Required Minimum Distributions - Quest Trust Company

How a Change of Career Can Impact Your Self-Directed IRA
The process of building up a retirement nest egg doesn’t occur in a vacuum. You can come up with a savings plan and investment plan, but if the other financial elements of your life undergo significant changes, you might have to adjust those plans. One thing that can impact your self-directed IRA in several important ways is changing your job or career. New Income Levels As you are likely already aware, your ability to contribute to a traditional self-directed IRA or a Roth self-directed will depend on your modified adjusted gross income, as well as whether you’re participating in an employer-sponsored retirement plan such as a 401(k). For 2021, for example, if you’re a single taxpayer and you’re covered by a retirement plan at work, you can only deduct the full amount of any contributions you make to a traditional self-directed IRA if your modified gross income is $66,000 or less. With respect to a Roth self-directed IRA it is irrelevant whether or not you participate in an employer-sponsored retirement plan, but you can only make the maximum contribution to your Roth account if your modified adjusted gross income is less than $125,000. Clearly there are several moving parts here, but the bottom line ...
Steps For Rolling Over Existing Accounts Into A Self-Directed IRA
As people work their way through one or more careers, and have several (if not dozens) of jobs, they can easily accumulate multiple retirement accounts. They generally come in the form of 401(k) accounts at past employers, traditional IRAs, Roth IRAs, and perhaps even employer pension plans (although this last type of benefit is becoming increasingly rare). Unfortunately, it can often become quite an administrative burden to manage so many different accounts. For some individuals it can be challenging enough trying to come up with the time to review the monthly or quarterly statements from a single retirement account. Trying to do so for a half-dozen or more accounts can quickly become nearly impossible. The best way to clear up this administrative nightmare is to roll over all of your existing accounts, including accounts from prior employers, into a single self-directed IRA. Here are the steps for doing so. 1. Identify Your Target Account. If you don’t currently have a self-directed IRA, then you’ll need to set one up before you go any further. Requesting a rollover from a prior 401(k) or a current IRA, but not having a target account in place, can result in the other plan administrator sending you a check for ...
Does a Qualified Charitable Distribution Make Sense for You?
Did you know you can support your favorite charity and satisfy your required minimum distribution (RMD) for the year? A qualified charitable distribution (QCD) allows individuals who are age 70½ or older to make charitable donations directly from their individual retirement accounts (IRAs). The funds will never pass through the hands of the account holder, offering a seamless and efficient way to make charitable contributions. This type of distribution has gained popularity among retirees and offers several tax advantages. Advantages of QCDs One key advantage of a QCD is that it satisfies the required minimum distribution (RMD) rules. Typically, you are required to take an annual minimum distribution from your Traditional IRA starting at age 73. (Prior to January 1, 2020, it was 70½, which is why the QCD minimum age was set at 70½.) This distribution is required, whether or not you need or want the funds. Failing to do so can result in hefty penalties. By making a QCD, you can satisfy your RMD obligation while also benefiting a charitable cause. Another advantage of a QCD is that it can reduce your taxable income. Since the distribution is excluded from the taxpayer’s income, it can help lower your overall tax liability. ...