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Show Guarantee Golden Years by maximizing use of retirement income lover. Like a regular IRA, you may begin be-gin to take distribution from the IRA Rollover without penalty, after af-ter you reach age 59'2. Also you may begin withdrawals prior to age 59'A without penalty if you take payments based on your life expectancy expec-tancy and do not change the payments pay-ments for five years or prior to age 59-2. The IRA Rollover, in short, offers you a rare opportunity to maximize your retirement dollars. You can continue building your nest egg after you've received a lump sum distribution because the earnings on your deposit accumulate accumu-late tax-deferred. If you choose not to roll over your lump sum distribution, you must pay tax on the proceeds of the distribution for the year in which it is received. However, depending on the reason for the distribution, the number of years you've participated partici-pated in the plan and your age, you may be eligible for favorable federal feder-al tax treatment. That is, under certain circumstances, circumst-ances, you are allowed to pay a one-time tax on the distribution as though it had been received over a five-year or 10-year period ("income ("in-come averaging"). Also, certain contributions made prior to 1974 may be eligible for long-term capital capit-al gains treatment. Be aware that tax reform substantially sub-stantially changed the rules regarding regard-ing who is eligible for income averaging. aver-aging. If you are not eligible, you will have to pay ordinary tax on the distribution and you may be subject to a 10 percent penalty tax if you are under age 59Vi. Therefore, before you make a decision you should seek the advice of your tax adviser and financial consultant. Editor's Note: Charles Baker is a longtime long-time resident of Woods Cross and is a financial consultant at Shearson Lehman Hutton in Salt Lake City. By CHARLES BAKER . One important way to ensure that your retirement years are truly "golden years" is to plan your retirement re-tirement income early. One of your key decisions will be what to do if you've accumulated substantial capital in a retirement plan and are . about to receive a check for the entire en-tire amount. This situation a lump sum distribution dis-tribution from a qualified retirement retire-ment plan occurs in several instances, inst-ances, including retirement or termination ter-mination of a plan. Your decision Qiuld be the difference between aximizing your retirement plan : dollars or "donating" a healthy portion to Uncle Sam. You basically have two choices when faced with a lump sum distribution: distri-bution: Pay taxes when you receive the distribution and keep what's left. (Of course, this decreases the ; money you've built up for your retirement re-tirement years.) Defer taxation by placing the distribution in an IRA Rollover within 60 days from receipt of your : distribution. The latter alternative is an ideal way to keep all your retirement ' ; assets working for you. An IRA Rollover has several tax advan- tages: You pay no current tax oni ; the amount of the distribution rolled rol-led over into the IRA, including any ; unrealized appreciation, and all future fu-ture earnings grow tax-deferred , thus allowing you to build greater wealth. If you choose this alternative, : you may roll over your total distribution distri-bution minus your own after-tax contributions. In other words, if you and your employer both contributed contri-buted to the plan and earnings ". accrued on those combined contri-; contri-; butions, you may roll over every-: every-: thing except the amount you put ; into the plan on which you've already paid taxes. Frequently, a lump sum distribution distribu-tion will consist of both cash and : securities. If you open an IRA Rollover Rol-lover with a brokerage firm, you may roll over the securities as well ' as the cash. This allows you to decide de-cide the best time to sell the secur-: secur-: ities. Most banks, however, will re-' re-' quire you to sell the securities and deposit only cash to the IRA Rol- |