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Pure Financial’s experts have educated you on the importance of having an IRA and given you some basic tools and strategies that you can put in place to help get the best results from your retirement accounts. But on this show, Joe Anderson and Alan Clopine take you to a whole new level to help you master your IRA and maximize its full potential.

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Important Points

(1:00) – We’ve educated you about the importance of having an IRA and some of the basic tools and strategies you can put it in place to get the best results. But today we are taking you beyond the basics of IRA 101 to Master Your IRA.

 

(1:53)

  • To Roll or Not to Roll
  • Net Unrealized Appreciation
  • RMD Aggregation
  • Stretch IRA
  • Beneficiary Mistakes

 

(3:20) – How You Can Add Funds to Your IRA

 

(4:05) – Reasons to Keep your 401(k)

  • 401(k) fees may be low
  • Penalty-free access at age 55
  • Institutional investments may be available
  • Potentially better protection from creditors

 

(5:21) – Reasons to Roll Your 401(k) into an IRA

  • 401(k) fees may be high
  • More investment choices possible
  • To consolidate & simplify
  • Roth conversion advantages

 

(6:12) – Speaking of 401(k)s, when you have company stock in your 401(k), there is a little-known strategy that can save you thousands of dollars in tax. It’s called “Net Unrealized Appreciation (NUA)”…

 

Net Unrealized Appreciation Strategy (NUA)

  • Distribute company stock to your brokerage account
  • Ordinary income taxes are due on cost basis
  • Capital gains taxes are due on net unrealized appreciation, upon sale

 

(7:16) – Tax Savings Example Using Net Unrealized Appreciation (NUA) Strategy

 

(8:36) – Is the required beginning date of your first required minimum distribution (RMD) from an IRA in the year you turn 70½?

 

(9:48) – Let’s discuss the rules regarding required minimum distributions (RMDs)…

Hypothetical Example of First Year Required Minimum Distribution

 

(12:01) – Required Minimum Distributions (RMD): IRAs vs 401(k)s

IRAs

  • All accounts may be combined
  • Only need one RMD for all accounts

401(k)

  • An RMD is required for each account

 

(13:12) – Inherited IRAs – Spousal

  • Keep as a Beneficiary IRA
  • Add to Your Own IRA

 

(15:20) – Inherited IRAs – Non-Spousal

  • 5-Year Distribution
  • Stretch IRA (RMDs over beneficiaries’ lifetime)

 

(16:00) – Example of Account Titling for a Stretch IRA

  • “John Doe IRA (Deceased August 1, 2018) FBO Janice Brown”

 

(17:40) – Am I allowed to donate my required minimum distribution directly to a charity if I’m over 70 ½ and it is less than $100,000?

 

(19:54) – Let’s talk about some very common and unfortunate mistakes that we see regarding beneficiary designations…

 

Common Beneficiary Mistakes:

  • Not Naming a Beneficiary
  • Forgetting to Change Spousal Beneficiary after Divorce
  • Not Naming a Contingent Beneficiary
  • Naming Your Trust or Estate as Beneficiary

 

(21:40) – Steps to Help You Manage Your Beneficiaries

 

(23:00) – VIEWER QUESTION: I want my six grandchildren to inherit my IRA. Is it better to make my family trust the beneficiary or name each of the children as beneficiaries?

 

(24:16) – My wife has a large percentage of her retirement savings in a Roth IRA. Can I take my RMD’s from her Roth to save money on taxes?

 

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About the Hosts

Joe Anderson

President

CFP®, AIF®

As President of Pure Financial Advisors, Joe Anderson has led the company to achieve over $2 billion in assets under management and has grown their client base to over 2,160 in just ten years of the...

Alan Clopine

CEO & CFO

CPA, AIF®

Alan Clopine is the CEO & CFO of Pure Financial Advisors. He currently shares the CEO role with Michael Fenison, the original founder of the company. Alan is primarily responsible for the day-to-day activities of...