Your I.R.A. ‘Honey-Do’ List

  If you’re looking for longevity both in life and money here are two basic rules: Everything in moderation and don’t forget to manage your Individual Retirement Account.

I can’t help with the moderation but I can about managing IRA assets. Some of us ignore our inactive retirement accounts like the blinking red engine light on the car dash and that’s a shame especially during a time when every penny is needed.

For most of us who are employed the IRA is not the largest or most important asset we own. It probably falls behind the 401k or equity in the home in value but still shouldn’t be treated like a fourth cousin. Craig Copeland, a senior research associate at Employee Benefit Research Institute, estimates that there is about $13 trillion in IRA assets. So before the year- end pull out all your most recent inactive retirement account statements and make sure you’re up to date on your ‘honey-do’ list:

1. If you’re of the age 70 1/2 and older make sure that you’ve taken your Required Minimum Distribution. If you own an inherited IRA and you’re doing the stretch make sure you’ve taken the necessary income from the plan. If not it will bite you to the tune of 50% of what you should have taken out. Yes, this is a huge ouch. If you were supposed to take out $5,000 and don’t the punch-line is $2,500. Got it?
2. Did you make excess contributions or non-deductible contributions? Make sure there is a paper trail and remove any excess before the year is up.
3. Did you move stuff around? If so make sure that whatever you did that it went to an IRA and not a non-IRA. You may blame the bank clerk if there is a mistake but chances are they’re long gone and you’re stuck with the jumbo taxes and penalties. (The excuse, ‘I didn’t know what I was signing’, doesn’t work for adults.)
4. Did you inherit an IRA this year? Make sure you’ve decided on how to take distributions.
5. Beneficiaries? You & I know you want your kids to get the money but when was the last time you checked who was getting what? The beneficiary could be two spouses back and it needs to be changed. Don’t forget the secondary beneficiary.
6. Check your investment allocation and does it match with where you are today? If not- update.
7. Got an old 401k, 403b or deferred comp somewhere? Bring it into your IRA. You have more choices, probably less cost and much more control then you do leaving it out in the cold.
8. If you leave your retirement money with your old employer and they file for bankruptcy you may have to wait and wait and wait before being able to move your IRA. Do it before bad things happen. It’s easy to move & call me with Qs and forms you need.

Do all the above and you’re good to go for another year. Call me if you have Qs.

Call Paul@ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.