Lost Opportunities Can Make a Lifestyle Difference in Retirement

Omissions in retirement planning are bad enough, but some of them are “layups.” Here are four slam dunks worth mentioning:

Lifetime IRA Rollover to an HSA Account
This provision allows for a once-in-a-lifetime distribution of amounts from an traditional IRA, in a direct trustee-to-trustee transfer. The maximum amount that may be distributed from the IRA and contributed to the HSA is limited to $3,350 for individuals and $6,750 for families. Individuals ages 55 and older can contribute an extra $1,000 under the catch-up provision. The original IRA was tax deductible, the transfer is tax-free and the withdrawal from the HSA account for qualified medical expenses is tax-free.
IRA Contributions for Non-Working Spouse
A non-working spouse doesn’t generate income. Nevertheless, a non-working spouse can contribute up to $5,500 to an IRA, $6,500 if over age 50 under the catch-up provision. That’s a tax deduction with no direct income.

Roth Contributions for Working Kids
If a child under 18 has earned income, their guardians could contribute to a Roth IRA on their behalf up to the Roth IRA threshold currently $5,500. There are rules to comply with, but they are similar to traditional Roth IRAs. This is a great opportunity to jump start a child’s retirement.

Abandoned Retirement Monies
Every W2 worker should reconstruct his or her entire work history as part of his or her retirement plan. It is estimated up to one trillion dollars may be sitting in their former employer’s defined contribution plan. It is a shocking revelation to discover forgotten retirement monies in 401(k)s that were not rolled over to IRAs and inadvertently abandoned.