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Old 03-30-2019, 09:12 AM   #61
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Originally Posted by leeg View Post
Yup, I made this mistake. Cost me money on Roth conversions.
Trying to wrap my head around this. You need to take RMD’s from the aggregate of all your IRA’s and 401K’s so what if they are in different accounts. The basis stays the same overall.
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Old 03-30-2019, 09:18 AM   #62
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Originally Posted by arch57 View Post
I'm getting 3.7% in our Stable Value fund and it just checked Vanguard MM is at 2.5% so my 401K plan has always been about 1 to 1.5% higher and therefore I kept my funds there with most allocated to Stable Value fund. Then my DW IRA and 401K are weighted towards equities giving us a nice 60/40 ratio.
Same thoughts.
My Stable Value currently at a net of expenses 3.78% has always been greater than MM funds.
Represents 50% of my bond allocation.
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Old 03-31-2019, 05:56 AM   #63
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Originally Posted by gwraigty View Post
It should be easy enough to find out if your brokerage has any fees for IRAs via their website. Many don't.

The only major reason you might want to keep the 401k is for the lawsuit protection, if you're in a state that doesn't exempt all or enough of it. Here is something I've posted before that gives a state by state breakdown:

https://www.thetaxadviser.com/conten...teirachart.pdf
Question: what constitutes a creditor? I'm thinking of the case where you get sued for a slip and fall or a car accident and they don't take the insurance. Is the person suing you now a creditor? Are you 401K/IRA funds protected from this? Another way to ask the question is this: do I need a umbrella policy protecting all of my retirement accounts, or just my taxable accounts and other assets?
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Old 03-31-2019, 06:08 AM   #64
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If I had been able to roll my smallish IRA over to a Roth when I retired, and before I rolled over my 401K to another IRA, I would have been able to use the post-tax basis, getting rid of it and not have it lingering for all time with extra tax filings.

But Roth rollover was not an option for me way back then - not until 2010 - so no matter.
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Old 03-31-2019, 06:10 AM   #65
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Question: what constitutes a creditor? I'm thinking of the case where you get sued for a slip and fall or a car accident and they don't take the insurance. Is the person suing you now a creditor? Are you 401K/IRA funds protected from this? Another way to ask the question is this: do I need a umbrella policy protecting all of my retirement accounts, or just my taxable accounts and other assets?
I think the person suing would be a creditor only if they get a judgment against you. Your non-retirement/non-HSA assets (another benefit of HSAs that isn't normally mentioned) would only be at risk if the judgment exceeded your insurance limits. We have an umbrella policy to cover accounts/property that isn't legally exempt in our state. IRAs are fully exempt.
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Old 03-31-2019, 06:27 AM   #66
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from one of the links earlier.....................to me this sounds like a rollover IRA containing only formerly ERISA assets is protected for unlimited amounts under federal bankruptcy law. Does this mean you have to file successfully for bankruptcy in order to get that protection?
************************************************** *******

"So, how safe from creditors are your IRA and other retirement assets?

Federal law provides important protection for qualified retirement plans. Your qualified retirement plan is protected by the Employee Retirement Income Security Act of 1974 (ERISA) from claims by creditors.

This protection covers most employer plans, such as 401(k)s, defined benefit plans and others.

...........................................

.................................................. ......
For example, a 403(b) plan offered by a state or local government probably isn’t set up under ERISA, and doesn’t qualify for the federal protection.

IRAs also aren’t protected by ERISA, but they do have some protection under federal bankruptcy law.

A rollover IRA of any amount is protected from creditors under federal bankruptcy law.

That is, if you rolled over money from an employer plan such as a 401(k) to an IRA, the IRA is protected from creditors. This protection also applies to a SEP or Simple IRA.

A contributory IRA (that is, an IRA that isn’t a rollover IRA) also is protected from creditors under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Up to $1 million of IRAs are protected under federal bankruptcy law. The $1 million limit is indexed for inflation every three years, and currently is at $1,283,025.

But these federal protections for IRAs are available only in a federal bankruptcy action. You have to file for bankruptcy to protect the IRA."
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Old 03-31-2019, 08:34 AM   #67
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from one of the links earlier.....................to me this sounds like a rollover IRA containing only formerly ERISA assets is protected for unlimited amounts under federal bankruptcy law. Does this mean you have to file successfully for bankruptcy in order to get that protection?
There is a difference between the federal bankruptcy protection afforded 401k assets rolled over into an IRA/Roth IRA, and state law protection of the same assets, which may also cover bankruptcy as well as creditor protections w/o filing for bankruptcy.

I would say that, in general, you would have to file successfully for bankruptcy to be protected under federal law. However, if your state protects the assets from all creditors to the extent that your entire balance would be covered, or even unlimited as mine does, you don't have to file for bankruptcy.

IANAL, but I've researched my state law on this, as everyone should.
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Old 03-31-2019, 09:46 AM   #68
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I think the person suing would be a creditor only if they get a judgment against you. Your non-retirement/non-HSA assets (another benefit of HSAs that isn't normally mentioned) would only be at risk if the judgment exceeded your insurance limits. We have an umbrella policy to cover accounts/property that isn't legally exempt in our state. IRAs are fully exempt.
Thanks!
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Old 03-31-2019, 10:20 AM   #69
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Originally Posted by gwraigty View Post
There is a difference between the federal bankruptcy protection afforded 401k assets rolled over into an IRA/Roth IRA, and state law protection of the same assets, which may also cover bankruptcy as well as creditor protections w/o filing for bankruptcy.

I would say that, in general, you would have to file successfully for bankruptcy to be protected under federal law. However, if your state protects the assets from all creditors to the extent that your entire balance would be covered, or even unlimited as mine does, you don't have to file for bankruptcy.

IANAL, but I've researched my state law on this, as everyone should.
Thanks, that was my impression too about protection under federal law. Better under 401K than IRA. Not thinking about state law since mine (CA) provides very poor protection.
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Old 03-31-2019, 12:40 PM   #70
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Trying to wrap my head around this. You need to take RMD’s from the aggregate of all your IRA’s and 401K’s so what if they are in different accounts. The basis stays the same overall.

Yes, IRA RMD's are from the aggregate of all your deductible and nondeductible IRA's. 401K's have a separate 401K RMD. But, when doing Roth conversions, only the aggregate of all your deductible and nondeductible IRA's are used when determining what percentage of the conversion is taxable on form 8606. All money in 401K's are ignored for Roth conversions, so leaving fully taxable 401K monies or moving fully taxable rollover IRA monies to a 401K before doing conversions will simplify the process and increase the amount of conversion you can do at lower tax rates.
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Old 03-31-2019, 08:12 PM   #71
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I left mine at my employer because they allowed withdrawals before 59 1/2 . So I used it to bridge the gap between retirement and when I had access to my IRAs. When that wasn't needed I did roll it over to an IRA to simplify things.
Me too, I did this also.
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Old 03-31-2019, 08:20 PM   #72
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Yes, IRA RMD's are from the aggregate of all your deductible and nondeductible IRA's. 401K's have a separate 401K RMD. But, when doing Roth conversions, only the aggregate of all your deductible and nondeductible IRA's are used when determining what percentage of the conversion is taxable on form 8606. All money in 401K's are ignored for Roth conversions, so leaving fully taxable 401K monies or moving fully taxable rollover IRA monies to a 401K before doing conversions will simplify the process and increase the amount of conversion you can do at lower tax rates.
Very helpful, thank you.
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Old 04-03-2019, 02:01 PM   #73
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If your employer allows it.
Not all do

Yes, mine didn't, which was an unpleasant surprise.
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