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Ask Fidelity

We know saving for retirement is a top priority for many investors. No matter where you are in the planning process, you may have questions. We can help. Check out the questions we've already answered, or if you're a Fidelity customer, submit your own. We'll post replies to selected questions on a weekly basis.

Ken and Sarah answer your questions

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For more than 60 years, through all kinds of market conditions, Fidelity has been helping people like you pursue their financial goals. Ken Hevert and Sarah Walsh, who lead our Ask Fidelity team, have spent decades helping investors understand retirement strategies. They can help put Fidelity’s expertise to work for you.

Learn more about Ken and Sarah.

(651 Questions : 650 Answers)

Q&A for Answers to Customer Retirement Questions Category

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Answers to Customer Retirement Questions

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Open and Contribute to IRAs
 
1 answer

Transfer from a UK SIPP

Q: 
I have a UK Self Invested Pension Plan - it is currently invested in mostly equities - UK and foreign. Is there a way to roll this over into a Qualifying Recognised Overseas Pension Scheme (QROPS) within Fidelity. Does a 401(k) qualify as a QROP and if so what do I need to do in order to roll over the funds.
Age: 45 to 54
1 week, 6 days ago
by
 - Charlotte, NC, USA
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A: 
Thank you for contacting us regarding your UK Self Invested Personal Pension. Based on current U.S. tax law and applicable IRS rules, a retirement or pension plan from a foreign country cannot be rolled into an IRA or qualified retirement plan.

The Chief Counsel of the IRS offered a memorandum on this topic in 2008 concluding that a distribution from a UK pension scheme is not a qualified rollover distribution under Internal Revenue Code Section 402(c)(4). As a result, Fidelity has since disallowed rollovers to a U.S. IRA or qualified retirement plan like a 401(k) of which Fidelity is custodian.

Thank you again for your question. I hope that this information can serve to help you narrow down what might be a more acceptable option for your foreign retirement savings.

Ken
5 days ago
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Q: 
My wife will reach 62 this year and is a year older than me. I will not retire until I am 66. May my wife draw on herself at 62 and then draw on me under a spousal benefit once I turn 66 and file for benefits. Is this a good strategy?
Age: 55 to 64
2 weeks, 3 days ago
by
 - Mississippi, USA
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A: 
Thank you for your question on Social Security benefits. For many people, income from Social Security is a significant part of their retirement plan, and the timing of taking these benefits is an important decision.

Yes, your wife can start her own benefit at age 62. Since you have not yet filed, she will not be obligated to take the spousal benefit when she starts collecting her own benefits. Once you start your benefit, she can add spousal excess benefits to her own benefit.

Keep in mind, however, that if she begins collecting Social Security at 62, her benefit amount will be permanently reduced. Even if she waits till she is 66 or older to start the spousal portion, her total monthly benefit will be lower due to starting her portion early. Delaying benefits will increase your benefit amount by about 8% each year up to the age of 70, but the question of whether this is a good strategy for you depends on your overall financial situation and goals. Fidelity can help you determine that with an evaluation of your total financial picture. Call us at 800-343-3548 and speak with one of our retirement representatives.

I hope this is helpful.

Ken
5 days ago
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Other Topics
 
1 answer

What is a SEPP

by
 - Sacramento, CA, USA
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Q: 
How do I start a SEPP?
I'm a General Contractor and am looking to set up my retirement.
Age: 45 to 54
3 weeks ago
by
 - Sacramento, CA, USA
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A: 
Thanks for inquiring about opening a SEP IRA. A SEP IRA is a great way for self-employed individuals to take advantage of tax-deferred savings for retirement.

You will need to complete IRS Form 5305-SEP in order to establish your SEP IRA. This form should be kept in your permanent records as proof of establishing the plan. All of the necessary forms and answers to any additional questions can be found on Fidelity.com at https://www.fidelity.com/retirement...

If you have further questions, you can speak with one of our retirement specialists at 800-544-5373, Option 3. We also suggest that you consult with your tax advisor.

Ken
5 days ago
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Other Topics
 
1 answer

When to draw Social Security

by
 - Arlington, TX, USA
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Q: 
I am turning 66 in July and my wife is 63. We have adequate savings to draw on without relying on Social Security. Should we start drawing now or wait. I heard that I could suspend my drawing and draw 1/2 of my wife's benefit now and then draw my full at 70. Don't know if that's correct but any ideas appreciated/
Age: 65 or over
4 weeks, 1 day ago
by
 - Arlington, TX, USA
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A: 
Thanks for your question about when to begin drawing on Social Security benefits. Generally, it’s wise to delay benefits as long as possible, since your benefit amount between ages 66–70 will increase by about 8% a year. But you’ll want to consider other factors such as the Full Retirement Age (FRA) benefit amounts for both you and your wife, and how long each of you expect to live. These will also impact your decision of when to file and ultimately the cumulative amount you can receive from Social Security.

Coordinating spousal benefits is one of the most complicated areas of Social Security planning. In the scenario you provided, if your wife were to file and you’ve reached FRA of 66, then you’d be able to elect to only receive the spousal benefit, allowing your own benefit amount to earn delayed retirement credits till age 70. You’d be eligible for 50% of the spousal benefit if you’ve reached FRA.

This strategy is one that you can use but may not provide the highest amount of cumulative lifetime income. We’d recommend working with one of our consultants who can review your situation in more detail and help you consider other potential strategies.

I’ve also provided a link to a Fidelity Viewpoints® article that covers this strategy and others in more detail: https://www.fidelity.com/viewpoints...

I hope this is helpful.

Ken
2 weeks, 1 day ago
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Q: 
I am 70 1/2 age.
Age: 65 or over
1 month ago
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A: 
Hi Nancy. Thank you for the question on minimum required distributions (MRDs) from your IRA.

There isn’t a fixed percentage for your MRDs. The percentage varies each year since the MRD is calculated using a life expectancy factor based on your age. Generally, your MRD is calculated by dividing the value of your IRA as of December 31 of the prior year by a life expectancy factor taken from the IRS’s Uniform Life Expectancy Table.

One other thing, if the sole beneficiary on your IRA is your spouse and your spouse is more than 10 years younger than you, you may be eligible to use the Spousal Exception Joint Life Expectancy table instead. This would mean a smaller MRD than one based on the Uniform Life Expectancy Table. You can find additional answers to questions about MRDs on this page: https://www.fidelity.com/retirement...

If you would like Fidelity to figure your MRD for you, this can be done through our Retirement Distribution Center available at Fidelity.com/RDC. Your estimated MRD will be calculated each year for your accounts. You simply need to validate that the year-end balance, your date of birth, and the beneficiary information on file is still accurate in order to confirm that your MRD estimate is correct. You can visit the RDC to track your MRD and your year-to-date distributions to meet that MRD.

Please contact us if you have additional questions about your MRD. The 50% penalty for missed MRDs is severe, so we want to make sure you have a plan in place. To help ensure you do not miss an MRD, you can also enroll in automatic withdrawals to handle your MRDs. Information on this can be found here: https://www.fidelity.com/cash-manag...

I hope this is helpful.

Ken
4 weeks ago
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