Surgent's Key Roth IRA and Roth 401(k) Rules for Funding and Tax-free Distributions

Overview

How much can you contribute to a Roth IRA, Roth 401(k), SEP Roth IRA, or SIMPLE Roth IRA? How will a Roth distribution qualify to be tax-free? How did SECURE Act 1.0 and SECURE Act 2.0 change the Roth rules? These are only some of the key Roth questions advisors must know the answers to. Plus, as Roth accounts have increasingly become an essential component of retirement savings portfolios, with one-third of IRA owners owning Roth IRAs, advisors have even more reasons to be Roth-proficient. To that end, the instructor will simplify critical rules that govern Roth funding and Roth distributions for Roth IRAs, Roth 401(k)s, and sister plans.

Prerequisites

A basic understanding of funding and distribution rules for IRAs and rollover rules for employer plans

Objectives

• Explain the eligibility requirements for funding Roth IRAs and Roth 401(k) plans
• Describe the tax impacts of rollovers from employer plans to Roth IRAs
• Demonstrate the steps that determine whether a Roth distribution is tax-free
• Determine when the ordering rules apply

Highlights

• Funding options for Roth accounts
• 529 plans to Roth IRAs
• Backdoor Roth strategies
• The new Roth SEP and Roth SIMPLE IRAs
• Roth 401(k) contribution rules
• The tax impact of rolling a 401(k) to a Roth IRA
• Who can start the Roth IRA 5-year clock?
• The 5-year rules for Roth 401(k)s and Roth IRAs
• Direct and indirect Roth conversions
• Direct and indirect rollovers from Roth 401(k) plans
• The risky recapture of the 10% penalty
• How the ordering rules work and when they apply
• FIFO rules for Roth IRAs
• Case studies and cheat sheets to reinforce concepts