Sean Mullaney's Blog, page 4

Revisiting Solo 401(k)s and the Rule of 55

On a recent episode of ChooseFI, I stated my then-held view that it is unlikely a distribution from a Solo 401(k) qualifies for the Rule of 55. My concern was this: once the Schedule C solopreneur retires, there does not appear to be an “employer” remaining in the picture to sponsor the Solo 401(k). If […]

Five Reasons to Avoid the 529

Happy National 529 College Savings Day! Let’s celebrate with five reasons to avoid 529s. Cart Before the Horse I’ve said it before and I’ll say it again: far too often new parents have relatives extolling the virtues of a 529 at the reception after the Baptism. Those relatives rarely step back and ask “how are […]

Accumulators Should Ignore the Conventional Wisdom

The conventional wisdom says to accumulators “Save through a Roth 401(k)! Don’t you dare contribute to traditional 401(k)s. Those things are infested with taxes!!!” Doubt that prioritizing Roth 401(k) contributions over traditional deductible 401(k) contributions is the conventional wisdom? Let’s hear from some very prominent personal finance commentators: These commentators have much bigger platforms than […]

Vanguard Exits the Solo 401(k) Business

Big news in the Solo 401(k) world! Vanguard is closing their Solo 401(k) and will exit the Solo 401(k) business in July. On April 19th I recorded a YouTube video with my initial reaction. On April 20th I posted a lengthy X thread and a LinkedIn post with additional thoughts. If you’re interested in the […]

Accessing Retirement Accounts Prior to Age 59 ½

One thing I like about the Financial Independence community is that members are not beholden to Conventional Wisdom. Many in the Establishment believe retirement is for 65 year olds (and some basically think it’s not for anyone).  My response: Oh, heck no!  Sure, some people have jobs they very much enjoy. If that’s the case, […]

Tax Basketing for a 72(t) Payment Plan

Some retiring in their 50s will need to use a 72(t) payment plan. This often involves establishing a “72(t) IRA” and a “non-72(t) IRA.” People wonder “how do you allocate your portfolio when you have a 72(t) payment plan?” Below we tackle 72(t) IRAs from a tax basketing perspective. Most investors in the financial independence […]

San Diego Tax Delay

It’s deja vu all over again – Yogi Berra Last year, most of California received several deadline delays when it came to 2022 tax returns, tax payments, and IRA and HSA contributions. Sure enough, San Diego County now has a deadline delay for their 2023 tax returns, tax payments, and IRA and HSA contributions. Hat […]

Tax Return Reporting for Net Unrealized Appreciation

By Sean Mullaney and Andrea MacDonald Net Unrealized Appreciation Planning Net unrealized appreciation is a tax planning opportunity that applies to the gain attributable to employer stock inside an employer retirement plan. Plans that can have employer stock in them include 401(k) plans and employee stock ownership plans (ESOPs). Growth in tax deferred retirement accounts […]

The Spousal IRA

Is earned income required to contribute to an individual retirement account (an “IRA”)? If you’re married, it may not be, thanks to the Spousal IRA.  The Spousal IRA is a great opportunity for families to build financial stability, and perhaps get a juicy tax deduction, even if only one of the spouses work outside of […]

SECURE 2.0 Comment Letter

SECURE 2.0, passed in December 2022, made dozens of changes to the rules governing tax-advantaged retirement accounts. When Congress passes a major tax law change, the IRS and Treasury issue regulations and other guidance regarding the change. Practitioners and taxpayers often provide the IRS and Treasury comment letters bringing issues and concerns to the government’s […]