It’s hard to believe that calendar year 2018 is almost over and soon it will be 2019. Year-end can be a hectic time with work deadlines and holiday hassles. But you can start the new year confident that your IRA accounts are in order by taking a few steps today. Investing a few minutes of your time now can help ensure that you and your beneficiaries don’t end up with unwanted taxes or administrative problems in the years to come.
1. Watch for your fourth quarter 2018 account statement. STRATA Trust will be issuing fourth quarter 2018 account statements during the last week of January 2019.
2. Review your address and contact information. Log in to your STRATA Trust account online to view the address and contact information shown on your account statement. Check this information on your statement to make certain you continue receiving tax forms and account statements timely. Even if you haven’t moved recently, you may have eliminated your landline or changed your email address this year. To update your contact information with STRATA, please complete and submit our Address Change Request form, available at https://www.stratatrust.com/resource-center/forms/.
3. Review your beneficiary designations. If you have properly designated a beneficiary for your IRA, legal rights to the assets will be automatically transferred to your beneficiary upon your death—outside of probate. By ensuring you have the correct spelling and up-to-date contact information for your beneficiaries, you safeguard against future problems for your heirs. Not only can a “defective” beneficiary designation be administratively burdensome, it can be costly for your estate and your beneficiaries to resolve the conflict. You may also want to reconsider your beneficiary designations if circumstances changed this year, such as a divorce or the birth of a child.
4. Review your IRA contributions year to date. You can contribute up to the lesser of 100% of your income or $5,500 to your Traditional and Roth IRAs for 2018 ($6,500 if you’re age 50 or older). If you haven’t yet maxed out your contributions, you may want to consider doing so now. If you aren’t yet sure of your 2018 income, you can make IRA contributions for 2018 up until your tax return due date (generally April 15, 2019).
5. Make sure you’ve taken your RMD, if required. When you reach age 70½, the IRA tax rules require you to start taking a required minimum distribution (RMD) from your Traditional IRA (and SEP and SIMPLE IRAs) each year. After your first year’s RMD, you must take each year’s payment by December 31. If you are a beneficiary taking life expectancy payments from an inherited IRA, you also must take a minimum payment by December 31 each year. The IRS assesses a 50% excise tax on the amount of required distributions that are not taken by the deadline.
6. Protect your online account security. Now is also a good time to change your online account password. The IRS recommends creating unique passwords for all accounts and cautions against reusing passwords. For example, changing Bgood!18 to Bgood!19 is not good enough.
7. Roll over former employer plan balances that have been left behind. You can use your IRA to consolidate your retirement savings, improve your investment allocations, and reduce duplicative account administration fees. If you are retired or have changed jobs, you can roll over your retirement savings from your former employers’ plans (401(k), profit sharing, 403(b), and governmental 457(b) plan) into your self-directed IRA. Rollovers are tax-free and do not affect the amount you are eligible to contribute to an IRA for the year.
8. Review your investments. Is your IRA meeting your investment objectives? One of the benefits of a self-directed IRA is the freedom to invest your IRA assets in a wide array of alternative investments, such as real estate, precious metals, and private equity opportunities. These types of investments can help you achieve multiple investment objectives, including earning rental and business income.
Enjoy your new year knowing your IRA account is in order. If you have any questions about your account, please contact us at 866-928-9394 or Service@StrataTrust.com.