Every time we're confronted with a crisis, I'm reminded that the majority of our fellow citizens must rely on their retirement savings (if any) and their Social Security annuity for an adequate old-age income stream.

This is a daunting task that most fail miserably. They fail because participation in their employer savings plan is voluntary. They should make believe that their participation is mandatory and contribute the maximum amount allowed by law. Should they not have an employer savings plan, they should contribute the maximum allowed to a no-load (no-commission) Roth IRA.

With that said, participants in a state- or city-sponsored defined-benefit pension system should also make-believe that they, too, are part of the majority of citizens who are not accruing a future pension and, therefore, have no choice but to maximize their contribution to their favorite Roth retirement savings program (403(b), 457(b), 401(k) and IRA). Are you contributing the maximum to your Roth accounts?

Tips:

  1. A non-spouse beneficiary of an inherited IRA may not use the 60-day rollover method to transfer money to another IRA. Once completed, such transactions cannot be reversed, and taxes are due on the amount rolled over.

That being said, a non-spouse beneficiary of an inherited IRA must use the direct rollover/transfer method when rolling over funds from the inherited IRA to another IRA. This means the individual does not receive the rollover check. The distribution check is made payable and sent directly to the successor custodian for the individual's benefit. Should you receive the check, made payable to you, return it immediately and request that the custodian effectuate a direct rollover/transfer to the successor custodian.

  1. Let's assume you maintain a balance of 50 days in your Cumulative Absence Reserve. Notify your disability-income provider that you want your disability income to begin on the 51st day of disability. This will reduce your premium.

Mr. Frank is a fee-only Retirement Financial Planner and a retired city high school Teacher of Accounting. He can be reached by phone at (732) 536-9472, or via email at rollover@optonline.net.


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