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

Here at Asset Preservation Capital, LTD, 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 call.

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

Asset Preservation Capital, LTD
(248) 649-4759

By Andy Ives, CFP®, AIF®
IRA Analyst

 

When presenting a particular section of our training manual, I usually make the joke that, “if we were playing an acronym drinking game, we would all be on our way to a hangover.” The segment is titled: “Missed stretch IRA RMD by an EDB, when the IRA owner dies before the RBD.” This part of the manual discusses the automatic waiver of the missed RMD penalty in a certain situation, and the acronym soup is borderline comical. So that everyone knows which end is up, here is a spiked punch bowl of common retirement-account-related acronyms.

IRA: Individual retirement arrangement. (Not “account!”)

RMD: Required minimum distribution. Minimum amount that must be withdrawn from a retirement account each year after reaching a certain age.

RBD: Required beginning date (for starting RMDs). Generally, April 1 of the year after the year a person turns 73.

QLAC: Qualifying longevity annuity contract. An annuity whose value (up to $200,000) can be excluded from an IRA owner’s balance for RMD calculation purposes.

EDB: Eligible designated beneficiary. Category of beneficiary who may take stretch RMDs.

NEDB: Non eligible designated beneficiary. Category of beneficiary who gets the 10-year rule.

NDB: Non designated beneficiary. Category of beneficiary that includes “non-people,” like an estate or charity. Payout rules applicable to NEDBs are the 5-year rule or “ghost rule.”

ALAR: At least as rapidly. The rule dictating that when RMDs have begun, they must be continued by the beneficiary. ALAR is a function of frequency, not amount.

QCD: Qualified charitable distribution. A distribution from an IRA to a qualified charity, subject to an age requirement of 70 ½ or older.

CWA: Contemporaneous written acknowledgement. This is just a receipt for your QCD!

CGA: Charitable gift annuity. A one-time QCD of $53,000 (for 2024) can go to an entity like a CGA, CRAT (charitable remainder annuity trust), or CRUT (charitable remainder unitrust).

DAF: Donor advised fund. A QCD cannot be made to a DAF.

NUA: Net unrealized appreciation. Tax strategy used to pay long term capital gains on the appreciation of company stock. (Be sure to know all the NUA rules before proceeding.)

NIA: Net income attributable. The gain or loss on an excess IRA contribution.

QDRO: Qualified domestic relations order. Used to split a retirement plan after divorce.

SECURE Act: Setting Every Community Up for Retirement Enhancement Act.

I feel dizzy. Maybe I should go lie down and sleep it off.

https://irahelp.com/slottreport/ira-acronyms/