David Royer, Financial Advisor, and Educator, Interviewed on the Influential Entrepreneurs Podcast

David Royer discusses common IRA Tax Traps that can be avoided with the help of a trained professional to prevent costly and irreversible mistakes. 

Listen to the interview on the Business Innovators Radio Network: 

https://businessinnovatorsradio.com/interview-with-david-royer-financial-advisor-and-educator/

Avoiding certain common IRA tax traps is essential to ensure retirement savings are preserved. Here are just some of the many mistakes that should be avoided:

  1. Not taking required minimum distributions (RMDs) – RMDs are mandatory withdrawals from traditional IRAs and must begin after age 73. Failing to withdraw the correct amount or not withdrawing at all will result in a 25% penalty on the amount that should have been withdrawn.
  2. Excessive contributions – There is a yearly maximum for contributions to an individual’s IRA based on age and income level. Contributing more than these limits may result in “excess contribution” penalty of 6%.
  3. Early withdrawals – Early withdrawals or taking funds out of an IRA before age 59 and a half can result in large tax penalties. The 10% penalty does not apply to certain exceptions, such as first-time home purchases and medical expenses.
  4. Failing to report Roth conversions – Converting money from a traditional IRA to a Roth IRA is usually done for tax purposes. However, if a Roth conversion is completed without properly reporting it to the IRS, the converted funds will be subject to income tax and may trigger a 10% penalty.
  5. Mixing retirement accounts – Transferring funds between different types of IRAs (traditional and Roth) can lead to IRS confusion about which account should be taxed upon withdrawal. If the funds are not properly reported, they may be subject to additional taxes and penalties.
  6. Not rolling 401k and other company plans to an IRA after retirement. There are several good reasons to contribute to 401k, 403b, TSP, and other sponsored plans. People can tax deduct their deposits and, in most cases, receive company matching funds. After they retire or have a change in service, the company matching funds are gone for good. That would be a good time to consider transferring the plan funds to a more flexible IRA. They can also eliminate the fees associated with the employer-sponsored plans.
  7. Not knowing the new IRA rollover rules could result in immediate taxation. An indirect rollover occurs when the IRA owner receives a check from the current custodian and redeposits their personal check with the new custodian within the sixty-day limit. This can only be done one time in any twelve-month period. If an IRA owner does more than one “indirect” rollover in a twelve-month period, all other “indirect rollovers” within that twelve-month period will be fully taxable. Most account owners should consider making a direct transfer from the current custodian to the new custodian of their choosing. People can do as many direct transfers as they like without worrying about unnecessary taxes.

David explained: “By educating yourself on common IRA tax traps and taking the necessary steps to avoid them, you can protect your retirement savings from costly mistakes. Taking the time to understand the rules and regulations of IRAs can help ensure that your hard-earned money remains safe and secure for years to come.”

About David Royer

David F. Royer entered the financial services industry after completing his military obligation. He began studying the growing IRA Distribution market in 2002 and today he is a nationally recognized speaker and trainer in qualified plan distribution. He has trained thousands of financial advisors and agents in the discipline of qualified retirement plan accumulation and distribution. David’s many articles on IRAs, 401(k)s and other qualified retirement plans have been published in leading national financial periodicals. He is a frequent guest on financial radio shows and is also the author of “The Top 10 IRA Mistakes and How to Avoid IRA Tax Traps.”

Today he is focused on helping those who are retired or planning for retirement, to keep their retirement accounts safe and make them aware of ever-changing rules that could affect their retirement savings.

In 2004 David developed the ultimate IRA distribution training course “The Keys to the IRA Kingdom” ®, that he teaches nationally. He educates financial advisors and agents in the art of helping their clients get the most out of their IRAs, 401(k) plans and other qualified retirement accounts. David teaches a simple lesson:

 “The IRS has given IRA/401(k) owners and their beneficiaries complex rules and guidelines that must be followed to avoid additional taxes and penalties. “They just need a little help to navigate them.”

 Learn more: https://americannetworkoffinancialeducation.org/

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