In David Royer’s excellent book… Title: Top Ten IRA Mistakes and How to Avoid IRS Tax Traps , he gives you a list of mistakes people make concerning their IRAs: 1. 1. Forgetting to take the RMD. 2. Not taking advantage of the “Stretch Option” (No More Stretch. The government has killed this.)
3. Not properly designating beneficiaries. 4. Not establishing separate accounts. 5. Not knowing where their beneficiary form(s) are located.
6. Overpaying fees and loads & too much risk. 7. Not taking advantage of Tax Savings Strategies. 8. Too many retirement accounts lead to confusion. 9. Not Rolling 401(k) or 403(b) plans to a Self-Directed IRA. 10. Not getting a second opinion. This could be hazardous to your financial security. Also, in Dave’s book… He shares the eight great reasons not to have an IRA in a brokerage account: 1. Fees and Loads – the High Cost of Small Hidden Fees 2. Market Fluctuations – Very Dangerous and No Guarantees 3. Lack of Expertise – Bad or Wrong Advice – Use an Advisor that is familiar with the IRS Publication 590 – I have found that most CPAs aren’t familiar with the 590 Publication, Tax rule 56/10, 127/12 or 233/22. 4. Poor Documentation – Beneficiaries Lose Money 5. Poor Defaults – Who is Responsible? 6. Separate Accounts 7. Restriction of Beneficiaries – Living Trust (Beware)
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