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11 Common Roth IRA Mistakes Genuine Parts Employees Should Avoid

Healthcare Provider Update: Healthcare Provider for Genuine Parts: Genuine Parts Company, primarily known for its automotive replacement parts, benefits from its association with several healthcare providers, but its specific health insurance options are not publicly detailed. Generally, employees are likely covered under major national providers such as UnitedHealthcare, Anthem, or Aetna, which offer group health plans as part of their employee benefits. Potential Healthcare Cost Increases in 2026: Healthcare consumers can anticipate significant premium hikes in 2026, driven by the looming expiration of enhanced subsidies under the Affordable Care Act (ACA). Reports indicate that many states could see premiums increase by as much as 66%, with average national hikes exceeding 20%. These increases stem from soaring medical costs and projected double-digit rate adjustments proposed by major insurers, putting additional financial strain on millions of Americans reliant on marketplace plans. If not addressed, this combination of factors could push some consumers' out-of-pocket healthcare expenses up by 75% or more, effectively pricing many individuals out of adequate coverage. Click here to learn more

'Genuine Parts employees should consider contributing to both a Roth IRA and a 401k to optimize tax-free growth and enhance retirement savings, while remaining mindful of contribution limits and withdrawal guidelines to avoid costly penalties.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'Genuine Parts employees can enhance their retirement planning by using a Roth IRA alongside their 401k, while avoiding common mistakes like exceeding contribution limits and failing to update beneficiary information.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

Common mistakes to avoid when managing a Roth IRA
Key differences between traditional and Roth IRAs
Strategies for optimizing Roth IRA benefits for Genuine Parts employees

One of the best ways for Genuine Parts employees to save for retirement is through an individual retirement account (IRA), with the Roth IRA standing out for its potential to provide tax-free withdrawals during retirement. However, managing a Roth IRA effectively requires a solid understanding of its rules. Errors such as incorrect beneficiary names, missed withdrawal guidelines, or exceeding contribution caps can result in penalties or the loss of tax-free benefits. To help your Roth IRA reach its full potential for long-term wealth creation, here are 11 common mistakes Genuine Parts employees should avoid and tips on how to prevent them.

Important Takeaways

- Contributions to a Roth IRA must be based on earned income and are subject to income limits.
- A 6% annual penalty on excess contributions may apply if you exceed the contribution limits.
- While beneficiaries must follow withdrawal rules, account holders are not required to take required minimum distributions (RMDs) during their lifetime.
- Converting a traditional IRA to a Roth IRA can offer long-term tax benefits when done correctly.

Understanding the Differences Between Traditional and Roth IRAs

Before diving into the common mistakes, it's essential to understand the distinctions between a Roth IRA and a traditional IRA. With a Roth IRA, you pay taxes on the money before it is deposited, as contributions are made with after-tax dollars. However, if you meet the conditions of being over 59½ and having held the account for at least five years, both your original contributions and earnings are typically tax-free when you withdraw in retirement.

On the other hand, a traditional IRA allows you to make tax-deductible contributions, but taxes are due when you withdraw funds in retirement. You must also begin withdrawing minimum payments from a traditional IRA at age 73, which will increase to 75 starting in 2033. Unlike traditional IRAs, Roth IRAs have no distribution requirements during the account holder’s lifetime, which is beneficial for asset transfer purposes.

With certain exceptions, including for spouses and minor children, beneficiaries of Roth IRAs are required to withdraw the full balance within ten years after the original account holder’s death, following the SECURE Act of 2020. Understanding these rules is critical for both Genuine Parts employees and their heirs.

1. Not Making Enough Money to Contribute

To contribute to a Roth IRA, Genuine Parts employees must have earned income—like wages or income from self-employment. The contribution limit is based on the amount of money you make each year. Roth IRA contribution limits are generally $7,000 for those under 50 and $8,000 for those 50 and older. Income from dividends, interest, or rental income doesn’t count toward the contribution limit.

If you are married and file jointly, you may also be able to contribute to a non-working spouse’s Roth IRA, as long as the total contributions don’t exceed the combined earned income.

2. Making Too Much Money to Contribute

Your eligibility for a Roth IRA is also determined by your modified adjusted gross income (MAGI). The IRS phases out direct contributions to Roth IRAs once you reach certain income thresholds. These limits are adjusted for inflation each year. The income phase-out ranges for 2025 are:

- $150,000 to $165,000 for single filers and heads of households
- $236,000 to $246,000 for married couples filing jointly
- $0 to $10,000 for married individuals filing separately (if they live with their spouse)

If your income falls within these ranges, your contribution limit may be reduced. If your income exceeds the highest limit, you cannot contribute to a Roth IRA.

3. Failing to Help Your Spouse

Although you can only contribute to a Roth IRA with your own earned income, there is an exception for married couples. If the working spouse earns enough to fund both contributions, they can contribute to a non-working spouse’s Roth IRA. This strategy can be particularly useful for couples looking to increase their retirement savings, potentially doubling their contributions over time.

4. Over-Contributing

If you exceed the Roth IRA contribution limit, a 6% penalty will be charged on the excess contribution until it is corrected. To avoid penalties, withdraw the excess contribution (along with any earnings on it) before you file your tax return.

If you miss the deadline for withdrawal, you can carry the excess contribution forward to the next year’s limit. Staying within the contribution limits helps you take full advantage of your Roth IRA without unnecessary costs.

5. Early Withdrawal of Earnings

Roth IRA contributions are made with after-tax dollars, so you can withdraw your contributions at any time without tax penalties. However, if you withdraw earnings before age 59½ or before the account has been open for at least five years, you may incur a 10% penalty along with income taxes.

There are exceptions to the penalty for certain situations, such as qualified educational expenses or first-time home purchases. While the 10% penalty can be avoided in these cases, income tax may still apply.

6. Violating the Rollover Rules

The IRS has a 60-day limit for rollovers between IRAs. You can only perform one rollover within a 365-day period. Direct transfers between IRAs don’t count toward this limit and are not subject to the same restrictions.

Exceeding the rollover limit can result in tax penalties and, in some cases, the loss of your tax-deferred status. Be sure to follow the rollover rules carefully to avoid penalties.

7. Changing the Money on Your Own

Rollovers can be direct or indirect. A direct rollover involves moving the money directly from one account to another, which eliminates the risk of missing the 60-day deadline.

An indirect rollover requires you to temporarily hold the money before transferring it to the new account. If you don’t deposit the funds within 60 days, you’ll face taxes and penalties.

8. Not Considering a Backdoor Roth IRA

If you make too much money to contribute directly to a Roth IRA, you can still fund one through a strategy known as a 'backdoor Roth IRA.' This involves making non-deductible contributions to a traditional IRA and then converting it to a Roth IRA. Since earnings on the conversion are taxable, it’s important to complete the conversion as quickly as possible to mitigate taxable gains.

For high-income Genuine Parts employees who want to take advantage of Roth IRAs despite income limits, the backdoor Roth IRA may be a valuable option.

9. Ignoring Beneficiary Designations

Beneficiary designation is a critical but often overlooked part of managing a Roth IRA. If beneficiaries are not updated, or if the account holder fails to designate beneficiaries after significant life events such as marriage or divorce, the Roth IRA may have to go through probate. This can delay the transfer of assets and incur additional expenses for your heirs.

Review your beneficiary list regularly and make any necessary changes to help your assets pass smoothly to your intended heirs.

10. Not Withdrawing Inherited Roth Funds

The SECURE Act of 2019 changed the rules for inheriting Roth IRAs. Beneficiaries, excluding spouses, must withdraw the entire balance of the inherited Roth IRA within 10 years. Some exceptions apply, such as for minor children, but this 10-year rule generally applies.

It’s crucial for beneficiaries to understand the withdrawal timeline to avoid tax penalties. Withdrawals are typically tax-free if the account has been open for at least five years.

11. Ignoring the Benefits of a Roth When You Already Have a 401k

Many Genuine Parts employees may be unaware of the benefits of contributing to a Roth IRA in addition to their 401k. While 401k plans often provide employer matching contributions, Roth IRAs offer significant tax-free growth potential and more flexibility in retirement planning.

Contributing to both a 401k and a Roth IRA can help increase retirement savings and provide a diverse range of tax benefits.

In Conclusion

Roth IRAs offer numerous advantages, including tax-free withdrawals, no required minimum distributions during your lifetime, and the ability to transfer assets to heirs with minimal tax impact. However, to fully benefit from these advantages, it’s important to avoid common mistakes like over-contributing, ignoring withdrawal rules, or neglecting to update beneficiary information. By being vigilant about the regulations and actively managing your Roth IRA, you can play a key role in shaping your future.

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Sources:

1. Russell, Rob. '8 Roth IRA Mistakes To Avoid.' Forbes , 30 May 2014, www.forbes.com/sites/robrussell/2014/05/30/8-roth-ira-mistakes-to-avoid/ .

2. Backman, Maurie. '11 Mistakes to Avoid With Your Roth IRA.' Investopedia , 10 Apr. 2015, www.investopedia.com/articles/retirement/041015/11-mistakes-avoid-your-roth-ira.asp .

3. O'Connell, Brian. '10 IRA Mistakes to Avoid.' U.S. News & World Report , 25 Mar. 2025, money.usnews.com/money/retirement/articles/10-ira-mistakes-to-avoid.

4. Schlesinger, Jill. '5 Roth IRA Investments You Should Always Avoid.' Forbes , 24 Apr. 2019, www.forbes.com/sites/jillsschlesinger/2019/04/24/5-roth-ira-investments-you-should-always-avoid/ .

5. Hannon, Kerry. 'How a Roth IRA Conversion Can Help You Pass On More Wealth.' Money , 22 Apr. 2016, money.com/money/retirement/article/how-a-roth-ira-conversion-can-help-you-pass-on-more-wealth/.

What benefits does the GPC Pension Plan provide to employees of Genuine Parts Company, and how are these benefits calculated for both Group 1 and Group 2 employees? In the context of Genuine Parts Company, what are the critical factors that determine the pension benefits for employees and how have recent changes to the plan affected these calculations?

The benefits of the GPC Pension Plan for Genuine Parts Company employees are calculated based on the employee’s Final Average Monthly Earnings (FAME) and years of Credited Service. For Group 1 employees, benefits are frozen as of December 31, 2013, with the FAME calculated from the five highest-paid years within the last ten years of service before that date. For Group 2 employees, benefits are similarly frozen as of December 31, 2008, and the same calculation of FAME is applied using the highest earnings before that freeze date(Genuine Parts Company_P…).

How do the eligibility requirements of the GPC Pension Plan differ between Group 1 and Group 2 employees at Genuine Parts Company? Additionally, what specific service requirements must employees meet to qualify for the benefits under each group, particularly considering the impact of employment history and rehire status on benefits?

Eligibility requirements differ between Group 1 and Group 2 employees. Group 1 includes employees with Rule of 70 status, who opted to continue participation in the plan after January 1, 2009. Group 2 employees, which include those rehired before December 31, 2013, had their Credited Service frozen earlier in 2008. Group 1 employees have Credited Service frozen as of December 31, 2013, while Group 2’s freeze date is December 31, 2008(Genuine Parts Company_P…).

What strategies can employees of Genuine Parts Company consider for optimizing their pension benefits when transitioning to retirement? Are there specific actions that employees should take prior to retirement to enhance their benefit calculations under the GPC Pension Plan, particularly in relation to Credited Service and Final Average Monthly Earnings?

To optimize pension benefits, Genuine Parts Company employees should focus on maximizing Credited Service and Final Average Monthly Earnings (FAME). Ensuring a full work history before the freeze date (2013 for Group 1, 2008 for Group 2) can enhance the benefit calculation. Employees can also review their Social Security benefit estimates, which are considered in calculating their pension(Genuine Parts Company_P…).

How does the vesting process work for employees participating in the GPC Pension Plan at Genuine Parts Company, and what implications does it have for those contemplating early retirement? Furthermore, how does the ability to vest at different service intervals specifically impact the retirement planning of employees?

The vesting process for the GPC Pension Plan requires employees to accumulate vesting service years, which continues even after the freeze date. Employees are automatically fully vested after seven years of service, or if they worked at least one hour after December 31, 2013. Vesting ensures the right to the earned pension benefits, which may affect retirement planning, especially for those contemplating early retirement(Genuine Parts Company_P…).

What information should Genuine Parts Company employees know about the different forms of payment available under the GPC Pension Plan once they reach retirement age? How do options such as life annuities and lump-sum payments affect the overall financial planning for retiring employees?

Genuine Parts Company employees can choose from various forms of pension payments upon retirement, including life annuities, joint and survivor annuities, and lump-sum payments. Each option affects financial planning differently: life annuities provide steady income, while lump sums offer flexibility but require careful management to ensure long-term financial stability(Genuine Parts Company_P…).

In the event of a termination of employment, what options are available for employees of Genuine Parts Company to access their pension benefits under the GPC Pension Plan? Additionally, what are the specific procedures that employees must follow to ensure they receive their benefits in a timely manner?

In the event of termination, employees who are vested can access their pension benefits, either at their normal retirement age or earlier if they meet the eligibility criteria for early retirement. Employees must submit a request within 180 days of their termination date to receive benefits, with options for lump sum payments for amounts under $75,000(Genuine Parts Company_P…)(Genuine Parts Company_P…).

How can employees of Genuine Parts Company ensure that their beneficiaries are appropriately named under the GPC Pension Plan? What considerations should employees keep in mind when designating beneficiaries, particularly understanding consent needs for spouses and the impact of domestic relations orders?

Genuine Parts Company employees should ensure their beneficiaries are properly named, particularly if married. A spouse is the default beneficiary, but spousal consent is required if an employee designates someone else. Domestic relations orders may also affect beneficiary designations(Genuine Parts Company_P…).

What unique situations might affect the pension benefits of employees at Genuine Parts Company, and how does the plan specifically address employees on military leave or long-term disability? In these circumstances, what communication strategies should employees employ to navigate their benefits?

For employees on military leave or long-term disability, the GPC Pension Plan provides special rules for calculating benefits. These employees should maintain close communication with the Employee Service Center to ensure their benefits are appropriately adjusted(Genuine Parts Company_P…).

Regarding the reporting and update of personal information, why is it essential for employees of Genuine Parts Company to keep the GPC Employee Service Center informed about any changes in marital status or address? How can failure to report these changes potentially impact the pension benefits they receive?

Employees must keep the GPC Employee Service Center informed of any changes in marital status or address, as failure to do so could result in delayed or incorrect pension benefit payments(Genuine Parts Company_P…).

How can employees at Genuine Parts Company reach out for further clarification on the details presented in the Summary Plan Description of the GPC Pension Plan? What resources or contact points are available that could assist in navigating the complexities of the pension plan, ensuring employees can maximize their benefits effectively?

Genuine Parts Company employees can reach out to the GPC Retirement Plan Services through their toll-free number or website for clarification on the pension plan details. These resources are crucial for navigating the complexities of the pension system(Genuine Parts Company_P…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Pension Plan Name of the Pension Plan: Genuine Parts Company Defined Benefit Pension Plan Years of Service and Age Qualification: Employees generally need to have at least 5 years of service to qualify for benefits. Full benefits typically begin at age 65, but early retirement options may be available with reduced benefits. Pension Formula: The pension is calculated based on a formula that takes into account the employee's years of service and average salary over the highest-paid years. 401(k) Plan Name of the 401(k) Plan: Genuine Parts Company 401(k) Plan Eligibility: Employees are eligible to participate in the 401(k) plan after completing 30 days of service. 401(k) Plan Details: The plan allows employees to contribute a portion of their salary to a tax-deferred account, with potential company matching contributions.

Restructuring and Layoffs: In early 2024, Genuine Parts announced a significant restructuring initiative aimed at streamlining operations and enhancing efficiency. This restructuring plan includes the reduction of approximately 5% of its workforce across various divisions. This move is expected to help the company better adapt to market fluctuations and optimize its operational costs. The restructuring reflects broader industry trends as companies adapt to evolving economic pressures and changing market dynamics.

Genuine Parts Company (GPC) Stock Options and RSUs in 2022 GPC offered stock options and RSUs to executives and key employees as part of their compensation package. The stock options typically included a strike price set at market value at the grant date. RSUs granted by GPC generally vested over a period of three to four years, with the exact vesting schedule specified in individual agreements. Genuine Parts Company (GPC) Stock Options and RSUs in 2023 In 2023, GPC continued to offer stock options and RSUs to their management team and senior employees. The stock options were often part of performance-based compensation. The RSUs were allocated with a focus on aligning employee incentives with company performance, typically vesting in tranches over a multi-year period. Genuine Parts Company (GPC) Stock Options and RSUs in 2024 For 2024, GPC maintained its stock option and RSU programs, enhancing the benefits for senior executives and select high-performing employees. The company adjusted the vesting criteria and performance metrics for RSUs to reflect the company's strategic goals and market conditions.

1. Official Website and Key Benefits Information Genuine Parts Company Official Website Visit: Genuine Parts Careers Review sections on employee benefits and health plans. Look for specific healthcare-related terms and acronyms. Key Terms and Acronyms: HDHP: High Deductible Health Plan HSA: Health Savings Account EAP: Employee Assistance Program FSA: Flexible Spending Account PPO: Preferred Provider Organization HMO: Health Maintenance Organization Recent Updates: Genuine Parts Company offers comprehensive health benefits, including medical, dental, and vision plans. They also provide wellness programs and access to telemedicine services. 2. Reliable Sources and Recent Employee Healthcare News a. Glassdoor Search for Genuine Parts Company’s benefits reviews. Look for employee feedback on healthcare coverage and recent changes. b. Indeed Check employee reviews and Q&A sections for insights into health benefits. c. LinkedIn Explore company posts and employee discussions about health benefits. d. BenefitsPro Look for articles or reports on Genuine Parts Company’s health benefits updates and changes. e. Business Insider Search for news articles related to recent changes in health benefits or related employee programs at Genuine Parts. 3. Summary of Findings Healthcare Plans: Genuine Parts offers a range of health insurance options including PPO and HDHP plans, with contributions to HSAs and FSAs. They also provide access to preventive care and wellness programs. Recent Changes: Recent updates to their health benefits have included enhancements to telemedicine services and expanded mental health support through EAP programs. Employee Feedback: Employees generally appreciate the comprehensive coverage but have noted that premium costs and deductibles can be high.