favored the front end and the belly. The 2-year yield fell by seven basis points to 3.95%, while the 10-year yield fell by six basis points to 4.25%. Oil prices increased by $1.07 or 1.6%, closing at $68.27 a barrel. Gold prices rose by $21.10 to close at $3,022.10 an Oz. Copper prices continued to trade higher, adding $0.21 to close at $5.11 per Lb. Bitcoin prices increased by ~$1,800, closing at $84,390 on Friday. The US Dollar index added 0.3% to 104.6.
Economic data for the week was mixed. Retail sales increased by 0.2%, less than the estimated increase of 0.7%. The Ex-auto print was up 0.3% versus the consensus estimate of 0.4%. The control group figure came in up 1%, which was materially better than the 1% decline in January and gave investors solace that the consumer is still spending, albeit at a more measured pace. Housing data for the week was better than expected, with Housing Starts and Permits coming in above estimates. Existing Home sales also topped estimates at 4.26M versus 3.95M. Industrial production came in at 0.7%, above the estimated 0.2%, while capacity utilization rose to 78.2% compared to the estimated 77.7%. Initial Claims increased by 2k to 223K, while Continuing Claims jumped by 33k to 1.892M.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

Retire with confidence: Master your finances and lifestyle
Discover steps to help you prepare for retirement
Imagine this: After decades of hard work and dedication, you’re just 12 months away from the retirement of your dreams. Exciting, right? But hold on, this final stretch is crucial. Let’s make sure you’re fully prepared to enjoy a rewarding and stress-free retirement.
The last thing you want is to approach this pivotal moment without a solid plan. Here’s why taking this one-year runway seriously can set the stage for a fulfilling and secure retirement.
The importance of strategic retirement planning
Navigating retirement without a solid plan can turn this exciting new phase into a source of stress and financial uncertainty. The lack of preparation might even lead to rejoining the workforce. However, by taking proactive steps, you can ensure your retirement is as enjoyable and secure as you’ve always envisioned.
Practical steps to prepare for retirement
1. Assess your financial resources
Evaluate your current financial situation. Start by calculating your net worth by listing all your assets and liabilities. Then, evaluate future income streams like Social Security, pensions and investment withdrawals. This provides an understanding of your financial resources, allowing you to plan based on real numbers rather than assumptions.
2. Define clear retirement goals
Envision your retirement lifestyle. Do you see yourself in a fun part-time job? Traveling the world? Pursuing new hobbies? Perhaps relocating? By clarifying what you want, you can better estimate your annual expenses and set a realistic budget. This reflection not only helps you plan financially but also ensures that your spending aligns with your personal values and goals.
3. Redesign your investment portfolio
Check regularly on how your investments are doing. Take a good look at your portfolio’s asset allocation and investment choices. But remember, a one-time review isn’t enough. Set up a regular process to monitor and adjust your investments. This proactive approach helps ensure your assets properly address market ups and downs and inflation in order to meet your financial needs.
4. Create a comprehensive health care plan
Your health care plan should be robust enough to cover both regular check-ups and unexpected medical situations. Health care is a significant concern in retirement, often accounting for a large portion of expenses. Start by exploring your health insurance options, including Medicare and any supplemental plans. Additionally, consider long-term care insurance to cover potential future needs.
5. Reduce and manage debt
Enter retirement with minimal debt to provide a comforting sense of financial freedom. Aim to pay off high-interest debts like credit cards and car loans first. Tackling debt while you still have a steady paycheck makes the process easier and can significantly free up your monthly budget, paving the way for more enjoyable retirement activities.
6. Update legal and financial documents
Make sure all your legal and financial documents are up to date and organized. This includes wills, trusts and beneficiary designations on retirement accounts and insurance policies. Consider services such as Trustworthy.com to manage and store these documents securely. Having clear, accessible documents reduces stress for both you and your family, ensuring your wishes are honored.
Complement your legal will with a practical and thoughtful step by documenting your final wishes that make your intentions clear. That will help to ease the burden on your loved ones and preventing unanswered questions during their time of grief.
7. Establish an income strategy
There are several key considerations in planning your retirement income strategy. One key decision is when to take Social Security and pension benefits. The right timing can greatly influence your overall income. Equally important is developing a withdrawal plan for your investment portfolio, which includes determining a safe annual withdrawal rate and identifying which accounts to draw from to minimize tax impacts. By thoughtfully addressing these income sources, you can enhance the longevity of your retirement savings.
8. Understand tax implications
Strategically navigate the tax code to significantly increase the portion of your retirement income that stays in your pocket. Engaging the advice of a tax professional can be invaluable in this process. Smart tax planning involves choosing the right accounts to draw from, utilizing available deductions, avoiding traps that unintentionally prohibit you from receiving certain tax benefit, and coordinating withdrawals to minimize your tax burden.
Emotional and lifestyle considerations
While financial planning is essential, don’t overlook the emotional and lifestyle aspects of retirement. Transitioning from a structured work life to retirement can be challenging. Here are a few tips to ease this transition:
- Engage in hobbies and learning: Jump into hobbies you love and explore classes or workshops to discover new interests. This not only keeps you engaged with exciting activities but also boosts your skills and knowledge, keeping your mind sharp.
- Cultivate social connections: Strengthen and expand your social network by joining clubs or groups that match your interests. This helps prevent feelings of isolation and fosters meaningful relationships, essential for emotional well-being.
- Volunteer, stay active and consider part-time work: Find fulfillment by volunteering for causes you care about and/or consider part-time work in a job you enjoy. This can provide a sense of purpose and social interaction. Additionally, keep active with exercise that interests you, such as walking, swimming, golf or pickleball. Lots of options!
- Travel and explore: Embrace travel opportunities to enrich your retirement with new experiences. Whether exploring locally or venturing internationally, travel can broaden your horizons and add a sense of adventure and excitement to your life. You might even explore the world virtually, experiencing dream destinations without the physical and financial strain, thanks to immersive AI-enhanced virtual reality technology.
Final thoughts
As you countdown to retirement, taking the time to plan thoroughly can lead to a more rewarding and stress-free experience. The key is not to wing it but rather approach this phase with the same diligence and foresight you’ve applied throughout your career.
By following these strategies, you can enter retirement with confidence, ready to embrace the adventures and possibilities that lie ahead.
https://www.voya.com/blog/retire-confidence-master-your-finances-lifestyle
Bankruptcy Protection and Inherited IRAs: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
I cannot find the indexed number for IRA bankruptcy protection for 2025-2028. It is $1,512,350 currently, but it is scheduled to increase on April 1, 2025. Do you know what it will be?
Mike
ANSWER:
The updated IRA bankruptcy protection number is $1,711,975, effective April 1, 2025. As you mentioned, this level of bankruptcy protection for IRAs will be in effect for the next three years. Note that the $1,711,975 does NOT include former plan dollars rolled into the IRA – like from a 401(k). Former plan dollars remain 100% protected from bankruptcy within the IRA and do not eat into the $1,711,975 cap.
QUESTION:
I inherited my brother’s Roth IRA in 2018 and take required minimum distributions (RMDs).
Under the SECURE Act, does the beneficiary I name on this account continue taking RMDs based on my schedule? If so, do they do so for 10 years and then empty the account in year 10?
Or, do they not have to take any distributions until year 10?
Thank you.
Donna
ANSWER:
Donna,
The beneficiary of your inherited Roth IRA is a successor beneficiary. Since you are already taking RMDs, those annual payments cannot be stopped by the successor. The IRS rules dictate that the successor will “step into your shoes” and continue with your exact same RMD schedule, using your same single life expectancy factor, minus one each year. Additionally, the successor beneficiary must also abide by the added layer of the 10-year rule. So, RMDs must continue in years 1 – 9 for the successor, and the account must be emptied by the end of year 10.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/bankruptcy-protection-and-inherited-iras-todays-slott-report-mailbag/
Surprise! You May Still Be Eligible for the Stretch IRA
By Sarah Brenner, JD
Director of Retirement Education
The arrival of the SECURE Act means the end of the stretch IRA for many beneficiaries. Instead, a 10-year payout rule applies for most IRAs inherited by non-spouse beneficiaries. However, the SECURE Act does allow the stretch to continue for certain select groups of beneficiaries. These beneficiaries are called “eligible designated beneficiaries” (EDBs). EDBs include spouse beneficiaries, minor children of the account owner, as well as disabled and chronically ill individuals.
Not More Than 10-Years Younger
Beyond the above listed groups of EDBs, there is another group of EDBs that may surprise you. This group is often overlooked, and many people are unaware of just how common it can be. A beneficiary who is not more than 10 years younger than the deceased IRA owner (based on their actual birthdates) also qualifies as an EDB. Under this definition, any beneficiary older the account owner would also be an EBD. This group of beneficiaries can include an unexpectedly large number of people. For example, siblings, friends, and unmarried partners, who are often named as beneficiaries, are all frequently close in age.
Example: Eli, age 65, dies in 2025. He has two IRAs. The beneficiary of one IRA is his older brother, Ben, age 77, and the beneficiary of the other IRA is his good friend, Thomas, age 60. Both Ben and Thomas qualify as EDBs because they were not more than 10 years younger than Eli. Therefore, they can both use the stretch IRA. They can take distributions from the IRAs they inherited from Ben using their single life expectancy. They are not required to use the 10-year rule.
Are You An EDB?
If you have inherited an IRA, you should not assume that the 10-year rule applies, even if you are a non-spouse beneficiary. Are you older than the IRA owner was? Or, were you close in age? That can make you an EDB, which changes your options for inherited IRA funds. If you are not more than 10 years younger than the account owner was, you are part of a surprisingly large group of beneficiaries who are still eligible for the stretch, even after the SECURE Act.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/surprise-you-may-still-be-eligible-for-the-stretch-ira/
IRA Trivia: Missed RMD or Excess Contribution?
By Andy Ives, CFP®, AIF®
IRA Analyst
Here is an all-too-common situation that seems counterintuitive: A participant in a 401(k) retires and must take his required minimum distribution (RMD). This person requests that his entire 401(k) plan balance be directly rolled over to an IRA. The plan follows the participant’s direction, and the entire amount is sent to the IRA.
PROBLEM: No RMD is distributed from the plan prior to the movement of money to the IRA.
QUESTION: Do we have a missed RMD situation?
ANSWER: We do NOT…but all is not well.
The RMD from the plan must be taken prior to the rollover to the IRA. RMDs are not eligible to be rolled over, so it should have been distributed. Oftentimes people think they can roll a 401(k) RMD to their IRA and simply take that plan RMD from the IRA later in the year. Incorrect. This is not permitted.
So, if an RMD cannot be rolled over, then how do we NOT have a missed RMD in the scenario outlined above?
Technically, a direct rollover from a plan to an IRA is just that: a rollover. It is NOT a direct transfer like we see with IRA-to-IRA transactions. Direct transfers between IRAs do not generate any tax reporting. There is no 1099-R or Form 5498 with direct transfers. As such, RMDs can be directly transferred from IRA to IRA. But they cannot be ROLLED over from IRA to IRA.
Plan balances, like in a 401(k), cannot be directly “transferred” to an IRA. The movement of money from plan to IRA is a direct rollover, and rollovers generate tax forms. A 1099-R reports the distribution from the plan, and a 5498 shows the offsetting rollover/redeposit into the IRA.
And therein lies the sneaky answer as to why we don’t have a missed RMD in the scenario above. Technically, the plan paid out the entire balance, including the RMD. The 1099-R will report a full distribution. As such, the RMD was TECHNICALLY paid out by the plan. The problem now is not that the RMD was missed. The problem is that the RMD was rolled over. And what is the result when an RMD is rolled over? We have an excess contribution for the RMD amount in the receiving IRA.
The corrective measure here is NOT to follow the missed RMD correction process. Instead, we follow the excess contribution rules. If timely corrected by the October 15 deadline, the erroneously rolled-over RMD is removed from the IRA along with any earnings (“NIA” – net income attributable) as an excess contribution withdrawal. The earnings are taxable, but there is no penalty and no special tax forms to file. Oh…and no missed RMD.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/ira-trivia-missed-rmd-or-excess-contribution/

Weekly Market Commentary



7 Strategies for More Income in Retirement
“Old age is always fifteen years older than I am.”
—Bernard Baruch, American financier, investor, statesman and philanthropist
One of the biggest fears people have is running out of money in retirement. And for many Americans, this is a very real risk, not an irrational phobia.
If you are a reasonably healthy 65-year-old non-smoker, actuarial tables estimate you’re likely to live to age 86, as a man, and 89, as a woman. And the longer you live, the longer you can expect to live. A 90-year old non-smoker has a good chance of living to age 95, as a man, and a 97, as a woman.
However, there’s no need to worry your way through retirement in a state of self-enforced poverty and extreme frugality. Follow these strategies to have more spendable income in retirement, and never run out of money!
#1: Stay healthy and active.
According to Fidelity Investments, a couple who retired in 2017 will spend an average of $275,000 for health care costs throughout retirement. Poor health is expensive in every way imaginable, taking a heavy mental, emotional, and financial toll.
Although it’s no guarantee, good health habits can help slash medical costs:
Move more. Inactivity costs individuals, employers and the governments as much as $28 billion annually in medical costs and lost productivity, according to a study cited by The New York Times. Exercising for 30 minutes 3-5 times per week can make a measurable difference in health and vitality.
Eat from the bottom of the food pyramid. To reduce your risk of cancer and heart disease, eat more fruits and vegetables. Avoid the “SAD” Standard American Diet, which fuels disease, and learn what “Blue Zone” researchers are discovering about the world’s healthiest and longest-living people.
Quit or moderate negative habits. Eliminate bad habits such as cigarettes or over-indulging in sugar, junk food or alcohol.
Think positively. A recent Harvard study found that “optimistic women” had nearly a 40% lower chance of dying of heart disease or stroke and a 16% lower risk of dying from cancer. Multiple other studies show that optimistic people of both sexes live longer and have less heart-related illnesses.
Exercising regularly, eating well and maintaining a positive attitude will save you money and—even more importantly—help you enjoy your life!
#2: Save more.
The average American saves less than 5% of their income. Some Americans have no savings at all, or they have debt instead. Some people invest but neglect to save and have to raid their retirement accounts—paying penalties and taxes—for every emergency.
We recommended saving 20% of your income. That might sound intimidating or even impossible, but it’s not. It starts with a decision and it requires a mindset committed to living below your means.
Start saving—even if it’s 5 or 10% to start, and work your way up as you can. The key is to increase your saving—not your spending—as your income and financial capability increases.
Save more money, and you’ll have liquidity for opportunities as well as emergencies. You’ll end up with more money to invest, without compromising your savings. Saving more also makes people less compelled to subject their dollars to unreasonable risks in pursuit of unrealistic rates of return.
#3: Keep working, contributing, and earning.
According to the Social Security Administration, approximately one out of every ten people turning 65 today will live past age 95. Nearly half—43%—of retirees underestimate how long they will live by 5 or more years, reports the Society of Actuaries. And yet, Census Bureau figures show that the average age of retirement is only 63. How many people have saved enough to live another 30 or more years without earned income?
The impact of longevity and low savings rates combined with too-early retirement can be devastating. Many people are retiring without the financial capability to remain independent—one reason why we don’t recommend a traditional retirement. Work can also provide people with purpose and with their primary social interaction.
Another tremendous benefit of working longer is that you can maximize your Social Security income! Too many people take Social Security too soon and regret having a lower income.
If you don’t enjoy your work, the thought of delaying retirement may lead to despair. But when we say “don’t retire,” we mean, “Find work you LOVE and do it for as long as long as you want.” If you love what you do, it won’t feel like “work.”
It doesn’t have to be full-time work. Perhaps you’ll work part-time or seasonally. Maybe you’ll freelance and volunteer on the side. Perhaps you’ll consult, become a travel blogger, or work virtually. Just keep your mind active, keep contributing your wisdom and skills, and keep earning!
81-year old Earnestine Shepherd is the world’s oldest female bodybuilder. She no longer competes in bodybuilding, but she has found her calling in inspiring and training others to be healthy and strong at any age. In this BBC video profile, she declares she’ll do the work she loves “until her last breath”:
Want to envision a future you’ll love? You’ll find inspiring stories and “case studies” in Busting the Retirement Lies, along with some serious number-crunching that may have you re-thinking your 401(k).
#4: Reduce risk with asset allocation
You may know the joke about how 401(k)s “became 201(k)s” in the Financial Crisis. People who planned on retiring saw their investments plummet as much as 50%.
“Easy come, easy go” should not be a phrase that applies to your investments! But the problem is this: most people’s portfolios are comprised of nearly all stocks, and stocks are subject to systemic risk.
For investors with truly diversified portfolios, “Great Recession” was more of a speed bump than a roadblock to retirement. Reduce your risk by following Prosperity Economics™ strategies and investing in diverse asset classes and financial instruments, such as:
- private lending instruments such as bridge loans
- cash-flowing real estate
- business investments
- alternative investments such as oil and gas
- life settlement funds
- and high cash value life insurance.
#5: Raise financially independent children.
From childcare (whether that means staying home with your children or hiring childcare), clothes and food to college expenses, it’s expensive to be a parent. (But worth it!) After a couple of decades, more or less, your financial support should no longer required on an ongoing basis, and you’ll have more to save, invest, or spend.
Unfortunately, some parents keep spending resources on adult children who remain dependent. Increasingly, kids are moving back in with parents after college, where some overstay their welcome.
The trend of many young adults to become self-supporting has become so widespread it now has a name: the “Failure to Launch” syndrome. Unfortunately, parents can contribute to the problem when they keep subsidizing kids and shielding them from the natural consequences of their actions. To avoid this, help kids learn responsibility and independence from a young age. Encourage them to earn (even if it’s through chores or babysitting), save (even if it’s from gifts and allowance), and make wise choices with money.
#6: Focus on cash flow, not net worth.
Typical financial advice helps you accumulate assets in a brokerage account, but too often, financial plans neglect how to turn this into cash flow later. Such strategies may be a better retirement plan for advisors with “assets under management” than for YOU!
When interest rates dropped recently to historic lows, retirees faced hard choices. Should they scrimp and save to live off of “interest only”? Consume equity and risk outliving their savings? Keep the bulk of their investments in equities and pray that stocks will somehow keep going up?
It’s best to “practice” creating cash flow with assets before you must rely on the income from investments. It’s good to accumulate assets, but you must also have reliable strategies to turn assets into income.
#7: Consume assets strategically.
The amount of money accumulated in assets isn’t as important as the amount of spendable income produced by those assets! By accumulating the right assets and spending them in the right order, you might end up with hundreds of thousands of dollars extra in your pocket!
By strategically consuming assets in the most efficient way, you can:
- dramatically reduce taxes
- increase your cash flow and
- protect yourself from market swings and low interest rates
- while increasing your net worth and (likely) leaving more to heirs.
For instance, replacing bonds in your portfolio with high cash whole value life insurance can make a multiple six-figure difference in future spendable income! (This is why we don’t recommend bonds. And we’ll show you a case study in a future post that demonstrates how this move can give you more income—while raising the value of your estate!)
https://prosperityeconomics.org/more-income-in-retirement/?gad_source=1&gclid=Cj0KCQjw4cS-BhDGARIsABg4_J0l2KAriRkuGIow7ClUk7qcp7S0KCZq5NnkEW5v_wHf6W7MuXC89rkaAnfFEALw_wcB
Inherited Roth IRAs and Qualified Charitable Distributions from SEP IRAs: Today’s Slott Report Mailbag
By Ian Berger, JD
IRA Analyst
Question:
Hi,
In a recent blog post, you addressed the complicated rules for a 401(k) to Roth IRA rollover. I have a similar question as it relates to a pre-tax IRA conversion to a Roth IRA.
My client is a 95 year-old woman who has a large pre-tax IRA. She has converted some of the pre-tax IRA to a Roth IRA. This is her first Roth IRA ever.
Suppose she dies three years later, prior to the 5-year holding period being met. The Roth IRA passes to her beneficiaries, who fall under the 10-year payout rule. But what is taxable and what is not?
Thank you in advance,
Bob
Answer:
Hi Bob,
The converted amounts themselves will be tax-free whenever paid out to the beneficiaries. Earnings on the converted amounts will be tax-free only if taken after the 5-year holding period has been satisfied. That period began on January 1 of the year of the first Roth conversion and is carried forward to the beneficiaries. It does not restart for the beneficiaries. So, for example, if your client did her first Roth conversion anytime in 2024, her 5-year period began on January 1, 2024, and even if she dies in 2027, it will end on December 31, 2028. After 2028, the entire inherited Roth IRA will be available tax-free.
Question:
I have three SEP IRAs with three different custodians. I still contribute to one of the SEPs on an annual basis. I am over age 70½. Can I take a qualified charitable distribution (QCD) out of one of the SEP IRAs I am not contributing to?
Answer:
Yes. A QCD can be made from any “inactive” SEP or SIMPLE IRA. A SEP or SIMPLE IRA is considered inactive for a year if an employer contribution isn’t made to it for that year.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/inherited-roth-iras-and-qualified-charitable-distributions-from-sep-iras-todays-slott-report-mailbag/
Avoid Double Trouble by Fixing 2024 Excess 401(k) Deferrals by April 15
By Ian Berger, JD
IRA Analyst
Everyone knows that April 15, 2025, is the deadline for filing 2024 income tax returns. But April 15 is also a crucial deadline if you made too many 401(k) deferrals in 2024. If you don’t fix the error by that date, the tax consequences are serious. Having a tax filing extension for 2024 does NOT give you more time.
The maximum amount of pre-tax and Roth contributions you could make for 2024 was $23,000 (plus another $7,500 more if you were least age 50). Many people are unaware that contributions you make to ALL plans during the year are usually combined when applying that limit. (That aggregation rule doesn’t apply if one of your plans is a 457(b) plan.)
If you were in only one plan during 2024, your plan should have had internal controls to block you from exceeding the deferral limit. If the plan mistakenly allowed you to overcontribute, it’s up to the plan to fix the problem.
But that’s not the case if you were in two different plans during the year (because you had two jobs at the same time or changed jobs). That makes sense because one plan could not be expected to know how much you contributed to the other plan. So, the burden is on you to keep track. Your Form W-2 from each employer indicates the amount of pre-tax and Roth contributions in Box 12. Or, you can check your plan account statements.
If you’ve overcontributed, you must contact the administrator of one of the plans immediately and make them aware of the problem. To avoid double taxation (see below), the error must be corrected by April 15, 2025.
The plan you contact should fix the error by making a “corrective distribution” to you. A corrective distribution is the excess over the $23,000/$30,500 limit, adjusted for earnings or losses attributable to the excess. You’ll receive a corrected W-2 that adds back the excess deferrals to your 2024 taxable income. (If you’ve already filed your 2024 tax return, you’ll need to amend it.) Earnings on the excess are taxable to you in 2025.
Example: Liang, age 48, made $18,000 of 2024 pre-tax contributions to Company A’s 401(k) plan before leaving to work for Company B. Liang didn’t keep track of his total 2024 contributions and made another $12,500 of pre-tax contributions to Company B’s 401(k) – for a total 2024 contribution of $30,500. He exceeded the 2024 deferral limit by $7,500 ($30,500 – $23,000). The excess deferrals earned $700. Liang became aware of this problem in early 2025 and contacted Company B. On March 31, 2025, Company B’s 401(k) makes a corrective distribution of $8,200 ($7,500 + $700) to him. Company B also sends Liang a corrected 2024 W-2 showing an additional $7,500 of 2024 taxable income. He must include the $700 of earnings as taxable income for 2025.
Why is it so important to have this fixed by April 15? Because if the error isn’t corrected by that date, you’ll be hit with double taxation. The excess deferrals won’t be paid to you, but they’ll still count as 2024 taxable income. And the excess, along with related earnings, will be taxable to you a second time in the year they are eventually distributed to you.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/avoid-double-trouble-by-fixing-2024-excess-401k-deferrals-by-april-15/
How Roth IRA Distributions Are Taxed
By Sarah Brenner, JD
Director of Retirement Education
Do you have a Roth IRA? If you do, there will very likely come a time when you want to take a distribution from that account. The distribution rules for taxation of Roth IRA distributions can be complicated, but if they are followed, the reward is tax-free withdrawals in retirement.
Here is what you need to know:
Aggregation
Things can get a little confusing if you have more than one Roth IRA. When determining the taxation of a Roth IRA distribution, all of your Roth IRAs are aggregated. What does “aggregated” mean? Well, simply put, this means your Roth IRAs are considered one account for tax purposes. Your IRA custodian reports the distribution on Form 1099-R to you and to the IRS. You will be responsible for determining the taxation of your distribution. You will use Form 8606 to report the Roth IRA distribution on your federal tax return.
Tax-Year Contributions
Amounts up to the total of your Roth IRA contributions are considered to be distributed first. These amounts are not taxable or subject to the early distribution penalty, even if you take them out before five years or before age 59½. In other words, you always have access to amounts equal to your contributions tax and penalty-free. Maybe, for example, you contributed to your Roth IRA in 2018, and you are now 32 years old and need that money. You will not be taxed or subject to penalty when the amount of that contribution is distributed. It doesn’t matter that you are not yet age 59½ and it doesn’t matter how you use your money.
Converted Amounts
Amounts up to the total of your Roth conversions are considered to be distributed next on a first-in, first-out basis. If you converted both pre- and after-tax amounts, the amount of your pre-tax amounts is distributed first. Distributions of amounts equal to your conversions are not taxable. Remember, you already paid taxes on those funds when you did the conversion. Pre-tax amounts are subject to the 10% early distribution penalty if you are under age 59½ at the time of the distribution and the conversion was less than five years ago. There are exceptions to the penalty such as disability or death. If you are over age 59½, you can immediately access the amount of your converted funds without worrying about the penalty. There is no five-year waiting period for you.
Earnings
The remaining portion of your Roth IRAs are considered earnings and are the last thing distributed from your account. Those amounts are tax-free and penalty-free if the distribution is a qualified distribution. A qualified distribution is made after you have had any Roth IRA account for five years AND you are over the age of 59½, you are disabled, you are taking the funds for a first-time home purchase, or the distribution is to your beneficiary after your death. If your distribution of amounts equal to earnings is not a qualified distribution, it will be taxable and subject to the 10% early distribution penalty, unless an exception applies.
Tax-Free Distributions in Retirement
You are not required to take any distributions from your Roth IRA during your lifetime. Unlike traditional IRAs, Roth IRAs are not subject to the lifetime required minimum distribution rules. However, if you do decide to withdraw funds, a qualified distribution will be completely tax-free and not included in adjusted gross income. By taking a qualified Roth IRA distribution, you can therefore avoid the stealth taxes that hit many retirees hard, such as taxation of Social Security benefits or Medicare surcharges when income rises in retirement.
https://irahelp.com/slottreport/how-roth-ira-distributions-are-taxed/

Weekly Market Commentary

The S&P 500 fell by 3.1% and breached its 200-day moving average before bouncing back in Friday’s session. The Dow lost 2.4%, the NASDAQ tumbled 3.5%, and the Russell 2000 shed 4%. Fourth-quarter earnings results from Target and Best Buy offered a warning about the consumer and the impact of higher prices on their respective bottom lines. Broadcom announced a great quarter and provided a positive outlook for AI infrastructure cap-ex that helped propel the beaten-down Semiconductor sector to a 3.2% gain on Friday.
Longer-tenured US Treasuries sold off during the week. The 2-year yield closed the week unchanged at 4%, while the 10-year yield increased by nine basis points to 4.32%. Significant changes in the outlook for Fed Monetary policy due to US growth concerns hammered the US Dollar index, which fell by 3.5% this week. Notably, the Euro strengthened to 1.0842, relative to the dollar.
Oil Prices continued to fall. WTI lost 3.7% or $2.60 to close at $67.11 a barrel. Gold prices increased by $66.30 to close at $2916 an Oz. Copper prices rallied 3.7% on tariff talk, closing the week at $4.71 per Lb. Bitcoin closed a volatile week at $86,600.
