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Jackson & Campbell, P.C.
Attorneys and Counselors at Law
Office Locations:
Washington, D.C.
Vienna, VA
Baltimore, MD
Rockville, MD
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DISCLAIMER: Use of this website does
not create an attorney-client relationship.
This publication does not constitute
legal, accounting or other professional advice. Although it is intended to
be accurate, neither the publisher nor any other party assumes liability
for loss or damage due to reliance on this material.
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Trusts & Estates |
Volume 2, Issue 8, August 2010
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QUICK TIP
Retirement Distribution Help
If you want to watch your computer melt before your very eyes,
then use your favorite internet search engine to search the world wide web for
information about “retirement distribution planning.” You will register in
excess of 640,000 hits! That can be overwhelming, especially when you are
looking for practical, plain-English answers.
Here are three tips to help you navigate these important decisions. First, since
your retirement funds represent just that–your retirement funds–be very
selective regarding the financial advisors you hire to help you make it last
(and maybe even grow). If you do not have a financial advisor, contact us and we
will help you make the right connections. Second, make sure your estate plan is
coordinated with your financial plan ... and that both are coordinated with your
retirement distribution plan. Third, and finally, do not try to go it alone when
it comes to these important decisions. Otherwise, you may pay too much in taxes,
disinherit your loved ones or even run out of money.
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ONLINE QUIZ
 Ask Yourself These Important Questions About
"
Beneficiary
Designations."
"
Click Here to Start.
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Estate Planning and Qualified Retirement Plan Assets
Beneficiary Designations 101
 There are two things you should never watch while they are being made: one is sausage and the other is tax law. The same can be said of most tax law changes. They often result in more complex rules and regulations, not to mention stiff penalties for non-compliance.
That said, the IRS has simplified its regulations governing distributions from IRAs and other qualified retirement plans (QRPs) in recent years. In form, these final regs are intended to liberalize and lengthen payout options during the lifetimes of plan participants and, after their deaths, for their designated beneficiaries under such plans. In substance, however, there are many common pitfalls you need to avoid regarding the designation of beneficiaries for your QRP … or your retirement assets may either plunge into the tax abyss quicker than otherwise required, or even wind up with the wrong beneficiary.
Disclaimer: This article is not an exhaustive treatise on this subject matter. Consider it a brief primer regarding the unique nature of QRPs and an advance warning to avoid two common pitfalls regarding their post-mortem transfer.
Learn more about choosing a
beneficiary when it comes to your qualified retirement plan...
Pension Maximization
 That long-awaited day will soon be a reality. Yes, your retirement ship is almost ready to set sail. Before you climb aboard, however, there are a few crucial decisions to make regarding your pension, especially if you are married. To assist you in this process, we will consider your general options, propose a common win-win alternative and then temper that alternative solution with some due diligence.
Defined Benefit Plans: Your General Options
If you have a defined benefit plan (i.e., a retirement plan through your employer that will pay a monthly income to you), then you will be asked how you want the payouts calculated. For example, do you want payouts to be calculated to last as long as you live (single life option) or until the later of your death or the death of your spouse (joint and survivor option)? This decision must be weighed very carefully.
If you choose a single life option, then the monthly payout will be higher … but it will end upon your death. This could leave your surviving spouse without needed income. On the other hand, if you choose the joint and survivor option, then the monthly payout will be reduced to cover the actuarial risk of the payouts extending over an additional life. Nevertheless, with the joint and survivor option, if your spouse predeceases you, then you are stuck with the lower payout for the rest of your life.
Read on for the proper steps
to take to maximize your pension payment...
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