Q: If I use the Roth backdoor technique when I'm less than 59 years old, do I have to pay a 10% penalty on the converted amount?
A: Great question! No, there is no penalty to convert as you aren't taking a distribution. To maximize the conversion, use outside assets to pay whatever tax may be due. If you take taxes from the traditional IRA, you may water down the effectiveness dramatically. It should be noted that if you withdraw funds from the converted Roth IRA within 5 years of the conversion, the 10% penalty will apply. There are no exceptions to this. Good luck!
Q: I just received a letter of reconsideration and my son was denied SSI. He has severe ADHD and is on medication.
A: Very sorry to hear families have to jump through so many hoops to get much needed help. Unfortunately, the reason why someone is denied is harder to ascertain. If this is your first attempt to get benefits, getting denied is very common. I would strongly suggest you appeal the decision immediately. You may also have to get an attorney to assist at some point. Often benefits will eventually be approved if cause is proven and justified and made retroactive so there is hope if you accept that this will be a longer process than anticipated. Here is more information that may help:http://www.disabilitysecrets.com/adhd-attention-deficit-social-security-disability.html
Good luck and don't give up!
Q: Can I receive my deceased mother's pension?
My mother just passed away at age 69. She was supposed to receive her pension starting at age 70 1/2. The company says it is only allowed to go to a surviving spouse (which there is none) and that I have no claim to her pension. That's not what my mother understood. Days before she passed away, she mentioned to her best friend that should anything happen to her, to make sure I got her pension.
A: First very sorry for your loss. I will try to offer some helpful information but without knowing the whole story, it is difficult to surmise what may have happened here. If this is a true defined benefit pension plan, every company will have their own rules for how it pays out funds. I would first suggest getting a copy of the company’s retiree benefit package to review their policies and procedures.
Next, I would try to get a copy of Mom’s beneficiary designation form. I am assuming your Mom was retired and if so, she would have completed how she wanted to receive her pension. Some common choices include Life only, Joint, Lump sum, Period Certain. Typically, the choice you request will determine if you want more now or a lesser amount for various guaranteed periods.
It is not uncommon to have a retiree not understand the options and their implications or remember which one was chosen. I’m not saying that happened here but it is possible when lump sum is not chosen, for benefits to cease at the death of an employee or spouse. There is typically not a fall back of “everything goes to the kids” if no one is left to get a check. That is often the trade off when choosing these defined payout options.
If you are able to gather the documents I recommended, and feel you still have a case, you may want to research and perhaps reach out to the Pension Benefit Guaranty Corporation. http://www.pbgc.gov/home.html They are a government agency that protects the rights of workers and provides tons of useful information in knowing what is permitted.
I wish you luck
Roy Larsen is a Certified Financial Planner™ practitioner and Fee Only Wealth Manager who resides outside of Atlanta, Georgia.
Roy's Financial Blog contains articles on multiple financial life events as well as his favorite questions from he receives from around the country as a an expert panel member for Investopedia's Advisor Insights.