Sean Mullaney's Blog, page 7

A Critical Look at the 529

Thanks to the SECURE 2.0 bill, it’s time for the FI community to reexamine 529 plans. This post shares my two cents on 529s in general, and specifically as applied to the FI community. The next post, dropping February 15, 2023, addresses in detail the new 529-to-Roth IRA rollover enacted in SECURE 2.0. Financial Independence […]

Health Savings Accounts and Las Vegas

Want to make a bad financial decision? I’ve got an account that can help you do that tax and penalty free! Of course, I do not recommend making bad financial decisions. However, at times it is useful to look at extremes to help us better understand and analyze financial planning alternatives.  Health Savings Accounts If […]

Emergency Access to Retirement Accounts

The newly passed SECURE Act 2.0 has put a renewed focus on the use of retirement funds to cover pre-retirement emergencies. This post discusses the options available with respect to using tax-advantaged retirement accounts to fund emergency expenses. To my mind, there are five primary ways to use retirement funds to pay for emergencies. Considering […]

SECURE 2.0 and the FI Community

Congress just passed a very long retirement tax bill, colloquially referred to as SECURE 2.0 or the SECURE Act 2.0. The FI community is interested in anything affecting tax-advantaged retirement accounts. This post dives in on the impact of SECURE 2.0 on the FI community.  SECURE 2.0 Big Picture SECURE 2.0 tinkers. It contains dozens […]

SECURE 2.0 Resources

Early in the morning on December 20th, Congress released the 4,155 page omnibus bill. It includes, starting at page 2046, a revised version of SECURE 2.0. Here is the bill text. Where We Stand As of December 21, 2022, 12:11PM PST: The bill has not yet passed. It is likely to pass both houses and […]

2023 RMDs and Roth Conversions

As I write this, we’re nearing the beginning of 2023. The stock and bond markets are down over the past year. For 2023, that means two things: Some retirees may think that they will have lower taxable income in 2023 (due to reduced RMDs). It might occur to them to wake up on New Year’s […]

2023 Solo 401(k) Update

There are some new developments in the world of the Solo 401(k). Here are the highlights: New Solo 401(k) Employee Contributions Limit for 2023 The IRS announced that for 2023, the employee deferral limit for all 401(k)s, including Solo 401(k)s, will be $22,500.  New Solo 401(k) Catch-Up Contributions Limit for 2023 The IRS also announced […]

2023 Retirement Tax Reform

An Open Letter to the Members of the 118th Congress Dear Senators and Congressmen, Congratulations on your victories in the Senate and House elections. I write with respect to one aspect of your legislative endeavors in the 118th Congress: reforming our tax-advantaged retirement savings system. As you will see, much of it is antiquated and […]

2022 Year-End Tax Planning

Below are the main tax planning items for the year 2022 as I see them. Of course, this is educational information for the reader, and not tax advice directed toward any particular individual.  The first two tax loss harvesting items are particularly unique to 2022 vis-a-vis recent years.  Tax Loss Harvesting 2022 has given us […]

The MAGI Limitation on Roth IRA Contributions

During a recent Econome Encore presentation, a questioner asked a question that caused me to do a double take: Do Roth conversions create MAGI (modified adjusted gross income) for purposes of determining whether someone exceeds the MAGI thresholds to make an annual contribution to a Roth IRA? I did a double take for several reasons. […]