A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Fortress Financial, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Fortress Financial
208-233-1685

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QUALIFIED CHARITABLE DISTRIBUTIONS (QCDS) AND SOLO 401(K) PLANS: TODAY’S SLOTT REPORT MAILBAG

By Ian Berger, JD
IRA Analyst
Follow Us on X: 
@theslottreport

 

Question:

Can a QCD (qualified charitable distribution) be made from a 401(k) plan?

Thanks!

Answer:

No, QCDs can only be made from IRAs and inactive SEP or SIMPLE IRAs. One possible workaround would be for you to roll over all or a portion of your 401(k) funds into an IRA and then do a QCD from the IRA.

Question:

We have a client who is self-employed. He has a 401(k) plan for himself and his wife. Is this 401(k) protected under ERISA from creditors?

Answer:

A solo 401(k) plan where just the business owner and spouse participate is not an ERISA plan, so it does not have ERISA protection against non-bankruptcy creditors. The plan would only have whatever creditor protection is available under state law. (The federal Bankruptcy Code does protect solo plan accounts in bankruptcy.) Hiring additional employees would turn the solo plan into an ERISA plan with ERISA creditor protection. But having an ERISA plan would also introduce new administrative requirements.

https://irahelp.com/slottreport/qualified-charitable-distributions-qcds-and-solo-401k-plans-todays-slott-report-mailbag/

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