This article focuses on rollovers by a

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "This article focuses on rollovers by a"

Transcription

1 Rollovers From Retirement Plans and IRAs By Marcia Chadwick Holt This article focuses on rollovers by a surviving spouse and by a nonspouse to retirement plans and individual retirement accounts (IRAs). This article does not deal with a surviving spouse rolling over a retirement account of a deceased spouse that is payable to an estate or trust. Perhaps a later article can deal with that issue. In General A surviving spouse who is named beneficiary of a deceased spouse s account in an eligible retirement plan may be able to postpone income tax by rolling over the retirement account to an IRA or other eligible retirement plan in which the surviving spouse participates. This option is usually not available to a surviving spouse who is the beneficiary of an annuity. What Can Be Rolled Over? A surviving spouse can roll over a deceased spouse s account from an IRA or other eligible retirement plan to an IRA or other eligible retirement plan in which the surviving spouse participates and uses the surviving spouse s life expectancy for purposes of required minimum distributions (RMDs). Note that RMDs define only the minimum amount that must be withdrawn. They do not limit the maximum amount that may be withdrawn. RMDs are not eligible for a rollover. Eligible retirement plans include: qualified plans under the Internal Revenue Code of 1986 as amended ( Code ) 401(a), such as 401(k) plans; Code 403(a) Annuity Plans; Code 403(b) Tax-Sheltered Annuity Plans, such as TIAA-CREF plans; certain Code 457 Governmental Plans; and IRAs. Of course, the terms of the recipient plan must allow receipt of the rollover. These rollovers are tax-free. In addition, distributions from eligible retirement plans can be rolled over directly to a Roth IRA. Prior to January 1, 2010, a rollover to a Roth IRA is allowed only if the taxpayer s adjusted gross income does not exceed $100,000 and the taxpayer is not a married individual filing a separate return in the year of the rollover. These limitations do not apply after December 31, A rollover into a Roth IRA is usually not tax-free. Any amount that is rolled over to a Roth IRA is includable in gross income, except to the extent it represents a return of aftertax contributions. If the rollover is made in 2010, the taxpayer has two years (2011 and 2012) over which to ratably pay the income tax. After-tax contributions may also be transferred from a Code 403(b) Tax- Sheltered Annuity or qualified plan to a Code 403(b) Tax-Sheltered Annuity by a direct rollover, provided the receiving plan accepts such rollovers and separately accounts for after-tax contributions and their earnings. Marcia Chadwick Holt is an attorney with Davis, Graham & Stubbs LLP, Denver, Colorado, and practices in the area of ERISA, deferred compensation, and estate planning. She can be reached at dgslaw.com. This material was adapted from Estate Planning for Retirement by Marcia Chadwick Holt (Bradford Publishing, 2007; supplemented in 2009). The book is available from Bradford Publishing Company, www. bradfordpublishing.com. 25 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

2 PRACTICE POINTER: Retirement plans are not required to accept rollovers. Check first before starting the paperwork. Surviving Spouse Over Age 70½ What if the surviving spouse is over age 70½ and wants to establish a rollover IRA? No problem. Although an individual cannot contribute to an IRA if the individual is over age 70½ in the contribution year, an individual can establish a rollover IRA regardless of age, that is, before or after his or her required beginning date (RBD). An individual s RBD is generally, with some exceptions, April 1 of the year following the year in which the individual attains age 70½. The RBD is the date when RMDs must begin. If the surviving spouse is age 70½ or older, there are two separate rollover rules, as follows. Year of Death Assume a surviving spouse rolls over the deceased spouse s account in the year of the deceased spouse s death, and the death occurred after the deceased spouse s RBD but before the deceased spouse withdrew his or her RMD for the year of death. The surviving spouse as beneficiary must withdraw the RMD that the deceased owner was required to withdraw. The surviving spouse can then roll over the balance of the account. If the deceased spouse had not reached his or her own RBD, no RMD is required in the year of death. The surviving spouse can roll over the deceased spouse s entire account. Year Following Death Assume a surviving spouse has reached his or her RBD and rolls over the deceased spouse s account in a year following the death of the deceased spouse. The surviving spouse must withdraw an RMD in the calendar year of the rollover. The surviving spouse determines his or her RMD based on the surviving spouse s age and the Uniform Lifetime Table. The Uniform Lifetime Table and other IRS tables used in determining RMDs can be found in IRS publication 590 at or in the IRS regulations at 401(a)(9)-9. The surviving spouse can then roll over the balance of the deceased spouse s account. Recent law waives all RMDs from IRAs, defined contribution plans, and most governmental plans for the year 2009, except those RMDs required for 2008 that were postponed until April 1, Those RMDs must still be withdrawn. Defined contribution plans provide an individual account for each participant. Benefits are based on amounts contributed, and any income, expenses, gains, losses, and forfeitures allocated to the account. Such plans include the eligible retirement plans defined above. If the surviving spouse has not reached his or her RBD, no RMD is required. The surviving spouse can roll over the deceased spouse s entire account. 20 Percent Withholding If the surviving spouse does not roll over an eligible rollover distribution, a 20 percent withholding rule applies. Eligible rollover distributions for these purposes include distributions from qualified plans, Code 403(a) Annuity Plans, Code 403(b) Tax-Sheltered Annuity Plans, and Code 457 Governmental Plans. Eligible rollover distributions do not include RMDs and certain other distributions, such as hardship distributions and periodic payments. IRAs are not subject to the 20 percent withholding rule. PRACTICE POINTER: Even if the retirement plan is required to withhold 20 percent of the distribution for income taxes, there can still be a tax-free rollover. How? Within sixty days of receiving the check, the surviving spouse can roll over the amount of the check plus the amount withheld to the rollover plan or IRA. Of course, the surviving spouse must pay the amount withheld from his or her own funds. But this may be better than paying income tax on the amount withheld that is taxable if it is not rolled over. Surviving Spouse as Owner? If a surviving spouse rolls over the benefits to an IRA in the surviving spouse s name or to a plan in which the spouse has an account, the surviving spouse is treated as the owner. Advantages for Surviving Spouse as Owner There are many advantages for a surviving spouse as an owner. 26 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

3 As owner, the surviving spouse can name new beneficiaries and maximize the period over which RMDs can be made. For example, if a surviving spouse at age seventy-two rolls over a retirement account, his or her RMD will be based on his or her life expectancy under the Uniform Table. That distribution period is 25.6 years. On the other hand, if the surviving spouse took the retirement account as beneficiary, his or her RMD would be based on his or her life expectancy under the Single Life Table. That distribution period is 15.5 years. If the IRA were $1 million and if the surviving spouse took a distribution as owner at age seventy-two, the RMD would be $39,063. If the surviving spouse took it as the beneficiary, the RMD would be $64,516 a difference of more than 165 percent. If the surviving spouse wants to stretch out payments and make the retirement account last the longest, taking it as owner may be the best choice. As owner, the surviving spouse can change the deceased spouse s contingent beneficiaries and name his or her own beneficiaries. At the surviving spouse s death, the new beneficiaries could use their own life expectancies for RMD purposes if separate accounts are created or, if not, the new beneficiaries would use the life expectancy of the oldest beneficiary. For example, if the surviving spouse named a child who was forty-two years old as beneficiary of a separate account at the surviving spouse s death, distributions could continue for 41.7 years over that child s life expectancy under the Single Life Table. On the other hand, if the surviving spouse took as beneficiary and that child was named as successor beneficiary to the spouse, the child would take the retirement benefit over the remaining life expectancy of the surviving spouse. As noted above, at age seventy-two that life expectancy is only 15.5 years. The account must be paid in full to the child 26.2 years sooner than if the surviving spouse had rolled over the account. PRACTICE POINTER: A rollover by the surviving spouse can disrupt the estate plan of the deceased spouse. The surviving spouse can name anyone as beneficiary of the new IRA rollover. How about a new spouse as beneficiary? Not exactly what the deceased spouse had in mind. As owner, if a surviving spouse is younger than the deceased spouse, the surviving spouse can postpone RMDs to a later date, that is, can postpone payment to the surviving spouse s RBD. On the other hand, if the surviving spouse does not roll over the benefits and takes as beneficiary of the deceased spouse s account, the surviving spouse can only postpone taking distributions until December 31 of the year in which the deceased spouse would have been 70½. Postponing distributions can be beneficial because there is more time to accumulate earnings tax-free. Another advantage of taking as owner is that the surviving spouse can shop around for an IRA provider that offers desired investments. For example, if the deceased spouse s retirement account was invested aggressively and the spouse is risk adverse, a change to an IRA that allows more conservative investments may be attractive. Also, some IRA providers are very service oriented and have helpful educational materials available regarding RBDs, RMDs, and IRAs in general. Shop around to find one. Disadvantages for Surviving Spouse as Owner There are some disadvantages if a surviving spouse rolls over retirement benefits. A surviving spouse who becomes an IRA owner is subject to a 10 percent additional income tax if the surviving spouse takes withdrawals before attaining age 59½. The adverse income tax results can be minimized by the surviving spouse rolling over only the amount that he or she does not need before attaining age 59½ and by retaining in the deceased spouse s retirement account or IRA the amount needed before age 59½. There is no 10 percent additional income tax if the surviving spouse withdraws as a beneficiary. Another disadvantage of a surviving spouse as owner is that higher estate taxes may be payable at the surviving spouse s later death than would be due if the retirement benefits had been payable to the deceased spouse s applicable exclusion trust or to beneficiaries other than the spouse. If the spouse is an owner, remaining retirement accounts are includable in the spouse s estate. If an If the surviving spouse wants to stretch out payments and make the retirement account last the longest, taking it as owner may be the best choice. 27 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

4 applicable exclusion trust or beneficiaries other than the spouse are the named beneficiary, the remaining retirement accounts would not be so includable. Surviving Spouse as Beneficiary? Advantages for Surviving Spouse Under Age 59½ as Beneficiary As noted above, if the surviving spouse has not reached age 59½, taking distributions as a beneficiary avoids the 10 percent additional income tax. Disadvantage If a Surviving Spouse Takes as Beneficiary There is a disadvantage if a surviving spouse takes as beneficiary, that is, if a surviving spouse fails to roll over the deceased spouse s account. If the surviving spouse dies before attaining age 70½, the surviving spouse is treated as the IRA owner rather than as the beneficiary. If the spouse has not named a beneficiary of the IRA, the IRA will be distributed after the surviving spouse s death as if there were no beneficiary under the default provisions of the IRA. The usual default beneficiary of an IRA is the owner s (in this case, surviving spouse s) estate. The result? The RMDs will be higher. Although the solution is for the surviving spouse to name a beneficiary, many IRA providers will not allow a spouse who takes as beneficiary to name a successor beneficiary until after the first spouse dies. Sometimes the surviving spouse simply forgets to name a beneficiary and dies before naming a beneficiary. PRACTICE POINTER: If a surviving spouse wants to roll over a benefit, don t delay. Make sure the surviving spouse names a beneficiary. Death before a rollover can create problems. How to Determine a Surviving Spouse s Life Expectancy How do you determine the life expectancy of a surviving spouse for purposes of RMDs? Do not assume that you always calculate a surviving spouse s life expectancy in the same manner. There are three different ways to calculate it. Uniform Table: Owner by Rollover The surviving spouse s life expectancy is determined under the Uniform Table calculated each year if the surviving spouse rolls over the deceased spouse s account to a new IRA in the surviving spouse s name. Single Life Table: Sole Beneficiary The surviving spouse s life expectancy is determined under the Single Life Table calculated each year if the surviving spouse is the sole beneficiary. Note that if a trust is named as beneficiary, the surviving spouse is only treated as the sole beneficiary of the trust if no distributions from the retirement plan or IRA can be accumulated in the trust for any beneficiary other than the spouse during the spouse s lifetime. Single Life Table: Not Sole Beneficiary The surviving spouse s life expectancy is determined under the Single Life Table Spouse s Age During Distribution Year Distribution Period (Divisor) Uniform Table (Owner) Single Life Table (Beneficiary) Recalculated If Term Certain If Not If Rollover Sole Beneficiary Sole Beneficiary 68 No RMD No RMD Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

5 if the surviving spouse is not the sole beneficiary, but is the oldest beneficiary, and all other beneficiaries are individuals. This might occur if, for example, a surviving spouse and children are beneficiaries of the same trust. The surviving spouse s life expectancy is calculated once, and one is subtracted from that life expectancy period for each subsequent year. The Difference in RMDs There can be large differences in the RMDs. For example, if the surviving spouse were seventy-four years old in the distribution year and the prior December 31 IRA account balance was $1 million, the RMD for the distribution year would be $42,017 (divisor is 23.8) from an IRA rollover in the surviving spouse s name; $70,922 (divisor is 14.1) from the deceased spouse s IRA, if the spouse were the sole beneficiary of the deceased spouse s account; and $79,365 (divisor is 12.6) from the deceased spouse s IRA, if the spouse was not the sole beneficiary of the deceased spouse s account. PRACTICE POINTER: There is a 50 percent excise tax on the amount that should have been withdrawn as an RMD but was not. Make sure to use the correct table to calculate the surviving spouse s life expectancy. IRA providers will help you determine the RMDs from an IRA. Plan administrators must determine RMDs from other retirement plans and inform the beneficiaries of the amounts they must withdraw. Don t forget that a recent law waives certain RMDs for the year Methods of Rollover From a Retirement Plan for a Surviving Spouse Rollover to an IRA The surviving spouse may withdraw the retirement plan assets and transfer them to a new or existing IRA in the surviving spouse s name. To be tax-free, the transfer must be completed within sixty days of the date of receipt of the distribution from the retirement plan. If the distribution consists of property other than money, the amount transferred must consist of the property transferred. However, if the property is sold before the rollover, the proceeds (including any increase in value) are treated the same as property received in the distribution and can be rolled over to an IRA. Note that the 20 percent withholding tax discussed above applies. Trustee-to-Trustee Transfer or Direct Rollover Instead of a withdrawal and subsequent rollover, the surviving spouse should direct the trustee or custodian of the retirement plan to transfer the decedent s retirement plan assets directly to the trustee or custodian of a new or existing IRA titled in the name of the surviving spouse through either a direct rollover or trustee-to-trustee transfer. The surviving spouse will then not need to worry about the required 20 percent withholding tax or depositing the check within sixty days of the date of receipt. A Surviving Spouse s Rollover From an IRA In General Distributions from an IRA are not subject to a 20 percent withholding tax. IRA assets may be transferred without income tax from a deceased spouse to the surviving spouse if properly structured. A distribution from an IRA in the form of money and other property may be rolled over tax-free to an IRA as long as the transfer occurs within sixty days of receipt of the property (unless an exception applies) and the entire amount received (including money and other property) is paid into the IRA or Roth IRA. Note that this is a different rule than applies to a retirement plan where sale proceeds can be rolled over to an IRA. A surviving spouse can either elect to treat a deceased spouse s IRA as his or her own or can be deemed to have so elected as follows. First Method: Elect to Treat as Own The surviving spouse can elect to treat an IRA as the spouse s own at any time. The surviving spouse must be the sole beneficiary of the IRA and have an unlimited right of withdrawal. The surviving spouse can use one of three methods. Change the Owner s Name. The surviving spouse may elect to treat the IRA as the spouse s own account by contacting the IRA provider and redesignating 29 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

6 the account in the name of the surviving spouse as owner of the IRA rather than as beneficiary. Roll Over the IRA Assets. The surviving spouse may withdraw the IRA assets and transfer them to a new or existing IRA titled in the name of the surviving spouse. To be tax-free, the transfer must be completed within sixty days of the date of receipt of the distribution from the IRA. PRACTICE POINTER: Only one tax-free withdrawal is allowed from an IRA in a twelvemonth period. Planning is critical. A direct rollover or trustee-to-trustee transfer from an IRA to a Roth IRA is not subject to this rule. Direct Rollover or Trustee-to-Trustee Transfer. The surviving spouse may direct the trustee or custodian of the IRA to transfer the deceased spouse s IRA assets directly to the trustee or custodian of a new or existing IRA titled in the name of the surviving spouse. PRACTICE POINTER: There are no limitations to the number of tax-free direct rollovers or trustee-to-trustee transfers allowed. Second Method: Deemed Election An election will be deemed to have been made by the surviving spouse for the year following the year of the deceased spouse s death if the surviving spouse is the sole beneficiary and if the deceased spouse s RMD has not been distributed within the appropriate time period applicable to the surviving spouse as beneficiary. In addition, the surviving spouse will be deemed to have elected to treat the IRA as his or her own if the surviving spouse makes a contribution to the account. Timing Does it matter when the surviving spouse rolls over a decedent s retirement plan or IRA benefits? No. There is no time limit on when the surviving spouse can roll over distributions. Furthermore, the election to treat an IRA as the spouse s own account is permitted to be made at any time after the individual s death. However, a surviving spouse can never roll over RMDs. Rollovers by a Nonspouse Designated Beneficiary Why Are Rollovers by Nonspouses Advantageous? Many employers design their retirement plans to benefit only employees and their spouses and not the employees children. These plans may require that benefits payable to children and other nonspouse beneficiaries be paid immediately in a lump sum or over a short period of time rather than over the beneficiary s life expectancy, which the law allows. Income taxes are due on the distributions. These plans do not want to make distributions over long periods of time because of the administrative expense. For example, a benefit payable to a fiveyear-old that could be paid over his or her life expectancy could be payable over 77.7 years under the IRS Single Table. The nonspouse rollover rules are advantageous because they allow the nonspouse designated beneficiary to roll the decedent s account out of the restrictive plan on a tax-free basis. The nonspouse designated beneficiary can use his or her life expectancy for distributions from the rollover IRA. IRA providers would love to have the five-year-old s IRA for 77.7 years. More fees. In 2007 and Subsequent Years Effective for distributions in 2007 and in subsequent years, a nonspouse designated beneficiary (such as a child) can transfer a distribution from a decedent s eligible retirement plan by means of a direct rollover or trustee-to-trustee transfer to a beneficiary IRA or individual retirement annuity. To be a designated beneficiary, the individual must be so designated by the terms of the plan or by the participant in writing before his or her death. Distributions from the beneficiary s IRA are subject to the RMD rules, but the decedent remains the owner. The nonspouse beneficiary has only a beneficial interest in the new account. The nonspouse beneficiary can name successor beneficiaries. From 2007 through 2009, the rollover is treated as an eligible rollover distribution for some purposes. Plans are not required to offer the direct rollover to a nonspouse beneficiary. In addition, 30 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

7 neither certain notice requirements nor the 20 percent withholding rule apply. For plan years beginning in 2010, the rules change. A nonspouse designated beneficiary can transfer a distribution from a decedent s eligible retirement plan other than an IRA by means of a direct rollover or trustee-to-trustee transfer to a beneficiary IRA or individual retirement annuity. The rollover is an eligible rollover distribution for all purposes and must be offered by all eligible retirement plans other than IRAs. Certain notice requirements and 20 percent withholding rules apply. PRACTICE POINTER: The nonspouse designated beneficiary must establish a new rollover IRA as beneficiary and take RMDs under the Single Life Table. The nonspouse designated beneficiary must not commingle the inherited IRA with any other IRAs that the nonspouse beneficiary owns. Note that the nonspouse beneficiary s IRA will still be titled in the name of the decedent, but the nonspouse beneficiary s Social Security number will be used. If a participant dies before his or her RBD and the five-year rule applies under the retirement plan, the timing of the direct rollover or trustee-to-trustee transfer is critical. The following example helps explain the rules. Assume that a participant dies in Year 1 before his or her RBD and the eligible retirement plan offers only the Five- Year Rule (that is, the plan benefits must be distributed on or before December 31 of the calendar year in which the fifth anniversary of the death occurs). In that case, the nonspouse designated beneficiary is permitted to roll over the deceased participant s entire account into an IRA in Year 1 and take RMDs from the IRA under the Life Expectancy Rule (that is, over his or her life expectancy under the Single Life Table) beginning on or before December 31 of Year 2. If the account balance is rolled over in Year 2, the amount eligible for rollover must first be reduced by the amount of the RMD that must be taken in Year 2, determined using the Life Expectancy Rule. In Years 2 and 3, the nonspouse designated beneficiary may still roll over the funds from the plan but must take RMDs from the IRA under the Five-Year Rule because the Life Expectancy rule does not apply unless RMDs begin by December 31 of Year 2. Because the deadline was missed, the Five-Year Rule applies. Consequently, no amount can be rolled over after Year 4 because the entire distribution in Year 5 would be an RMD because of the Five- Year Rule. RMDs cannot be rolled over to an IRA. If the year 2009 is involved, the Five-Year Rule becomes a Six-Year Rule because recent law waived RMDs for PRACTICE POINTER: Timing is critical. If a participant died before his or her RBD, the direct rollover or trustee-to-trustee transfer from an eligible retirement plan other than an IRA to an IRA must occur by December 31 of the year following the year of the deceased participant s death for the Life Expectancy Rule to apply. If the deadline is missed, the Five-Year Rule applies. However, the IRS recently issued a private letter ruling to a taxpayer that allowed the Life Expectancy Rule to apply because the taxpayer paid a 50 percent excise tax on the RMDs that were due but that were taken late. If a participant dies after his or her RBD, the Five-Year Rule does not apply, but timing of the direct rollover or trustee-to-trustee transfer is still critical. RMDs over the nonspouse s life expectancy must begin by December 31 of the year following the year of the participant s death. Timing is critical because a beneficiary cannot roll over RMDs. Chart: Rollovers From an Eligible Retirement Plan to a Traditional IRA for a Surviving Spouse or Nonspouse The chart on pages 32 and 33 helps to explain the rules. Assume that the original owner is deceased. Conclusion The rollover rules for a surviving spouse and for a nonspouse designated beneficiary are complicated but don t give up. Seek competent advice from the plan administrator of the retirement plan, the IRA provider, or your own professional adviser. n 31 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

8 I. Two Kinds of IRAs for a Surviving Spouse II. Surviving Spouse as Owner III. Surviving Spouse as Beneficiary IRA for a Nonspouse IV. Nonspouse as Designated Beneficiary Owner or beneficiary? The surviving spouse rolls over the deceased spouse s account from an eligible retirement plan to a rollover IRA and is the owner of the rollover IRA. The surviving spouse does not roll over the deceased spouse s account and is the beneficiary of the deceased spouse s account. A nonspouse is the beneficiary of the decedent s account. Title to account? Name of the surviving spouse Name of the deceased spouse s f/b/o (for benefit of) surviving spouse Name of the decedent f/b/o (for benefit of) the nonspouse beneficiary Tax ID number? The surviving spouse s Social Security number The nonspouse beneficiary s Social Security number Additional contribution of own funds possible? Yes No No Form of rollover? Timing of rollover? The surviving spouse can either withdraw funds from the eligible retirement plan and roll them over to a new IRA within sixty days OR arrange for a direct rollover or trustee-to-trustee transfer from the eligible retirement plan to the new IRA. Anytime, but cannot roll over the RMD due in the year of rollover. The nonspouse beneficiary must arrange for a direct rollover or trusteeto-trustee transfer from an eligible retirement plan to the new IRA. The nonspouse beneficiary cannot withdraw funds first and then roll them over to a new IRA. Now permissive but mandatory for plan years beginning after December 31, Entire account can be directly rolled over in the year of the decedent s death. Entire account less the RMD for the year of rollover can be directly rolled over in the first year after the decedent s death. No rollover thereafter unless all past due RMDs are taken and the Five- Year Rule doesn t apply. 32 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

9 Timing of first RMD? The RBD of the surviving spouse is April 1 of year following the year the spouse attains age 70½. December 31 of the year following the year of the deceased spouse s death, unless an exception applies (decedent was not yet 70½) AND/OR Five-Year Rule if deceased spouse died before RBD. December 31 of the year following the year of the decedent s death before RBD AND/OR Five-Year Rule if original owner died before RBD. Table to use for RMDs? Uniform Table Single Life Table Single Life Table Income tax on rollovers? No No No Income tax on withdrawals? Yes, except to the extent of basis (that is, after-tax contributions). 10 percent additional income tax on withdrawals before age 59½? Yes, unless an exception applies under Internal Revenue Code 72(t). No, surviving spouse takes as beneficiary. No, nonspouse takes as beneficiary. Can the IRA be rolled over to an IRA (1) owned by the surviving spouse in the case of the surviving spouse or (2) in the case of the nonspouse, owned by a nonspouse? Yes Yes, surviving spouse can change his/her mind. No Advantages? Can stretch out distributions over surviving spouse s life expectancy recalculated, that is, look up the divisor in the Uniform Table each year. This is the longest stretch out. Can stretch out distributions over surviving spouse s life expectancy. Surviving spouse s life expectancy may be recalculated if the spouse is the sole beneficiary (same as Column II). Otherwise, look up the divisor in the Single Life Table one time in the year after the decedent s death and subtract one for each year thereafter. Can stretch out distributions from the IRA over the nonspouse beneficiary s life expectancy even if the retirement plan would have required that the Five- Year Rule applied, that is, that distributions be made by December 31 of the year containing the fifth anniversary of the owner s death (six years if 2009 is involved). Look up the divisor one time in the year after the decedent s death and subtract one for each year thereafter. Disadvantage? 10 percent additional tax on withdrawals if under age 59½ or if no other exception applies. Can run out of life expectancy. Can run out of life expectancy. 33 Published in Experience, Volume 19, Number 3, Summer by the American Bar Association. Reproduced with permission. All rights reserved. This

Distributions and Rollovers from

Distributions and Rollovers from Page 1 of 6 Frequently Asked Questions about Distributions and Rollovers from Retirement Accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one

More information

chart retirement plans 8 Retirement plans available to self-employed individuals include:

chart retirement plans 8 Retirement plans available to self-employed individuals include: retirement plans Contributing to retirement plans can provide you with financial security as well as reducing and/or deferring your taxes. However, there are complex rules that govern the type of plans

More information

Frequently asked questions

Frequently asked questions Page 1 of 6 Frequently asked questions Distributions and rollovers from retirement accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one of several

More information

SPOUSAL ROLLOVERS: HOW AND WHEN

SPOUSAL ROLLOVERS: HOW AND WHEN SPOUSAL ROLLOVERS: HOW AND WHEN Marcia Chadwick Holt Davis Graham & Stubbs LLP Denver, Colorado A. Spousal Rollovers: In General 1. The Rules. Both Qualified Plans and Traditional IRAs are subject to the

More information

IRAs & Roth IRAs. Beneficiary or Inherited IRAs. Questions & Answers

IRAs & Roth IRAs. Beneficiary or Inherited IRAs. Questions & Answers IRAs & Roth IRAs Beneficiary or Inherited IRAs Questions & Answers Purpose The purpose of this brochure is to provide a person who is a beneficiary of a traditional IRA (including SEPs and SIMPLEs) or

More information

Inherited IRA Information Sheet

Inherited IRA Information Sheet Inherited IRA Information Sheet Inheriting an IRA, whether it s a Traditional or Roth, raises a lot of questions. If you are reading this information sheet, the likelihood is that you are either the beneficiary

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax options for your distribution from the Plan and contains important information you will

More information

Originally Published: June 2012 Updated: August 2015!!

Originally Published: June 2012 Updated: August 2015!! Updated: August 2015 This educational publication is designed to provide a background for understanding the use of Individual Retirement Accounts (IRAs). It is not a substitute for professional tax advice.

More information

What you need to know about an Inherited IRA

What you need to know about an Inherited IRA What you need to know about an Understanding your choices and taking action. In this guide: Understand the basics Review your choices Take action Understand the Basics When the owner of an Individual

More information

Considering Inherited IRA Rollovers for Non-spouse Beneficiaries by Mark E. Griffin

Considering Inherited IRA Rollovers for Non-spouse Beneficiaries by Mark E. Griffin Considering Inherited IRA Rollovers for Non-spouse Beneficiaries by Mark E. Griffin After an employee participant in a section 403(b) contract 1 dies, the employee s entire interest in the plan must be

More information

KENTUCKY PUBLIC EMPLOYEES DEFERRED COMPENSATION AUTHORITY

KENTUCKY PUBLIC EMPLOYEES DEFERRED COMPENSATION AUTHORITY KENTUCKY PUBLIC EMPLOYEES DEFERRED COMPENSATION AUTHORITY Deemed IRA Account Withdrawal Form Instructions/Definitions (attachment to Deemed IRA Account Withdrawal Form) Rules and Conditions. For proper

More information

2. The following is substituted for the answer to the question How do I apply for a loan? in the Section entitled Loans:

2. The following is substituted for the answer to the question How do I apply for a loan? in the Section entitled Loans: TO OUR EMPLOYEES: We wish to announce that the Mission Health System Employee Retirement Plan ( Plan ) has been amended, effective June 1, 2015, to change the automatic form of benefit. Therefore, in order

More information

Death Benefit Distribution Claim Form Non-Spousal Beneficiary

Death Benefit Distribution Claim Form Non-Spousal Beneficiary Death Benefit Distribution Claim Form Non-Spousal Beneficiary READ THE ATTACHED IRS SPECIAL TAX NOTICE: IF THE PLAN ALLOWS FOR AN ANNUITY OPTION, READ THE WRITTEN EXPLANATION OF QUALIFIED JOINT AND 50%

More information

ARIZONA STATE RETIREMENT SYSTEM (ASRS) SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SURVIVOR BENEFITS

ARIZONA STATE RETIREMENT SYSTEM (ASRS) SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SURVIVOR BENEFITS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SURVIVOR BENEFITS Phoenix (602) 240-2000 Tucson (520) 239-3100 Toll-free (800) 621-3778 www.azasrs.gov FEDERAL TAX INFORMATION Introduction - This notice contains

More information

Distributions from Individual Retirement Arrangements (IRAs)

Distributions from Individual Retirement Arrangements (IRAs) Department of the Treasury Internal Revenue Service Contents What's New for 2014 1 Publication 590-B What's New for 2015 1 Cat No 66303U Reminders 2 Distributions from Individual Retirement Arrangements

More information

Taking Your Required Minimum Distributions

Taking Your Required Minimum Distributions RETIREMENT Taking Your Required Minimum Distributions A Guide for Retirement Account Owners and Beneficiaries Taking Distributions During Your Lifetime Most people are required to start withdrawing from

More information

Traditional IRAs. Understanding Required Distributions at 70 1 / 2. Questions & Answers

Traditional IRAs. Understanding Required Distributions at 70 1 / 2. Questions & Answers Traditional IRAs Understanding Required Distributions at 70 1 / 2 Questions & Answers Why are there federal tax rules mandating required minimum distributions from a traditional IRA? The primary purpose

More information

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Why is now the right time? Marginal income tax rates are relatively low on a historical basis. The sooner you do

More information

IRAs & Roth IRAs. IRA-to-IRA Rollovers & Transfers. Questions & Answers

IRAs & Roth IRAs. IRA-to-IRA Rollovers & Transfers. Questions & Answers IRAs & Roth IRAs IRA-to-IRA Rollovers & Transfers Questions & Answers Purpose: The intent of this brochure is to provide an overview of rollovers, transfers, and conversions between traditional IRAs and

More information

S I M P L E. Savings incentive match plan for employees. Participant application kit

S I M P L E. Savings incentive match plan for employees. Participant application kit S I M P L E Savings incentive match plan for employees Participant application kit SIMPLE IRA PARTICIPANT INSTRUCTIONS Follow these instructions if you are an employee whose employer has an existing SIMPLE

More information

BMO Funds State Street Bank and Trust Company Universal Individual Retirement Account Disclosure Statement. Part One: Description of Traditional IRAs

BMO Funds State Street Bank and Trust Company Universal Individual Retirement Account Disclosure Statement. Part One: Description of Traditional IRAs BMO Funds State Street Bank and Trust Company Universal Individual Retirement Account Disclosure Statement Part One: Description of Traditional IRAs Part One of the Disclosure Statement describes the rules

More information

GENERAL INCOME TAX INFORMATION

GENERAL INCOME TAX INFORMATION NEW YORK STATE TEACHERS RETIREMENT SYSTEM GENERAL INCOME TAX INFORMATION TABLE OF CONTENTS Taxes on Loans from the Annuity Savings Fund 1 (Tier 1 and 2 Members Only) Taxes on the Withdrawal of the Annuity

More information

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION.

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION. Required Minimum Distributions: What Every Advisor Needs to Know 1 Required Minimum Distributions Upon reaching age 70½, clients must begin taking annual distributions from their IRA in accordance with

More information

A. TYPES OF PLAN DISTRIBUTIONS

A. TYPES OF PLAN DISTRIBUTIONS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan savings in the Plan and contains important information you will

More information

Traditional and Roth IRAs

Traditional and Roth IRAs Traditional and Roth IRAs Information Kit, Disclosure Statement and Custodial Agreement NOT FDIC INSURED \ NO BANK GUARANTEE \ MAY LOSE VALUE FRM-IRADISC(1/11) State Street Bank and Trust Company Universal

More information

Retirement Plan Distributions

Retirement Plan Distributions Retirement Plan Distributions What Every Participant Should Know IRS Employee Plans 2 Employee Plans Landing Page 3 Employee Plans Newsletters Distribution Topics 2015 IRA one-rollover rule Pre and post-tax

More information

10 common IRA mistakes

10 common IRA mistakes 10 common mistakes Help protect your valuable retirement assets Not FDIC Insured May Lose Value No Bank Guarantee Not Insured by Any Government Agency You ve worked hard to build your retirement assets......

More information

Inherited Traditional IRAs for Non-Spouse Beneficiaries.

Inherited Traditional IRAs for Non-Spouse Beneficiaries. Rev. 9-4-2015 Inherited Traditional IRAs for Non-Spouse Beneficiaries. The Webinar will be starting shortly. 8:45am CST or 1:00pm CST Copyright 2015 Collin W. Fritz & Associates, Ltd. The Pension Specialists

More information

How much can I deduct if I am an active participant in a qualified plan?... 2

How much can I deduct if I am an active participant in a qualified plan?... 2 Table of Contents What is an Individual Retirement Account (IRA)?...................................... 1 Who may establish a Traditional IRA?............................................... 1 How much

More information

David W. Donahue ʜDavid W. Donahue, Jr., CFA

David W. Donahue ʜDavid W. Donahue, Jr., CFA David W. Donahue ʜDavid W. Donahue, Jr., CFA Much is being heard these days about the stretch IRA strategy. This idea is being suggested as the answer to the IRA and estate concerns of many investors.

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan savings in the Plan and contains important information you will

More information

IRAs & Roth IRAs. IRA-to-IRA Rollovers & Transfers

IRAs & Roth IRAs. IRA-to-IRA Rollovers & Transfers IRAs & Roth IRAs IRA-to-IRA Rollovers & Transfers In 2015 Questions & Answers Purpose: The intent of this brochure is to provide an overview of rollovers, transfers, and conversions between traditional

More information

Mailing Address: PO Box 9394 Des Moines, IA 50306-9394 Fax 1-866-704-3481

Mailing Address: PO Box 9394 Des Moines, IA 50306-9394 Fax 1-866-704-3481 Mailing Address: PO Box 9394 Des Moines, IA 50306-9394 Fax 1-866-704-3481 Principal Life Insurance Company Death Benefit Claim This form is to be completed by the beneficiary who is claiming benefits under

More information

Governmental 457(b) Application For Distribution

Governmental 457(b) Application For Distribution #1303-PS (5/14/2008) Governmental 457(b) Application For Distribution GENERAL INFORMATION Name of Plan Name of Employer Address City State Zip Name of Participant Date of Birth Complete the following section

More information

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION 1. EMPLOYEE INFORMATION (Please print) COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION Name: Address: Social Security No.: Birth Date: City: State: Zip: Termination

More information

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries Beneficiary Planning Investor Guide Design a plan for you and your beneficiaries Today is an important day. It is the day you will develop a comprehensive beneficiary plan that will let you relax, knowing

More information

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution The IRA Rollover Making Sense Out of Your Retirement Plan Distribution Expecting a Distribution? You have been a participant in your employer s retirement plan for a number of years, and you have earned

More information

Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts

Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts ab Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts This booklet contains disclosures required by federal law. a Please keep this information for future

More information

Roth IRAs The Roth IRA

Roth IRAs The Roth IRA Roth IRAs The Roth IRA 2015 and 2016 Questions & Answers What is a Roth Individual Retirement Account (Roth IRA)? A Roth IRA is a type of tax-preferred savings and investment account authorized by Internal

More information

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Purpose of a Roth IRA Conversion Contribution If a person has a traditional IRA, federal income tax laws allow

More information

State Street Bank and Trust Company Universal Individual Retirement Account Information Kit

State Street Bank and Trust Company Universal Individual Retirement Account Information Kit State Street Bank and Trust Company Universal Individual Retirement Account Information Kit The Federated Funds State Street Bank and Trust Company Universal Individual Retirement Custodial Account Instructions

More information

Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date)

Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date) Beneficiary Payment Options Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date) Frequently Asked Questions Payment Options Payment Flexibility Withholding Elections

More information

YOUR ROLLOVER OPTIONS GENERAL INFORMATION ABOUT ROLLOVERS

YOUR ROLLOVER OPTIONS GENERAL INFORMATION ABOUT ROLLOVERS SPECIAL TAX NOTICE REGARDING PAYMENTS FROM QUALIFIED PLANS YOUR ROLLOVER OPTIONS You are receiving this notice because all or a portion of a payment you are receiving from your Employer s plan (the "Plan")

More information

Table of Contents. Participant Section

Table of Contents. Participant Section Table of Contents Participant Section Introduction...1 Planning Ahead...1 Distribution Making Your Choice...2 Other Considerations...5 Joint Life and Survivor Expectancy Table...7 Single Life Expectancy

More information

2008-2012 $5,000 2013-2015 $5,500 Future years Increased by cost-of-living adjustments (in $500 increments)

2008-2012 $5,000 2013-2015 $5,500 Future years Increased by cost-of-living adjustments (in $500 increments) Part One of the Disclosure Statement describes the rules applicable to Traditional IRAs. IRAs described in these pages are called Traditional IRAs to distinguish them from the Roth IRAs, which are described

More information

Inheriting retirement assets as a nonspouse beneficiary

Inheriting retirement assets as a nonspouse beneficiary Inheriting retirement assets as a nonspouse beneficiary When you inherit IRAs or other retirement plan assets, you will have many planning and distribution considerations. Some of your decisions will be

More information

Table of contents. 2 Federal income tax rates. 12 Required minimum distributions. 4 Child credits. 13 Roths. 5 Taxes: estates, gifts, Social Security

Table of contents. 2 Federal income tax rates. 12 Required minimum distributions. 4 Child credits. 13 Roths. 5 Taxes: estates, gifts, Social Security 2015 Tax Guide Table of contents 2 Federal income tax rates 4 Child credits 5 Taxes: estates, gifts, Social Security 6 Rules on retirement plans 8 Saver s credit 12 Required minimum distributions 13 Roths

More information

BENEFICIARY PAYMENT OPTIONS

BENEFICIARY PAYMENT OPTIONS BENEFICIARY PAYMENT OPTIONS FOR ROTH IRAS TABLE OF CONTENTS INTRODUCTION................... Page 2 QUESTIONS AND ANSWERS........ Page 3 PAYMENT OPTIONS............... Page 6 Lump Sum........................

More information

A guide for managing your IRA inheritance. Maximize your inherited IRA and enhance your financial security.

A guide for managing your IRA inheritance. Maximize your inherited IRA and enhance your financial security. A guide for managing your IRA inheritance Maximize your inherited IRA and enhance your financial security. Make the most of your inheritance by taking advantage of continued tax-deferred growth potential.

More information

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Putting money into an employer s retirement plan or IRA is just the first step toward financial security in retirement. How you

More information

SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS

SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan savings in the Plan and contains important information you will

More information

TOWN OF NATICK OBRA 457 DEFERRED COMPENSATION GOVERNMENTAL PLAN DISTRIBUTION FORM

TOWN OF NATICK OBRA 457 DEFERRED COMPENSATION GOVERNMENTAL PLAN DISTRIBUTION FORM TOWN OF NATICK OBRA 457 DEFERRED COMPENSATION GOVERNMENTAL PLAN DISTRIBUTION FORM PARTICIPANT/ ALTERNATE PAYEE INFORMATION DISTRIBUTION REASON PAYMENT METHOD SPOUSE S CONSENT TO DISTRIBUTION (not applicable

More information

403(b)(7) or Texas Optional Retirement Program (ORP) distribution request

403(b)(7) or Texas Optional Retirement Program (ORP) distribution request 403(b)(7) or Texas Optional Retirement Program (ORP) distribution request Introduction Instructions Please use this form for John Hancock custodial 403(b)(7) or Texas ORP accounts. This form allows you

More information

MUNICIPAL FIRE & POLICE RETIREMENT SYSTEM OF IOWA

MUNICIPAL FIRE & POLICE RETIREMENT SYSTEM OF IOWA MUNICIPAL FIRE & POLICE RETIREMENT SYSTEM OF IOWA 7155 Lake Drive Suite 201, West Des Moines, Iowa 50266 Phone: (515) 254-9200 (888) 254-9200 Fax: (515) 254-9300 Email: pensions@mfprsi.org DROP DISTRIBUTION

More information

LOCAL 348 ANNUITY FUND 9235 4 TH AVENUE, BROOKLYN, NY 11209

LOCAL 348 ANNUITY FUND 9235 4 TH AVENUE, BROOKLYN, NY 11209 TEL. # 718-745-3487 FAX # 718-745-2976 CLAIM FOR DEATH BENEFIT INSTRUCTIONS: - Please print in ink or type. - Complete all applicable items. - Sign and have this form notarized - Attach a certified copy

More information

Withdrawal Request Form

Withdrawal Request Form Without Spousal Consent Section I: Plan Information Plan Name: Plan Sponsor Name: Section II: Participant Information **If you have a P.O. Box, U.S. tax laws require a street address to be indicated, or

More information

Extending Retirement Assets: A Stretch IRA Review

Extending Retirement Assets: A Stretch IRA Review Extending Retirement Assets: A Stretch IRA Review Are you interested in the possibility of using the funds in your traditional IRA to provide income to one or more generations of family members? Table

More information

A. TYPES OF PLAN DISTRIBUTIONS

A. TYPES OF PLAN DISTRIBUTIONS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS 1 (Alternative to IRS Safe Harbor Notice - For Participant) This notice explains how you can continue to defer federal income tax on your retirement plan savings

More information

JOINT AND SURVIVOR ANNUITY NOTICE

JOINT AND SURVIVOR ANNUITY NOTICE JOINT AND SURVIVOR ANNUITY NOTICE The purpose of this notice is to provide you as the participant and your spouse if you are married, with an explanation of the joint and survivor annuity and your rights

More information

While numerous benefits derive from saving for retirement using IRAs and

While numerous benefits derive from saving for retirement using IRAs and Chapter 67 Required Minimum Distributions and Stretching Pat Casey (Bonita Springs, Florida) While numerous benefits derive from saving for retirement using IRAs and Qualified Plans, one of the more significant

More information

Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS. 1-800-748-6128 http://stateofmi.ingplans.

Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS. 1-800-748-6128 http://stateofmi.ingplans. Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS 1-800-748-6128 http://stateofmi.ingplans.com State of Michigan 401(k) and 457 Plan Participant: You ve worked hard

More information

KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION

KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION PERTINENT INFORMATION Mr. Kugler has accumulated $1,000,000 in a traditional IRA. Mrs. Kugler is the designated beneficiary (DB) and their daughter is

More information

Know The Rules and. Avoid Costly Mistakes!

Know The Rules and. Avoid Costly Mistakes! Know The Rules and Avoid Costly Mistakes! Securities and Advisory Services offered through The Strategic Financial Alliance, Inc. ( SFA) Member FINRA, SIPC. Mark Keen is a Registered Principal and investment

More information

CITI FUND SERVICES, INC. CUSTODIAL ACCOUNT DISCLOSURE STATEMENT. MERK FUNDS Custodial Account Disclosure Statement. Part One: Traditional IRAs

CITI FUND SERVICES, INC. CUSTODIAL ACCOUNT DISCLOSURE STATEMENT. MERK FUNDS Custodial Account Disclosure Statement. Part One: Traditional IRAs MERK FUNDS Custodial Account Disclosure Statement This Custodial Account Disclosure Statement ( Disclosure Statement ) applies to Traditional Individual Retirement Accounts ( IRAs ), Roth IRAs and Coverdell

More information

IRAs & Roth IRAs. IRA Opportunities. Contribution Limits For 2014 and 2015. Questions & Answers

IRAs & Roth IRAs. IRA Opportunities. Contribution Limits For 2014 and 2015. Questions & Answers IRAs & Roth IRAs IRA Opportunities Contribution Limits For 2014 and 2015 Questions & Answers What is the purpose of this brochure? It explains the basic tax rules for traditional IRAs and Roth IRAs. TRADITIONAL

More information

Preserving Retirement Assets: An IRA Rollover Review

Preserving Retirement Assets: An IRA Rollover Review Preserving Retirement Assets: An IRA Rollover Review How will you replace your income when you retire? What will happen to your standard of living when your income ceases at retirement? Table of Contents

More information

What are my options if I inherit an IRA or benefit from an employer-sponsored plan?

What are my options if I inherit an IRA or benefit from an employer-sponsored plan? Ebert Associates What are my options if I inherit an IRA or benefit from an employer-sponsored plan? Answer: If you don't want the money, you can always disclaim (refuse to accept) the inherited IRA or

More information

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans WSU Accounting & Auditing Conference Tuesday, May 20, 2014 Presented By: Steven P. Smith Hinkle Law Firm LLC 301

More information

Facts to Know When You Inherit a Non-Spousal IRA

Facts to Know When You Inherit a Non-Spousal IRA Facts to Know When You Inherit a Non-Spousal IRA There are many planning and distribution considerations for individuals inheriting a non-spouse s IRA (Traditional, Roth, SEP or SIMPLE). It is imperative

More information

NOTICE OF HARDSHIP WITHDRAWAL

NOTICE OF HARDSHIP WITHDRAWAL NOTICE OF HARDSHIP WITHDRAWAL The current Plan provides that certain amounts may be withdrawn if you have a financial hardship. This hardship distribution is not in addition to your other benefits and

More information

Roth Conversion Frequently Asked Questions

Roth Conversion Frequently Asked Questions Roth Conversion Frequently Asked Questions Brian Dobbis QPA, QKA, QPFC Retirement Analyst, Private Wealth Group 888-522-2388 A Roth individual retirement account (IRA) is a tax-deferred and potentially

More information

Distribution Options. For Defined Contribution and 403(b) Plans Without Life Annuities

Distribution Options. For Defined Contribution and 403(b) Plans Without Life Annuities Distribution Options For Defined Contribution and 403(b) Plans Without Life Annuities Take the Time to Decide What will you do with your retirement savings? Life is full of changes. We retire. We change

More information

Important Tax Information About Payments From Your TSP Account

Important Tax Information About Payments From Your TSP Account Important Tax Information About Payments From Your TSP Account Before you decide how to receive the money in your Thrift Savings Plan (TSP) account, you should review the important information in this

More information

The Advantages of a Stretch IRA

The Advantages of a Stretch IRA Lifetime Retirement Planning with Wachovia Securities. The Advantages of a Stretch IRA Much is being heard these days about a concept called the Stretch IRA. This phrase is bandied about as being the answer

More information

the t. rowe price Guide for IRA and 403(b) Account Beneficiaries

the t. rowe price Guide for IRA and 403(b) Account Beneficiaries the t. rowe price Guide for IRA and 403(b) Account Beneficiaries who should use this guide T. Rowe Price retirement specialists have designed this guide for: 1 : Individuals who are beneficiaries of the

More information

From Mark Andres. Blommer Peterman, S.C.

From Mark Andres. Blommer Peterman, S.C. Using Trusts to Protect Inherited IRAs Volume 8, Issue 3 Many clients have large IRAs and retirement plan accounts and need special estate planning for these assets. A 2009 study by the Investment Company

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (QDRO Alternate Payee) i A. TYPES OF PLAN DISTRIBUTIONS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (QDRO Alternate Payee) i A. TYPES OF PLAN DISTRIBUTIONS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (QDRO Alternate Payee) i This notice explains how you can continue to defer federal income tax options for your QDRO distribution from the Plan under a qualified

More information

Janus Qualified Retirement Accounts Distribution Form

Janus Qualified Retirement Accounts Distribution Form Janus Qualified Retirement Accounts Distribution Janus Qualified PO Box 55932 Form Retirement Accounts Distribution Form Boston, MA 02205-5932 800-525-1093 PO Box 55932 Boston, MA 02205-5932 800-525-1093

More information

Hardship distributions. A hardship distribution is not eligible for rollover.

Hardship distributions. A hardship distribution is not eligible for rollover. SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS 1 (Alternative to IRS Safe Harbor Notice - For Participant) This notice explains how you can continue to defer federal income tax on your retirement plan savings

More information

Special Tax Notice Regarding Annuity Fund Payments

Special Tax Notice Regarding Annuity Fund Payments (631) 952-9700 1-877-372-3236 www.nrccf.org 270 Motor Pkwy. Suite 2, Hauppauge, NY 11788-5150 Special Tax Notice Regarding Annuity Fund Payments This notice contains important information you will need

More information

Schwab Individual 401(k) Plan Summary Plan Description

Schwab Individual 401(k) Plan Summary Plan Description Schwab Individual 401(k) Plan Summary Plan Description Employer Instructions 1. Complete the Summary Plan Description (SPD) in accordance with the elections you made on the Adoption Agreement. 2. Provide

More information

To: Plan Member From: Service Center Subject: Age 59½ Withdrawal Request ELCA Retirement Plan

To: Plan Member From: Service Center Subject: Age 59½ Withdrawal Request ELCA Retirement Plan To: Plan Member From: Service Center Subject: Age 59½ Withdrawal Request ELCA Retirement Plan Enclosed is the information you requested regarding making a withdrawal from your ELCA Retirement Plan account.

More information

Franklin Templeton Retirement Plan Beneficiary Distribution Request

Franklin Templeton Retirement Plan Beneficiary Distribution Request Franklin Templeton Retirement Plan Beneficiary Distribution Request For assistance, please call your financial advisor or Franklin Templeton Retirement Services at 1-800/527-2020. 1 PARTICIPANT (DECEDENT)

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SAFE HARBOR EXPLANATION FOR PLANS QUALIFIED UNDER SECTION 401(a) OR SECTION 403(b) TAX SHELTERED ANNUITIES BENCOR PLAN SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue

More information

Complex Planning with IRAs

Complex Planning with IRAs 2013 Advanced Elder Law Review: November 5-6 Washington, DC Complex Planning with IRAs Materials Prepared by: Stephen C. Hartnett, J.D., LL.M. (in Taxation); Dennis Sandoval, CELA Updated and Presented

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (Alternative to IRS Safe Harbor Notice - For Participant)

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (Alternative to IRS Safe Harbor Notice - For Participant) SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS (Alternative to IRS Safe Harbor Notice - For Participant) This notice explains how you can continue to defer federal income tax on your retirement plan savings

More information

Traditional Individual Retirement Account Disclosure Statement

Traditional Individual Retirement Account Disclosure Statement Traditional Individual Retirement Account Disclosure Statement This Disclosure Statement contains important information about traditional Individual Retirement Accounts ( traditional IRA ) described in

More information

Roth IRAs. Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers Purpose of a Roth IRA Conversion Contribution If a person has a traditional IRA, federal income tax laws allow you

More information

Base Plan Account Withdrawal

Base Plan Account Withdrawal Base Plan Account Withdrawal Purpose of the Form Use this form to choose how you want PERSI to handle the withdrawal of your PERSI Base Plan contributions and interest when you terminate employment with

More information

Roth Individual Retirement Account Disclosure Statement

Roth Individual Retirement Account Disclosure Statement Roth Individual Retirement Account Disclosure Statement This Disclosure Statement contains important information about traditional Individual Retirement Accounts ( traditional IRA ) described in Section

More information

QP/401(k) Separation From Service Distribution Request Form

QP/401(k) Separation From Service Distribution Request Form #10486 (3/2004) QP/401(k) Separation From Service Distribution Request Form This form may be used if you have separated from service due to termination, disability or attainment of normal retirement age

More information

Roth IRAs The Roth IRA

Roth IRAs The Roth IRA Roth IRAs The Roth IRA 2014 and 2015 Questions & Answers What is a Roth Individual Retirement Account (Roth IRA)? A Roth IRA is a type of tax-preferred savings and investment account authorized by Internal

More information

AMENDMENT TO YOUR TRADITIONAL IRA

AMENDMENT TO YOUR TRADITIONAL IRA INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT AMENDMENT This disclosure statement explains the rules governing a Traditional IRA. The term IRA will be used in this disclosure statement to refer to

More information

TRADITIONAL IRA DISCLOSURE STATEMENT

TRADITIONAL IRA DISCLOSURE STATEMENT TRADITIONAL IRA DISCLOSURE STATEMENT TABLE OF CONTENTS REVOCATION OF ACCOUNT... 1 STATUTORY REQUIREMENTS... 1 (1) Qualification Requirements... 1 (2) Required Distribution Rules... 1 (3) Approved Form....

More information

DISTRIBUTION REQUEST FORM

DISTRIBUTION REQUEST FORM DISTRIBUTION REQUEST FORM Previously, there was little oversight regarding the withdrawal of money from 403(b) plans. The recent law changes now apply sanctions on Plans that do not carefully monitor and

More information

Minimum Distributions & Beneficiary Designations: Planning Opportunities

Minimum Distributions & Beneficiary Designations: Planning Opportunities 28 $ $ $ RETIREMENT PLANS The rules regarding distributions and designated beneficiaries are complex, but there are strategies that will help minimize income and estate taxes. Minimum Distributions & Beneficiary

More information

DISCLOSURE STATEMENT

DISCLOSURE STATEMENT DISCLOSURE STATEMENT for Individual Retirement Annuities Home Office: Wilmington, Delaware Administrative Office: P.O. Box 19032 Greenville, SC 29602-9032 Telephone 866-262-1161 The following information

More information

ROLLOVERS FROM QUALIFIED RETIREMENT PLANS AND IRAS: A PRIMER

ROLLOVERS FROM QUALIFIED RETIREMENT PLANS AND IRAS: A PRIMER ROLLOVERS FROM QUALIFIED RETIREMENT PLANS AND IRAS: A PRIMER Louis A. Mezzullo Luce, Forward, Hamilton & Scripps LLP Rancho Santa Fe, CA lmezzullo@luce.com (October 21, 2011) TABLE OF CONTENTS Page I.

More information

FINANCIAL FITNESS WITHDRAWALS FROM INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) Fact Sheet

FINANCIAL FITNESS WITHDRAWALS FROM INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) Fact Sheet FINANCIAL FITNESS Fact Sheet August 2000 FL/FF-06 WITHDRAWALS FROM INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) Barbara R. Rowe, Ph.D. Professor and Family Resource Management Extension Specialist Utah State

More information