The beginning of a new year is a great time to review what you should and shouldn’t be doing. That’s why in this special retirement replay edition of the Retirement Made Easy podcast, we’re revisiting episode #110: The Great 8 IRA Mistakes that WILL Cost You Money. This episode covers 8 things you should be mindful of as we dive into 2023:

  1. If you’re a non-working spouse, take advantage of the spousal IRA option that’s available to you (you and your spouse can each contribute up to $7,000 per year.
  2. Did you know that you don’t have to take required minimum distributions (RMDs) from Roth IRAs? If you don’t need the money, don’t take the withdrawal and pay unnecessary taxes!
  3. Don’t roll over an IRA or 401k that has company stock in it or you’ll have to pay capital gains on the stock (net unrealized appreciation). Talk to a financial advisor first!
  4. Make sure you designate a beneficiary on your IRAs, or your estate will move into probate court when you die (leading to an unnecessary for your family to endure).
  5. Don’t list a trust as the beneficiary of an IRA. the receiver only has 10 years to empty it and pay taxes. Secondly, trusts are taxed at a high rate ($13,450 and higher is taxed at 37%).
  6. If you’re under 59 and ½, make sure you do Roth conversions properly so you’re not paying Uncle Sam a 10% early withdrawal penalty.
  7. Make sure you’re not contributing to a Roth IRA or traditional IRA if you’re above the income cap, or you’ll be paying a steep 6% penalty each year the excess remains in the account(s).
  8. Whenever possible, don’t do an indirect rollover. If the money from an IRA is sent to you and you don’t put it in another IRA within 60 days, you’ll have to not only pay taxes on the money but also pay a 10% penalty. Ouch.

If you avoid some of these costly mistakes (and follow some of the advice) you should be well on your way to saving for retirement and avoid getting hit with unnecessary taxes and penalties.

Listen to the whole episode for more details!

Resources & People Mentioned

Connect With Gregg Gonzalez

Subscribe to Retirement Made Easy
On Apple PodcastsSpotifyGoogle Podcasts

Connect With Gregg Gonzalez

Subscribe to Retirement Made Easy