Ed Slott - The New Retirement Savings Time Bomb: How to Take Financial Control, Avoid Unnecessary Taxes, and Combat the Latest Threats to Your Retirement Savings

Praise for Ed Slott and The New Retirement Savings Time Bomb

Unless you consider cat food a viable dinner option, its wise to take action now to bulletproof your retirement assets. Sooner or later, we pay taxes. But why allow your retirement savings to become a windfall for Uncle Sam when the money should go to you and your heirs? [Slott] will show you how to keep your cash all in the family.

USA Today

Ed Slotts advice could save your retirement plan from something worse than a Bear Marketthe tax collector!

Terry Savage, author of The Savage Truth on Money and nationally syndicated personal finance columnist

Ed Slott is my go-to resource on the nuances of tax and retirement planning. His no-nonsense style makes the dizzying changes in the rules and laws surrounding these often confusing topics understandable and more importantly, actionable.

Jill Schlesinger, CFP, CBS News Business Analyst

Ed Slott is my go-to person for smart, tax-saving advice on retirement plans. Right now, people planning for retirement especially need his help. Congress has passed a slew of new laws affecting your personal tax-favored plans, some of which make them less secure. This book shows you how to wring all the tax benefits possible from your plans, including smart ways of passing any remaining money to your heirs. Highly recommended!

Jane Bryant Quinn, author of How to Make Your Money Last: The Indispensable Retirement Guide

Ed Slotts mastery of IRA dos and donts makes this book must-reading for any IRA owner who wants to know how to save for retirement.

Paul Katzeff, senior reporter/writer, Investors Business Daily

If you have questions about IRAs or other retirement plans, youll find every last answer in this easy-to-understand and hugely informative book. Ed Slott is truly Mr. IRA.

Lynn OShaughnessy, author of The Retirement Bible

If youre planning for or living in retirement, this book is required reading. Ed Slott is among the most trusted and knowledgeable retirement experts in the United States and the insights you will gain from reading this book will be invaluable. Youll learn how to create tax-efficient retirement income, take advantage of the most recent tax laws, as well as pass on more of your hard-earned wealth to your loved ones. The world is filled with those who proclaim to be retirement experts, but Ed Slott is truly thatan expert who deserves your time and attention.

Robert Powell, editor of Retirement Daily and TheStreet, USA Today columnist, editor of Retirement Management Journal, and host of Exceptional Advisor podcast

Retirement planning is more complicated than it ought to be, but thats where Ed Slott comes in. He has a knack for providing tax- and retirement-planning guidance thats easy to understand, up-to-the-minute current, anddare I say it?fun. This book will be an indispensable part of many retirees toolkits.

Christine Benz, director of personal finance, Morningstar

If you need to understand the ins-and-outs of retirement, look no further than this book by Ed Slott. He is the go-to expert for reporters and media folks like myself. When I have a question, I call Ed!

Erin Arvedlund, author of Too Good to Be True: The Rise and Fall of Bernie Madoff and financial writer, Philadelphia Inquirer

Congress has turned retirement savings into a quagmire of laws, regulations, and acronyms that can serve as tax traps or opportunities. Ed Slott can explain them with care and flair.

Kathleen Pender, business columnist, San Francisco Chronicle

If you have assets in a retirement plan The NEW Retirement Savings Time Bomb will save you money.

Natalie B. Choate, author of Life and Death Planning for Retirement Benefits: The Essential Handbook for Estate Planners

Ed Slott is the go-to expert on IRAs in an era when legislative and regulatory changes are popping up as fast and furious as a whack-a-mole game. Arm yourself with the latest insights on how to protect future retirement savings by making tax-savvy moves today.

Mary Beth Franklin, CFP, contributing editor, Investment News

penguin books

THE NEW RETIREMENT SAVINGS TIME BOMB

Ed Slott is a highly sought-after professional speaker, CPA, and tax advisor. His diverse client list includes major corporations such as New York Life, Fidelity Investments, Merrill, Nationwide Insurance, and Prudential. Slotts writing frequently appears in national publications such as The Wall Street Journal, The New York Times, and USA Today, and he has appeared on broadcast television and radio stations nationwide. He is publisher of the popular monthly newsletter Ed Slotts IRA Advisor. For more information, visit his website: www.irahelp.com.

To my mom and dad. They truly lived a wonderful life.

To my wife, Linda, and our children, Ilana, Rachel, and Jennifer.

CONTENTS

AUTHORS NOTE

This book is about the jeopardy that youand everyone you knowwill face when the taxman shows up at distribution time, regardless of the type of tax-deferred retirement savings plan you have. Now, your retirement savings are at even greater risk with new tax laws like the massive SECURE Act (which actually makes your retirement savings less securethanks, Congress!). Every type of plan is affected, be it an Individual Retirement Account (IRA), a Roth IRA, a 401(k), a Roth 401(k), a 403(b), a Roth 403(b), a 457(b), a Roth 457(b), a Keogh plan, a SEP-IRA, a SIMPLE IRA, or a mixture of accounts. Ill be using the term IRA throughout the book as an umbrella term for all these retirement savings plans because the tax rules governing IRAs are generally the same as those for every type of retirement account. However, in those areas where the rules for a particular plan differ from those of IRAs, I will clearly point out the difference to you. Likewise, Ill be using the term company plans throughout this book as an umbrella for all types of employer plans, not just qualified plans. (See Talking the Talk for the difference.)

I want to give a special nod up front to Beverly DeVeny, our long-time and now happily retired IRA expert; Sarah A. Brenner, J.D., our director of retirement education at Ed Slott and Company; and Andy Ives, CFP, AIF, and Ian Berger, J.D., our IRA analysts. They were a tremendous help with checking and double-checking this manuscript for technical accuracy. They went well beyond, generously contributing their time and energy to make it as reliable and error-free as possible. Thanks, Beverly, Sarah, Andy, and Ian for helping me defuse the retirement savings time bomb, and especially for your insights on the many recent tax law changes included in this edition. I can assure my readers that any inaccuracies that may still lurk herein are mine, and I take full responsibility for them.

Ed Slott

INTRODUCTION