Your Retirement Companion

1.  Types of Retirement Plans

• Qualified Plans
• Individual Retirement Accounts
• Almost-Qualified Plans
• Nonqualified Plans

2.  An Overview of Tax Rules

• Taxation Fundamentals
• General Income Tax Rules for Retirement Plans
• Income Tax on Qualified Plans and Qualified Annuities
• Special Income Tax Rules for Tax-Deferred Annuities
• Special Income Tax Rules for IRAs
• How Penalties Can Guide Planning

3.  Early Distributions: Taking Your Money Out Before the Law Allows

• Exceptions to the Early Distribution Tax
• Calculating the Tax
• Reporting the Tax
• Special Rules for IRAs

4.  Substantially Equal Periodic Payments

• Computing Periodic Payments
• Implementing and Reporting Your Decision
• Modifying the Payments

5.  Required Distributions: Taking Money Out When You Have To

• Required Distributions During Your Lifetime
• Death Before Required Beginning Date
• Death After Required Beginning Date
• Special Rules for Tax-Deferred Annuities
• Special Rules for Roth IRAs
• Penalty
• Reporting the Penalty
• Waiver

6.  Required Distributions During Your Lifetime

• Required Beginning Date
• Computing the Required Amount
• Designating a Beneficiary
• Special Rules for Annuities
• Divorce or Separation

7.  Distributions to Your Beneficiary If You Die Before Age 70½

• Determining the Designated Beneficiary
• Distribution Methods
• Designating Beneficiary
• Eligible Designated Beneficiary
• No Designated Beneficiary
• Multiple Beneficiaries, Separate Accounts
• Multiple Beneficiaries, One Account
• Trust Beneficiary
• Estate as Beneficiary
• Annuities
• Divorce or Separation
• Reporting Distributions From IRAs

8.  Distributions to Your Beneficiary If You Die After Age 70½

• Administrative Details
• Distribution Method
• Designated Beneficiary
• No Designated Beneficiary
• Multiple Beneficiaries, Separate Accounts
• Multiple Beneficiaries, One Account
• Trust Beneficiary
• Estate as Beneficiary
• Annuities
• Divorce or Separation

9.  Roth IRAs

• Taxation of Distributions
• Early Distribution Tax
• Ordering of Distributions
• Required Distributions

10.  Roth 401(k) Plans

• Taxation of Distributions
• Early Distribution Tax
• Ordering of Distributions
• Required Distributions

Appendixes

A:  IRS Forms, Notices, and Schedules

• Certification for Late Rollover Contribution
• Form 4972, Tax on Lump-Sum Distributions
• Tax Rate Schedule for 1986
• Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
• Form 5330, Return of Excise Taxes Related to Employee Benefit Plans
• Form 5498, IRA Contribution Information
• Form 8606, Nondeductible IRAs
• Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments
• Revenue Ruling 2002-62

B:  Life Expectancy Tables

• Table I: Single Life Expectancy
• Table II: Joint Life and Last Survivor Expectancy
• Table III: Uniform Lifetime Table
• Table IV:  Survivor Benefit Limits

C: Life Expectancy Tables for 2022 and Later

• Table I: Single Life Expectancy
• Table II: Joint Life and Last Survivor Expectancy
• Table III: Uniform Lifetime Table
• Table IV: Survivor Benefit Limits

 Index

Your Retirement Companion

Let’s start with the basics. There are many kinds of retirement plans and many possible sources for owning one. This book is about how to take money out of your retirement plans.

You might have a retirement plan at work, an IRA that you set up yourself, or a plan or an IRA you’ve inherited. Or you might have all three. You might still be contributing to a plan, or you may be retired. No matter what your situation, you will find information in this book to help you through the minefield of rules.

There are many reasons to take money out of a retirement plan. You might want to borrow the money for an emergency and pay it back (or not). Maybe you quit your job and you want to take your share of the company’s plan. Perhaps you’re required by law to withdraw some of your retirement funds because you’ve reached a certain age.

Whatever your situation, you probably have a lot of questions about your plan and how to take money out of it. This book can answer:

• How do I know what kind of retirement plan I have? (See Chapter 1.)
• Do I have to wait until I retire to get money out of my plan or my IRA? (See Chapter 3.)
• Can I borrow money from my 401(k) plan to buy a house? (See Chapters 3, 4, and 5.)
• What should I do with my retirement plan when I leave my company or retire? (See Chapter 2.)
• When do I have to start taking money out of my IRA? (See Chapter 5.)
• How do I calculate how much I have to take? (See Chapter 6.)
• Can I take more than the required amount? (See Chapter 6.)
• What happens to my retirement plan when I die? (See Chapters 7 and 8.)
• Can my spouse roll over my IRA when I die? (See Chapters 7 and 8.)
• What about my children? Can they put my IRA in their names after I die? Do they have to take all the money out of the account right away? (See Chapters 7 and 8.)
• If I inherit a retirement plan, can I add my own money to it? Can I save it for my own children, if I don’t need the money? (See Chapters 7 and 8.)
• Am I allowed to set up a Roth IRA? Should I? (See Chapter 9.)
• Can I convert my regular IRA to a Roth IRA? Should I? (See Chapter 9.)
• How is a Roth 401(k) plan different from a Roth IRA? (See Chapter 10.)

To help you answer these and other questions, we include many examples to guide you through the decision-making process and take you through calculations. You will also find sample tax forms that the IRS requires, along with instructions for how to complete them.

This book contains tables to help you calculate distributions. It also contains sample letters and worksheets you can use to communicate with the IRS or with the custodian of your IRA or retirement plan. We’ve even included some important IRS notices so you can read firsthand how the IRS thinks about certain critical issues.

The tax rules for pensions, IRAs, 401(k)s, and other types of retirement plans are notoriously complex, which can be all the more frustrating because they are important to so many people. The good news is that help is here: This book makes the rules clear and accessible.

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