There are many “Questions to Ask Your Financial Advisor” lists out there on the Internet. Although some of these questions may help some people discern which professional to sign up with, we prefer our ten questions as they cut to the heart of the matter. They have an obvious correct answer (“Yes”), an obvious incorrect answer (“No”), and any professional who tries to veil their answer behind marketing nuances without giving a clear yes or no can be counted as incorrect. Our ten questions should not be hard for an advisor to answer.

That being said, I enjoy answering every set of ten questions I find.

In 2023, I found this list written by Marvin Rotenberg for Ed Slott’s website on December 7, 2011 . At the time, Ed Slott’s IRA Help website featured the list prominently on the website, with a shortcut link to the article on the right side of each page. So, I saved the list to reply to.

In preparing for this article, I have learned that the IRA Help website was featuring a link to the 2011 article , even though Andy Ives had since updated the list slightly. The minimal attention to detail for this list made me question whether I should publish our replies at all.

However, these questions are interesting ones because — rather than focusing on skill, service, expertise, or strategy — this list focuses on how you know what you know and how you will continue to be informed. I suspect that this bias comes from the fact that Ed Slott’s target audience is advisors themselves, not clients.

From that, I suspect that this list is not really meant to be used in the field. It seems that the intent of this list is to make advisors feel under-prepared and thus more likely to sign up for one of the paid newsletters Ed Slott provides.

Regardless though, here are his 10 questions (old and new versions when applicable) and my answers:

Old 1. I know this area requires specialized knowledge in IRA distribution planning. Do you have expertise in this area? How would I know that?
New 1. IRA distribution planning requires specialized knowledge. Do you have expertise in this area?

Our expertise is clearly demonstrated in the wealth of free information we share on our website.

As of June 2024, we have written over 2,900 articles. Many of those are focused specifically on the topics of Roth conversions, required minimum distributions, qualified charitable distributions, nondeductible contributions, and estate management.

We have no secret ingredient at Marotta Wealth Management. We openly and publicly publish our strategies as articles on our website. My hope is that by documenting the most elegant solutions of financial planning, you are able to prepare your own investment plan and meet your own financial objectives.

Old 2. What books have you read on the topic? (Look at the books. If they crack when you open them…run. It’s the first time the book has been opened.)
New 2. What books have you read on the topic?

It is difficult to learn financial planning and tax planning from a book. It takes a long time for an author to write a book, but novel planning strategies are being discovered regularly.

It is also difficult to learn investment management from a book. An investment book is a static record of one strategy over one time period. The books rarely provide sufficient information to replicate their results and often the strategies fall apart when implemented over different or recent time periods.

This is why my first choice in financial education is to learn as a scientist would: either directly from the source material or to review the studies of my peers and then see if I can corroborate their findings.

3. What professional training do you take in IRA distribution planning? What courses or programs have you taken? Can you show me the last course manual you received?

I design materials for other professionals to learn about IRA distribution planning.

4. How do you stay current on key IRA tax laws? What services or resources do you rely on to stay up to date? Can you show me a sample?

I am subscribed to the IRS bulletins and have a Congress.gov custom search subscription so I can receive updates as rapidly as the government releases them. I also have several saved Google alert searches for key outstanding policy questions, such as the currently open case related to inherited RMDs.

5. What is the latest IRA tax rule you are aware of? When did it occur?

It is currently June 2024.

We received the new 2024 inflation-adjusted contribution limits back in November 2023. With this inflation-adjustment also came the first time the qualified charitable distribution (QCD) limitation was inflation-adjusted. This increased the maximum QCD gift limit from $100,000 prior to 2024 to $105,000 in 2024 .

We are waiting final notice on inherited IRA RMDs, but received an update on April 16, 2024 telling taxpayers to wait longer.

We expected the high wages catch-up limitation to implement in 2024, but the IRS announced a transition period , which pushed the implementation back to 2026.

In 2025, we are expecting the new catch-up contribution limits.

In 2026, we are expecting the expansion of ABLE accounts and the expiration of several provisions from the Tax Cuts and Jobs Act including the estate exemption.

6. How do you determine the best option for my lump sum distribution? What are all of my choices?

This question is overly simplistic because there are many types of lump sum distributions. You can get a lump sum distribution from a deferred compensation plan, a pension plan, a retirement plan, an annuity, and sometimes a simple rollover is described as a lump sum distribution by the provider.

Regardless of which type of lump sum distribution you are dealing with, if it is a type that has tax consequences, we like to develop a Tax Plan using our customized Roth conversion analysis to decide which strategy is the best.

Often times, choices include, a nontaxable rollover, a taxable Roth conversion, a taxable distribution, and an annuitized income stream.

7. How would you keep track of my IRA beneficiary form? When should I update my IRA beneficiary form? What are the key events that would trigger a need for a review?

Either we or you submit your beneficiary designations to the qualified third-party custodian who holds your assets. This custodian, typically Charles Schwab, is responsible for maintaining accurate records of your beneficiary designations.

IRA beneficiary designations should be updated any time your estate intentions have changed. They should be reviewed when you update your estate plan, when estate law has changed, or if the relationship with any of your designated beneficiaries have changed.

8. Can you show me the IRS life expectancy tables?

I can do you one better. I have personally coded a calculator which aids taxpayers in finding their divisor: An Updated RMD Calculator (New Divisors for 2022).

Old 9. Do you know what will happen to my IRA after I die? How will you make sure that my beneficiary will get the stretch IRA?
New 9. Do you know what will happen to my IRA after I die?

I don’t know what will happen to your IRA as you are not my client, and I don’t know what your beneficiary designations are on the account. However, I have written several guides on what happens to IRAs after the original owner’s death including “The Full Complexity of All Required Minimum Distribution Divisors Explained (2020 Update).”

I, like Ed Slott, am waiting on IRS guidance to know for sure how the IRS will implement some aspects of the SECURE Act. You can read about some of the potential complexity in the “Proposed RMD Rules: The Madness Continues.”

10. Who do YOU turn to when you have questions on IRA distribution planning? No one can know it all.

I rely on the direct source (the IRS, the original trust or retirement plan document, etc.) or I rely on the studies of my peers in financial planning. This is where Ed Slott wants me to say Ed Slott, which is one way you can tell these questions aren’t very strong.

Hopefully, you have learned something about Marotta Wealth Management from this article. I find it interesting that Ed Slott’s 10 Questions prey upon societal discomfort about who is an expert. Who does Ed Slott’s team turn to when they have questions? If we force experts to say someone else, we eventually end up with turtles all the way down.

Photo by Jon Tyson on Unsplash. Image has been cropped.