12/08/20 – Winning with Annalee Presented by Mainstay Financial Group – Annalee Leonard & Bob Beargy

Pensacola Expert Panel
Pensacola Expert Panel
12/08/20 - Winning with Annalee Presented by Mainstay Financial Group - Annalee Leonard & Bob Beargy

In this episode of Winning with Annalee Leonard presented by Mainstay Financial Group, Annalee Leonard and Bob Beargy join the show to pick up where we left off last week with required minimum distributions (RMDs) but first remind us of the importance of having a good personality fit with your financial advisor.

To recap: The Secure Act passed in December of 2019 and involved two key components: The age for mandatory distributions from IRAs changed from 70 to 72 years. The stretch IRA, for the most part, was eliminated: For children, specifically non-spouse beneficiaries, will be required to empty the IRA they inherited within 10 years.

The tables have been revised though not revised in time to become effective in 2021; they will become effective in 2022. For 2020, 2021, and 2022, you will be using different RMD guidelines.

Conversation and contribution are very different things. Contribution occurs when you have income and direct it into your IRA. If you’re over the age of 50, you can contribute $7,000 per year to your traditional or Roth IRA. You have up until tax time (April 2021) to contribute for this year. Conversion occurs when you take part of your established IRA and convert it – there is no limit to how much you can convert nor how many times throughout the year you can convert. Conversions for this year must be completed by December 31, 2020.

Bob talks us through the history of the Roth IRA, and Annalee reminds us that this is the season of giving but that doesn’t mean it should be the season of overspending. Her advice: Look for the meaningful gifts that say, “I love you” not necessarily the expensive ones.

Bob and Annalee also answer a listener question about the appropriate amount to convert from traditional to Roth IRA to avoid moving to the next income bracket for Medicare purposes. Tune in to learn their thoughts!

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