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    March 8, 2013
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AskKen's Answers
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I have 4 IRA's at different institutions. Can I take my RMD from just two of the four as long as the total amount taken adds up to the RMD

In other words, can I take the total RMD amount from any permutation or combination of IRA accounts where I may not take any money from one account, take the specific RMD for that particular institution from another account and then take more than the specific RMD amount from a third institution to obtain the total of my combined RMD from all institutions for the year.
Thank you for your question.

Although the MRD for each IRA has to be calculated separately, you may distribute the total MRD amount for all your IRAs from any combination of those IRAs. Note that you may only aggregate the IRA MRDs; you cannot include MRDs for 401(k)s or other account types.

I suggest you visit our Retirement Distribution Center, available at www.fidelity.com/RDC , which has an estimated MRD for each of your Fidelity IRAs and links to additional information about MRDs.
Hope this helps you.

Ken
1 week, 2 days ago
by
AskKen
 

If I have a 403(b) and a 457, can I also open an IRA?

Thanks for your question. There is no restriction on opening an IRA if you are already a participant in a workplace plan like a 403(b) or a 457. The only thing that might be impacted is your ability to deduct the IRA contributions from your taxes, depending on your income level. If you already have a workplace plan, and your income is above a certain amount, then Traditional IRA contributions are not tax-deductible. For 2015, these limits are $71,000 for single tax filers and $118,000 for married filing jointly.

For more information, you can link to the Traditional and Roth IRA pages on Fidelity.com from the Fidelity IRA Center at https://www.fidelity.com/retirement....

Ken
1 week, 2 days ago
by
AskKen
 

Can I recharacterize traditional IRA contributed 5 years ago into my existing Roth IRA?

I am single and have been out of work for a long time. My last contribution to a rollover traditional IRA was in 2012. I also have an existing Roth IRA created while I was employed. I believe I can save on taxes if I am allowed to recharacterize some of my traditional IRA into a Roth IRA since not working puts me in a lower tax bracket today. Can I do this and file income tax returns to pay any income tax that may be due? Awaiting your advice.
Thanks for your question. Yes, it sounds like this may be a good time for you to think about converting since your income is lower than usual. If you choose to convert Traditional IRA assets to your Roth IRA, any amount converted will be considered income in the year of the conversion, so your thinking is spot on.

If you are interested in moving forward with the conversion you can find more information here: https://www.fidelity.com/retirement... Or, as always, you can give us a call at 800-343-3548. Good luck in your job search.

Ken
1 week, 2 days ago
by
AskKen
 

Can 2014 or 15 MRD be distributed directly to a charity?

Thank you for your question. The tax-free distributions to charity you are referring to are known as Qualified Charitable Distributions (QCDs) by the IRS. President Obama signed into law the “Tax Increase Prevention Act of 2014” on December 19, 2014.

However, they were only extended for 2014, and are currently not extended for 2015. There are no transitional rules allowing a 2014 QCD to be made in 2015, so you would have had to process your 2014 QCD before December 31, 2014.

In the meantime, you may want to enroll in checkwriting for your IRA account. This will enable you to write a check directly to the charity should QCDs be extended for 2015. Checkwriting can be accessed here on Fidelity.com: Under the Accounts & Trade tab at the top of our home page, go to Update Accounts/Features, then select Checkwriting for your account.

Please check back with Fidelity.com throughout the year on QCDs. If QCDs are extended for 2015, we will post an update on the Retirement Distribution Center available at Fidelity.com/RDC.

Hope this helps you.

Ken
1 week, 6 days ago
by
AskKen
 

MRD distributions

I forgot to take my MRD in 2014. What should I do?
Thank you for your question. If you forgot to take your minimum required distribution (MRD) for the last year, you should talk to your tax advisor as soon as possible. In most cases, it is best to take it as soon as possible once you realize you missed it. The penalty from the IRS for missing your MRD is 50% of the amount you should have withdrawn, but you may be able to file for an exemption from the penalty by submitting an IRS Form 5329 with your annual tax filing.

To make sure this doesn’t happen again, we suggest that you establish an MRD automatic withdrawal plan for your account in future years. You can access that via the Retirement Distribution Center at www.fidelity.com/RDC

Hope this helps you.

Ken
2 weeks, 2 days ago
by
AskKen
 

First and second MRD

I turn 70 on 10-9-2015 and 6 months after is 4-9-2016 so if I wait until 4-2-2016 to 4-8-2016 to take my first MRD do I need to also take a second MRD in 2016? I do not want to take two MRDs in the same year.
Thank you for your question on taking your first minimum required distribution (MRD).

If I have done the math correctly, your date of birth was 10/9/1945. And if that is correct, your first MRD is due in 2016, the year you turn 70½. The deadline for that first MRD would be 4/1/2017. Your second MRD, for year 2017, would be due by 12/31/2017.

If you do not want to take two MRDs in one year, you should take your 2016 MRD by 12/31/2016 and your 2017 MRD by 12/31/2017.

Also, visit our Retirement Distribution Center to see an estimate for your first MRD, as well as links to articles and automatic withdrawals for MRDs. This page offers more information about the RDC, plus a link to the Center: https://www.fidelity.com/retirement...

Hope that helps you out.

Ken
1 month, 1 week ago
by
AskKen
 

I am a US citizen working abroad and have a traditional IRA. Can I still contribute?

I am a partner in a Florida registered corporation doing business overseas and I reside overseas. Can I continue to invest in one of my existing IRA's, either traditional or 401?
Thanks for your question. Generally speaking, it is possible to contribute to an IRA if you are a U.S. citizen working abroad, but there are some issues to be aware of depending on your situation. For example, one requirement for contributing to an IRA is that you must have compensation income as defined by the IRS. If you are using the Foreign Earned Income Exclusion to exclude all of your income from taxation in the U.S., you would not have the income required to make a contribution to your IRA.

For those working abroad there can be a complicated balance between minimizing your taxes and remaining eligible for the retirement savings vehicles you’ll need to maintain your retirement savings plan. For that reason we suggest speaking with a qualified tax professional with experience in dealing with situations specific to expatriates.

Ken
1 month, 2 weeks ago
by
AskKen
 

Can I withdraw my Roth IRA at the age of 55 without any penalty?

Hi Thomas. Thanks for your question.

One of the benefits of a Roth IRA is the additional flexibility that it provides regarding withdrawals. If you are under age 55, you may withdraw your contributions from the account without penalty at any time. However, to withdraw earnings on those contributions, there are two stipulations: you must be age 59½ or older AND you must have made your first contribution to the account at least five years ago. The five year time period starts on January 1st of the year in which you make your first contribution.

Ken

Additional Important Information:
A distribution from a Roth IRA is tax free and penalty free, provided the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, disability, qualified first-time home purchase, or death.
1 month, 2 weeks ago
by
AskKen
 

What will be the 2015 IRA contribution limits?

Thanks for your question. The IRA contribution limits for 2015 are unchanged from 2014. So if you are under age 50 you can contribute up to $5,500 (or 100% of you earned income, whichever is less) and if you are age 50 or older you can contribute up to $6,500.

If you haven’t yet retired, you may be interested in knowing that the IRS did increase contribution limits for 401(k)s in 2015, however. Employees under 50 can contribute $18,000 (up from $17,500 in 2014), and employees over 50 can contribute an additional $6,000 (up from $5,500 in 2014).

Ken
1 month, 3 weeks ago
by
AskKen
 

Required Distributions of Inherited Roth IRA

What are the rules for RMD's on inherited Roth IRA's, spouse vs. non-spouse? Does a spouse inheriting a Roth IRA have to take RMD's during their lifetime? What about a non-spouse beneficiary - does the non-spouse beneficiary have to take RMD's? If so, how are they calculated?
Thank you for your questions. The rules for Roth IRAs that are inherited are, in fact, different depending on the relationship to the deceased original owner.

If you were the spouse of that original owner, you are not required to take minimum required distributions (MRDs or RMDs) if you take the Roth IRA as your own.

If you are a non-spouse beneficiary of the original owner, you do have to begin taking MRDs from that Inherited Roth IRA by December 31st of the year after the year of death. The MRDs are calculated based on a few factors. Assuming you separated the assets into your own Inherited Roth IRA in a timely fashion, you base the MRDs on your age, and use the Single Life Expectancy Table from the IRS. You would calculate an MRD for the account in the year after the year of death and derive the life expectancy factor for that year based on your age in that year. You can find the Single Life Expectancy Table on our website here: http://personal.fidelity.com/produc.... As you can see in the table, if you are 40 years old in the year after the year of death, then you would be using a Life Expectancy factor of 43.6 for your MRD. Then each year after that year, you would subtract one from that Life Expectancy factor and use that to calculate your MRD.

An easy solution for you would be to sign up for automatic withdrawals for inherited accounts on Fidelity.com/autowithd where your MRD will be calculated for you each year, and then distributed based on the schedule you choose.

If you have an Inherited Roth IRA with Fidelity, you will have access to our Retirement Distribution Center (RDC) where we estimate your MRD each year. Learn about the RDC here: https://www.fidelity.com/retirement...

We also have two Fidelity Viewpoints® articles that have helpful information about inherited accounts for spouse inheritors (https://www.fidelity.com/viewpoints...) and non-spouse inheritors (https://www.fidelity.com/viewpoints...).

This page on our website offers an overview of MRD rules for inherited accounts: https://www.fidelity.com/retirement...

You can always talk to a Fidelity retirement representative about the MRD for your account if needed.

Ken
2 months ago
by
AskKen