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    April 2, 2013
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I WILL TURN 70.5 YEARS on April 10, when is the required date that I have to withdraw? Can I withdraw in 2017 w/o penalty?

Hi Fred,

Thanks for the question. According to IRS rules, minimum required distributions (MRDs) must begin the year you turn 70½, and these rules apply whether or not your account has capital gains or losses.

For your first MRD only, you have until April 1, 2017, to withdraw the funds. All subsequent MRDs must be taken by December 31 of each year. However, if you wait until April 1, 2017, to take your first MRD you will also have to take your second MRD that same year before December 31.

If you choose to delay, the two MRDs taken next year will be counted as income for the same tax year, so that might affect your tax situation. If you’re considering this, you may want to discuss your situation with your tax advisor.

Here is a link to our Learning Center article about taking your first MRD, and the decision to delay or not. https://www.fidelity.com/learning-c...

Please visit our Retirement Distribution Center (RDC) to see an estimate for your MRD, track your distributions toward meeting your requirement, as well as a link to enroll in automatic withdrawals for MRDs. This page offers more information about our Retirement Distribution Center, and includes a link to get you there: https://www.fidelity.com/retirement...

Ken
2 months, 4 weeks ago
by
AskKen
 

Can one have a conventional IRA when some earnings are under a pension plan?

My son works part time with a union that provides pension benefits and part time as an individual contractor. Does the work with the pension plan preclude him form contributing to a conventional IRA?
Thanks for your question about your son’s pension plan. A Traditional or Roth IRA is a great complement to any defined benefit plan like a pension. Whether your son chooses a Traditional or Roth IRA will depend on his income and coverage status in the workplace plan but there is no prohibition against contributing to an IRA while covered by a pension.

He can use our IRA Contribution Calculator at https://scs.fidelity.com/products/m... to determine his eligibility for a Roth and how much of his Traditional IRA contribution might be tax-deductible. I hope this information is helpful.

Ken
2 months, 4 weeks ago
by
AskKen
 

What are the fees to roll over a Fidelity IRA to a Fidelity Roth IRA?

The account would remain in the same ETF---merely become a Roth and I am over age 60.
Thanks for your question. There are no fees from Fidelity to convert your Traditional IRA to a Roth IRA. It’s likely, however, that there will be some significant tax implications if you decide to do this. If your Traditional IRA has any contributions that you deducted from your taxes or any earnings on any contributed amounts, taxes will be due on those in the year that you convert to a Roth IRA. Note that the additional income of the conversion may also bump you up to a higher tax bracket. One option to consider is rolling over the funds gradually, over a period of time, to reduce the tax impact.

You can use our Roth Conversion Evaluator tool to help you decide whether a conversion is right for you and if so, how much you might consider converting. You can find that tool here: https://calcsuite.fidelity.com/roth...

Ken
2 months, 4 weeks ago
by
AskKen
 

Are there income limits to contribute to an IRA and a Roth IRA? I am 55 years old.

Neither myself or my spouse have a retirement pension she is 55 years old as well.
Thanks for your question. There are no income limits on your ability to contribute to a Traditional IRA.
Anyone can contribute up to the IRS limit in a given year – for those over age 50 it is $6,500 for 2016. However, income is a factor with Traditional IRAs when determining how much of the contribution is tax deductible. For 2016, you qualify for a full or partial tax deduction if your modified adjusted gross income (MAGI) is less than $118,000 if married, or less than $71,000 if single.

In the case of a Roth, there are income restrictions on who is eligible to make contributions. For 2016, you can only contribute to a Roth IRA if your income is less than $183,000 for a full contribution if married, or $116,000 for a full contribution if single. You can make partial contributions if married and your income is between $183,000 and $193,000, and you can make partial contributions if single and your income is between $116,000 and $131,000.

An easy way to see what you are eligible for is to use our IRA Contribution Calculator: https://scs.fidelity.com/products/m...

Ken
2 months, 4 weeks ago
by
AskKen
 

If I contribute to Roth IRA for 2015 after I filed my tax return, Do I need to re adjust it later?

Thanks for your question. You should not have to adjust your tax return if you made a prior year Roth IRA contribution for 2015 after you filed your taxes. Since a Roth contribution is not tax deductible but does grow tax-free and can be withdrawn tax-free if you meet the requirements, there is no need to recognize it on your tax return. Keep in mind, however, that the deadline for 2015 contributions to both Roth and Traditional IRAs is April 18, 2016.

For your own purposes, I suggest that you record the amount contributed in the event that you ever want to take a distribution before age 59½. Contributions are not subject to tax or penalty on withdrawal, but earnings can be.

Ken
3 months, 1 week ago
by
AskKen
 

I setup a new corporation in March 2016, can I setup Simple IRA for this newly incorporated company?

I just setup a new C type corporation in March 2016. Is possible this newly formed corporation can setup Simple IRA in 2016 and start contribute from corporation and newly hired employees? The newly formed C type corporation has two employees, husband(50% ownership) and wife(50% ownership). I am changing from individual business (sole business) to a newly formed c type corporation. I have heard that Simple IRA has some requirements for employees to contribute such as 2 years preceding wage compensation. But this is just a newly formed corporation in 2016, we don't have preceding 2 years wages requirement.

I am planning to discontinue all self-employed retirement plans(I didn't contribute to any retirement plan except individual Traditional IRA for 2016, contributed max $5500 for 2016) and start Simple IRA in 2016 under the newly formed corporation in 2016. I have a fidelity IRA account. Is it possible (me and my wife) to setup a corporation Simple IRA in 2016 and start contribution to Simple IRA in 2016 under this newly formed corporation(100% husband and wife ownership), incorporated in California March, 2016?
Thanks for inquiring about a SIMPLE IRA plan for your newly established corporation.

Yes, you can establish a SIMPLE IRA for 2016 and begin contributing this year. The deadline for establishing a plan for 2016 is October 1st. The great thing about the SIMPLE IRA is that you can choose when employees are eligible to participate. You can make this selection on the Plan Adoption Agreement.

You can find more information about the process of setting up SIMPLE IRAs at: https://www.fidelity.com/retirement.... All of the necessary paperwork to set up your SIMPLE IRA can be found here.

If you have further questions, you can speak with one of our small-business retirement specialists at 800-544-5373, Option 3, who can help walk you through the paperwork. We also suggest that you consult with your tax advisor.

Thanks so much for this opportunity to help you!

Ken
3 months, 2 weeks ago
by
AskKen
 

Considering converting IRA to Roth IRA

How do I determine the amount of funds I should convert from my IRA to my Roth? My wife is working, but I am not. I have about $400,000+ in my IRA. I contribute yearly to my Roth and my wife's Roth.
Thanks for your question. There are generally three things to consider when deciding whether to convert to a Roth IRA and how much—taxes, timing, and cost. You’ll need to consider your current tax bracket and your projected tax bracket in retirement, how much time you have before you are going to start taking distributions, and the tax cost of the conversion. This last factor, the tax cost, is often an important consideration. If the contributions to your Traditional IRA were made pre-tax, taxes will need to be paid on the amount converted to the Roth, which could be a substantial amount. With any decision like this it’s usually a good idea to consult with a tax advisor to make sure all of the angles are covered.

Here’s a Fidelity Viewpoints® article that I hope you will find helpful: https://www.fidelity.com/viewpoints....

Ken
3 months, 2 weeks ago
by
AskKen
 

Where should I put my 2015 IRA investment-in tradit. or Roth?

I retired on 9/30/2015. I have a pension and 401k thru my employer( GM). My total income last year was near but below 80,000, and I am over 50 and married. WILL I get a tax deduction if I invest 6,500 in the traditional IRA??? P.S. My wife is a homemaker and has no pension or 401k..
Hi Jim,

Using the information you provided, it appears that you would qualify for a fully deductible Traditional IRA contribution for 2015. Keep in mind that the deadline for 2015 IRA contributions is April 18, 2016.
Check with your tax advisor regarding your specific situation.

For more information visit the IRA Contribution Limits and Deadlines page in the Fidelity retirement center: https://www.fidelity.com/retirement...

Ken

Important Information:
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
3 months, 3 weeks ago
by
AskKen
 

IRA ?'s

Hi, i have a 401K & investment accounts @ Fidelity. The past few years i've been able to contribute to a traditional IRA & then convert it to a Roth. I'd like to do that with Fidelity now & wanted to confirm i can do that? Also, another ? i have is do i have to contributed all $5,500 at one time or could i do it in installments of $1,100 (5 times) and then convert it after the 5th contribution to the Roth?
Hi Kabrina,

Thanks for your questions. Yes, you can make a contribution to a Traditional IRA at Fidelity and then convert it to a Roth IRA at any time. You do want to note, however, that if your Traditional IRA assets include pre-tax, tax-deductible contributions, or earnings on those contributions, there will likely be tax consequences on the conversion.

To answer your second question, yes, you can make contributions in installments either manually or as part of an automatic contribution plan. You can then either convert the contributions separately or wait until you have hit the IRS maximum of $5,500, but again, if there are earnings between the time you make the contributions and the time you convert them, you will owe taxes on the earnings.

I hope this information is helpful.

Ken
3 months, 3 weeks ago
by
AskKen
 

Can a retired spouse have a roth ira?

Wife still works, husband is retired. Is this the same as a spousal IRA, where the spouse is a homemaker?
Thanks for your question. Yes, a retired person, or any non-working spouse, can make contributions to an IRA based on the income of their working spouse. This is great outside-the-box thinking to help you reach your retirement savings goals. To qualify for a Spousal IRA, keep in mind that you have to be married, and your tax filing status must be “married filing jointly.” The IRA will not be a joint account, however; it will be opened based on your Social Security number, and the funds contributed become yours. A Spousal IRA is a great way for married couples to double up on retirement savings.

Ken
3 months, 3 weeks ago
by
AskKen