Beware of the New 60-Day Rollover Rules - 54

The IRS changed the rules for IRA rollovers and not everyone is catching on. Taxpayers can only perform one 60-day IRA rollover in a 12-month period, no matter how many IRAs they own. Joe Anderson, CFP® & Alan Clopine, CPA go over this new rule and share how you can avoid getting hit with high tax bills in YMYW podcast 54. Original publish date August 6, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed. 

00:00 - Intro

01:04 - “[We made a] 7-minute video on how to plan your finances in your 20’s and 30’s. The sooner you start, the better off you’ll be.”

04:41 - “We’ve been talking about costly retirement mistakes, and this is a relatively new one [60 day rollover rule]. It’s indirectly rolling more than one IRA in a 12-month period - it’s no longer allowed.”

08:11 - “It’s the direct rollover where the IRS won’t withhold taxes but if you select rollover, they will.”

12:19 - “If you’re pulling money out of your retirement account for your own purposes, whatever they might be, how do you expect your retirement accounts to grow with compound rates of return if you’re taking money out?”

16:54 - “The truth is, taxes don’t stop when your paycheck does – in fact, now you start tapping your retirement accounts and it comes with all new rules and opportunities.”

23:19 - “There are ways around the 10% penalty, but it’s not nearly as flexible as if you just wait until age 59 ½.”

27:10 - “A lot of you who are taking your required minimum distribution or that are going to be taking your distributions might not need to spend it…you don’t have to take that money in cash if it’s in an IRA. You can take shares and put it in your brokerage account.”

31:09 - “There’s a potential tax-saving feature called net unrealized appreciation.”

33:18 - “If you take money out of an IRA before age 59 ½, you have to pay a 10% penalty. If you don’t take your required minimum distribution at 70 ½, the IRS charges you a 50% penalty.”