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Week 6 : IRA & Retirement Plan Distributions

IRA, 401K, 403b and 457 Plans are assets that have unique tax rules called “Income in Respect of the Decedent (IRD)” to the beneficiary(s) of your plan. Whatever you distribute is subject to California income tax and Federal income tax and it is taxed at the person’s effective tax rate for that tax year.

There are many opportunities for planning with IRD assets however most beneficiaries spend this money no matter the value within 18 months. The only beneficiary entity that does not have to pay an income tax is a charitable organization. Therefore, if you want to give to a charity in a tax wise manner, make the charity(s) a beneficiary of a commercial annuity or an IRA. You can also name a charity and have the charity give your son or daughter a charitable gift annuity for the rest of their lives and upon their death(s) the charity can use the money.

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OUTLINE:

Outline – IYE Week 6 – IRA and Retirement Plans – Michael A. Simon
Outline – IYE Week 6 – Planning – Retirement Plan Benefits – Bradley S. Erdosi

DOCUMENTS & ARTICLES:

IRA Giving Goes Permanent
State Taxes Can Add Up
IRA and 401(K) designated beneficiary options
IRA mistakes even expert investors can make
Avoid beneficiary designation errors
Inherited IRAs – a Sweet Deal
Learning the Hard Way About Re-Investing Inherited IRAs

Roth 401(k) vs. traditional 401(k) – No contest
IRA in a LIving Trust
Is a Roth IRA Safe From Taxes
Beware the Beneficiary Form
Roth IRA Conversion – NAPFA Planning Perspectives
Market Woes Open Door for Roth Conversions

WORKSHOP VIDEOS:

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:

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