Retirement Plans: Rapid Fire

What this video covers

• The tax treatment difference between traditional individual retirement accounts (IRAs) and Roth IRAs: when each gives a deduction, when each creates taxable income, and why Roth contributions come out before earnings
• Why anyone at any income level can execute a backdoor Roth conversion even when direct Roth contributions are barred, and how that converted amount is taxed
• How defined benefit plans and defined contribution plans split investment risk between employer and employee, and which one carries Pension Benefit Guaranty Corporation (PBGC) insurance
• The SEP IRA versus SIMPLE IRA distinction: employer-only funding with no catch-up for SEP, dual contributions with a brutal 25% first-two-years penalty for SIMPLE
• Why 457(b) plans impose zero early-withdrawal penalty at any age, and how that makes them the only unicorn in the retirement-plan penalty zoo
• The mechanics of a 60-day indirect rollover from an employer plan: the 20% mandatory federal withholding trap, the 100% deposit requirement, and why direct trustee-to-trustee transfers avoid the headache entirely
• Why required minimum distributions (RMDs) can never be rolled over by any method, and how delaying the first RMD to April 1 creates two taxable distributions in one year