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The Potter Law Firm

North Carolina and Kentucky Estate Planning Attorneys

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KY (606) 324-5516
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Home » Resources » Frequently asked questions » IRA & Retirement Planning

IRA & Retirement Planning

    • When do you qualify for Medicare and Social Security?

    • In order to be eligible for these programs, you have to accumulate at least 40 retirement credits while you are working and paying taxes. This is easily done, because you get the maximum four credits each year even if you work part-time. You would also be eligible if your spouse meets this requirement. 

      The age of Medicare eligibility is simple and straightforward. Unless the laws are changed in the future, you can enroll in the Medicare program when you are 65 years old. The situation is much more complicated when it comes to Social Security eligibility. 

      The full retirement age is 66 for people that were born between 1943 and 1954. There is then a two month per birth year graduation, so someone that was born in 1955 would become eligible two months after their 66th birthday. This arrangement continues until 1960; people born during this year and after become eligible at the age of 67. 

      It is possible to accept a reduced benefit when you are as young as 62. That may sound enticing, but the reduction would be between 25 percent and 30 percent, so it is significant. 

      You can go in the other direction and earn delayed retirement credits if you do not apply when you are eligible for your full benefit. If you do this, your benefit would go up by 8 percent for every year that you delay until you are 70 years old. 

    • What are the distinctions between Roth individual retirement accounts and traditional IRAs?

    • The way that the accounts are taxed is different, and this is the primary divergence. You make contributions into a traditional individual retirement account before you pay taxes on the income, and the reverse is true with a Roth IRA.

      When you take money out of a traditional account, the distributions are looked upon as taxable income since you did not pay taxes on the contributions. You are not required to pay taxes on distributions that you take from a Roth account.

      There are no mandatory distributions with a Roth account at any time, but you have to start taking mandatory minimum distributions from a traditional account when you are 72 years old.

      Before the enactment of the SECURE Act at the end of 2019, the age for mandatory distributions from traditional IRAs was 70.5. Another change makes it possible for traditional IRA account holders to continue to contribute into the account on an open-ended basis.

      Previously, contributions into traditional individual retirement accounts had to stop when account holders reached the age of 70.5. Roth account holders have always been able to contribute into their accounts without any age limitations, and this has not changed.

    • What are the rules for beneficiaries?

    • When it comes to taxes on the distributions, they are the same. The beneficiary of a Roth account would not have to pay taxes, but distributions to a traditional account beneficiary would be looked upon as taxable income by the IRS.

      There is a huge change within the SECURE Act that eliminates the estate planning strategy called the “stretch IRA.” Under the old parameters, a non-spouse beneficiary was required to take mandatory minimum distributions, but they could be spread out based on the beneficiary’s life expectancy. Now, there is no minimum amount that must be withdrawn annually, but there is a 10 year rule in place. Beneficiaries have 10 years after the death of the original account holder to distribute all assets in either type of account.

We Are Here to Help! 

If you have any questions about individual retirement accounts or any other elder law or estate planning matter, we would be glad to answer them for you in person. You can schedule a consultation at our office in North Carolina if you give us a call at 704-944-3245. 

Our Kentucky location can be reached at 606-324-5516 (Ashland, KY) or 859-372-6655 (Florence, KY), and there is a contact form on this website that you can use to send us a message. 

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Testimonials

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

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Where We Are

Ashland

ASHLAND
1620 Carter Avenue
Ashland, KY 41101-7631
Phone: (606) 324-5516
Fax: (606) 324-4766

Charlotte

CHARLOTTE
15720 Brixham Hill Avenue
Suite 300,
Charlotte, NC 28277
Phone: (704) 944-3245

Huntersville

HUNTERSVILLE
11330 Vanstory Drive
Huntersville, NC 28078
Phone: (704) 944-3245

Northern Kentucky

NORTHERN KENTUCKY
7310 Turfway Road
Suite 550,
Florence, KY 41042
Phone: (859) 372-6655

Office Hours

Monday8:30 AM - 4:30 PM
Tuesday8:30 AM - 4:30 PM
Wednesday8:30 AM - 4:30 PM
Thursday8:30 AM - 4:30 PM
Friday8:30 AM - 3:00 PM

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