David N. Waldrop, CFP

10/23/2026

⚠️ RMD Deadlines: Two Costly Mistakes to Avoid

When it comes to Required Minimum Distributions (RMDs), timing matters!

📅 Know Your Deadlines

The IRS generally gives you until April 1 of the year after you first become subject to RMDs to take your first distribution.

After that, your annual RMD deadline is December 31.

🚨 Watch Out for the Double-Distribution Trap!

Delaying your first RMD until the following year means taking TWO distributions in the same calendar year.

That additional taxable income could push you into a higher tax bracket and increase your Medicare premiums two years later through IRMAA.

💸 Miss Your RMD? The Penalties Can Be Costly.

Missing an RMD once carried a 50% penalty!

Thanks to SECURE 2.0, that penalty has been reduced to 25%, and potentially just 10% if you correct the mistake within the required correction window.

The bottom line? Understanding your RMD deadlines can help you avoid unnecessary taxes, higher Medicare premiums, and costly penalties.

📌 Stay tuned! We'll continue breaking down the RMD rules and planning opportunities that every retiree should understand.

10/16/2026

🎂 The IRS Has a Surprise for You!

The IRS loves it when you turn 73. But don't expect a gift or even a birthday card!

After decades of deferring taxes on retirement savings, the government says it's time to start paying up.

Three little letters explain why: RMD.

💰 Required Minimum Distributions (RMDs) are the minimum amounts the IRS requires you to withdraw annually from certain tax-deferred retirement accounts, including traditional IRAs, 401(k)s, and 403(b)s.

And to make matters more confusing, the age at which RMDs begin depends on when you were born!

📅 Born between 1951 and 1959? RMDs generally begin at age 73.

📅 Born in 1960 or later? RMDs generally begin at age 75.

The bottom line? You've enjoyed years of tax-deferred growth. Now the IRS wants its share.

📌 Stay tuned! We'll break down how RMDs work, when they begin, and what you need to know to avoid costly mistakes.

10/09/2026

Honored to support this great organization!

Big thank you to David N. Waldrop, CFP with Bridgeview Capital Advisors, Inc. for supporting our 25th Anniversary Buy A Day Charity Golf Tournament as our Cart Sponsor! We are very grateful for your support to help us raise funds for our local amazing nonprofits 🎉💚😊⛳

10/09/2026

The Backdoor Roth IRA: Watch Out for the Pro Rata Rule!

You want to contribute $7,500 to a Roth IRA, but your income exceeds the limit.

Instead, you make a $7,500 nondeductible IRA contribution, intending to convert it tax-free to a Roth IRA.

Here's the catch!

You already have $75,000 in a rollover IRA from an old 401(k).

The Pro Rata Rule requires you to consider ALL your non-Roth IRA balances when calculating taxes on the conversion.

Here's the math:

💰 Existing IRA: $75,000

💰 Nondeductible contribution: $7,500

💰 Total IRA balance: $82,500

Tax-free portion: 9.1%

Taxable portion: 90.9%

⚠️ The result? Approximately $6,818 of your $7,500 Roth conversion is taxable!

The takeaway: A backdoor Roth IRA isn't necessarily tax-free. Understanding the Pro Rata Rule before converting can help you avoid an unexpected tax bill.

10/02/2026

Backdoor Roth IRA Tax Trap

The Backdoor Roth IRA sounds simple. But there’s a catch: the Pro Rata Rule.

You can’t simply choose to convert only your after tax IRA dollars and avoid taxes on the rest.

Instead, the IRS looks at your Traditional, Rollover, SEP, and SIMPLE IRAs as one combined pool when determining how much of your Roth conversion is taxable.

It doesn’t matter which IRA the money actually comes from.

That means having other pre tax IRA balances can create an unexpected tax bill when using the Backdoor Roth IRA strategy.

Before doing a Backdoor Roth IRA, it’s important to understand what else you already have in your IRAs.

We’ll walk through the calculation details in our next post.

09/25/2026

The Backdoor Roth IRA Has a Catch

A backdoor Roth IRA is a strategy that allows high income earners to fund a Roth IRA even when their income is too high to contribute directly.

The strategy generally involves two steps:

1. Make a nondeductible contribution to a Traditional IRA.
2. Convert those funds to a Roth IRA.

While Roth IRA contributions are subject to income limits, Roth conversions are not. This creates a “backdoor” for getting money into a Roth IRA.

It sounds simple, but there is an important catch.

If you already have money in a Traditional, Rollover, SEP, or SIMPLE IRA, the Pro Rata Rule can make part of the conversion taxable.

We’ll explain how that rule works in our next post.

09/19/2026

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09/18/2026

What is a Roth IRA conversion?

A Roth IRA conversion is the process of moving money from a Traditional IRA or non-deductible IRA into a Roth IRA.

Why consider a Roth IRA conversion?

You’ll pay taxes on any pre-tax dollars converted, but once the funds are in the Roth account, they can grow and be spent tax-free in retirement.

In addition, Roth IRAs are NOT subject to required minimum distributions (RMDs).

When is a Roth IRA conversion ideal?

A conversion may be especially valuable in years when your current tax rate is lower than you expect it to be in the future.

09/11/2026

Roth IRAs can be powerful tax planning tools, but income limits apply.

These limits are based on Modified Adjusted Gross Income or MAGI. This can make things a bit confusing because we don't often think of our income in these terms.

Referring back to your tax returns can help but tax planning is key.

It's best to think of MAGI as your Adjusted Gross Income with certain deductions added back in.

09/04/2026

Roth IRAs: The Tax Free Retirement Account

Most retirement accounts require withdrawals in retirement to be taxed as ordinary income. Roth IRAs allow withdrawals to be taken tax free.

With a Roth IRA, there is no upfront reduction in taxable income in the year of the contribution is made. These retirement accounts are funded with after tax dollars.

Once these funds are added to the Roth IRA, they grow without annual tax on dividends, interest, or capital gains.

So long as the future withdrawals are “qualified distributions,” they are considered tax free.