Income Tax Burdens for the Non-Spouse Beneficiary: Perils of Failing to Roll a 401k into an IRA Green Valley AZ
After your death, your spouse and/or your children could continue to defer income taxes for many years after your death, as long as they are prudent and only take the annual minimum required distributions mandated by law.
Cogan Terry B CPA
(520) 648-2990
3290 S Camino Del Sol
Green Valley, AZ
Cogan Terry B CPA
(520) 648-2990
3290 S Camino Del Sol
Green Valley, AZ 85622
Data Provided by:
Jackson Hewitt
(520) 320-1040
2955 West Valencia Road, Ste 131
Tucson, AZ
Jackson Hewitt
(520) 320-1040
2955 West Valencia Road, Ste 131
Tucson, AZ 85746
Data Provided by:
Victoria Coletti (RFC®), CFP
520-818-9416
38702 S Starwood Drive
Tucson, AZ
Victoria Coletti (RFC®), CFP
520-818-9416
38702 S Starwood Drive
Tucson, AZ 85739
Company
Design Capital Planning Group, Inc.
Qualifications
Education: AA
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Retirement Planning, Tax Planning, Tax Returns, Seminars Work, Mortgage Loans, Collectable Coins , Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Compensation Plans
Data Provided by:
Jeffrey Biro
6900 E. Camelback Rd.
Scottsdale, AZ
Jeffrey Biro
6900 E. Camelback Rd.
Scottsdale, AZ 85251
Company
Title: President
Company: Family Wealth Advisors
Type
Investment Advisor Rep: Yes
Education
Double Bachelor's
Master's (abt)
Years Experience
Years Experience: 28
Service
Portfolio Engineering,Pension for Highly Compensated Owners,Stock Market Alternative,Wealth Management,Disability Insurance,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Business Succession & Liquidation Planning,Estate Tax Planning,Asset Protection Strategies & Planning,Individual Income Tax Planning,Fee Only Portfolio Management,Mortgage Refinancing,IRA, 401k, Roth IRA, QDRO Rollovers,CD Alternative,Medicare Planning,Life Insurance,Investment & Portfolio
Data Provided by:
Jeff Vogan
2929 N. Power Road, Ste 101
Mesa, AZ
Jeff Vogan
2929 N. Power Road, Ste 101
Mesa, AZ 85215
Company
Title: RFC, IAR
Company: Premiere Retirement Planning
Service
Stock Market Alternative,Wealth Management,Annuities,Investment Consulting & Allocation Design,Retirement Income Distribution Planning,Individual Income Tax Planning,High Yield Bank Accounts,IRA, 401k, Roth IRA, QDRO Rollovers,CD Alternative,Life Insurance,Investment & Portfolio Management,Estate Tax Planning,Asset Protection Strategies & Planning,Fee Only Portfolio Management,401k Rollover From Employer,Income for Life/ Preserve Principal,Alternative Investments,Retirement Planning,Annuity Idea
Data Provided by:
H&R Block
(520) 625-8732
210 W CONTINENTAL RD STE 124
GREEN VALLEY, AZ
H&R Block
(520) 625-8732
210 W CONTINENTAL RD STE 124
GREEN VALLEY, AZ 85614
Data Provided by:
Ray Cerimeli
960 Oxford Lane
Chandler, AZ
Ray Cerimeli
960 Oxford Lane
Chandler, AZ 85225
Company
Title: Financial Service Consultant
Service
Disability Insurance,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Life Insurance,Investment & Portfolio Management,Long-Term Health Care Planning,Business Succession & Liquidation Planning,Estate Tax Planning,Asset Protection Strategies & Planning,Individual Income Tax Planning,Health Care Insurance,Retirement Planning,Real Estate Investm
Data Provided by:
Mr. Stuart J. Spivak (RFC®), LUTCF
480 556 9931, 610 668 7682
8160 E Butherus Dr #5
Scottsdale, AZ
Mr. Stuart J. Spivak (RFC®), LUTCF
480 556 9931, 610 668 7682
8160 E Butherus Dr #5
Scottsdale, AZ 85260
Company
The Spivak Financial Group
Qualifications
Education: 1987 Graduate of Pennsylvania State University, State College, PA.
Years of Experience: 23
Membership
IARFC, MDRT, NAPFA, NAIFA
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Pension Planning, Executive Compensation Planning, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Education Plan, Healthcare Accounts, Asset Protection, BuySell
Data Provided by:
Mr. Daniel J. Trotta (RFC®), MBA
480-626-8089
10105 E Via Linda Dr #103-324
Scottsdale, AZ
Mr. Daniel J. Trotta (RFC®), MBA
480-626-8089
10105 E Via Linda Dr #103-324
Scottsdale, AZ 85258
Company
Choice Benefits Inc.
Qualifications
Education: MA.Ed, University of Phoenix;MBA, Roosevelt University; BBA, Walsh College;AAS, Scottsdale Community College
Years of Experience: 16
Services
Invoice, Estate Planning, Business Planning, Pension Planning, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Business Coach, Charitable Planning, Education Plan, Healthcare Accounts, BuySell
Data Provided by:
Mr. Jeffrey J. Biro (RFC®), CEP
480 969 5667
6900 E. Camelback Road, Suite A-39
Scottsdale, AZ
Mr. Jeffrey J. Biro (RFC®), CEP
480 969 5667
6900 E. Camelback Road, Suite A-39
Scottsdale, AZ 85251
Company
Family Wealth Advisors
Qualifications
Education: BA, MA(abt)
Years of Experience: 30
Membership
IARFC, MDRT, FPA, SFSP, NAIFA, GAMA, NICEP
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Executive Compensation Planning, Retirement Planning, Medicaid Planning, Tax Planning, Seminars Work, Employee Benefits, Mutual Funds, Mortgage Loans, CD Banking, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Auto Home Insurance, Charitable Planning, Education Plan, LiabCover, Compensation Plans
Data Provided by:
Provided By: 
Money, Taxes & Small Business
Income Tax Burdens For the Non-Spouse Beneficiary: Perils of Failing to Roll a 401k into an IRA
By James Lange
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Have you heard about a stretch IRA and wondered if it was some special kind of IRA? Well, it isn t. In the simplest terms, a stretch IRA is an IRA that has a beneficiary designation that provides for the possibility of maintaining the tax deferred status of the IRA after the death of the IRA owner. You might be thinking, I wish I had a stretch IRA. I only named my spouse as my primary beneficiary and my kids as my successor or contingent beneficiary. Well, guess what? You have a stretch IRA. After your death, your spouse and/or your children could continue to defer income taxes for many years after your death, as long as they are prudent and only take the annual minimum required distributions mandated by law.
While the stretch concept applies to some retirement plans, many heirs of 401k owners could be in for a rude awakening if their parents fail to plan properly.
With proper planning you can put in place the mechanisms to stretch taxable distributions from an inherited IRA and certain retirement plans for decades, sometimes as long as 80 years after the original owner dies. If, however, the employer s retirement plan document stipulates the wrong provisions, the stretch may be replaced by a screaming income tax disaster. The heirs could be in for a tax nightmare if Dad never transferred his retirement plan into an IRA.
Many investors fail to realize that the specific plan rules that govern their individual 401k or other retirement plan take precedence over the IRS distribution rules for inherited IRAs or retirement plans.
The distribution rules that come into play at the death of the retirement plan owner are usually found in a plan document that few employees or advisors ever read. Many, if not most plan documents say that in the event of death, a non-spouse beneficiary must receive (and pay tax on) the entire balance of the retirement plan the year after the death of the retirement plan owner. These retirement plans don t allow a non-spouse beneficiary to stretch distributions. For example, if there is a $1 million balance, the non-spouse heir or heirs will have to pay income taxes on $1 million. Then, the remaining balance, roughly $650,000 ($1 million minus the $350,000 immediate income tax hit) would be outside of the tax-deferred protection of an inherited IRA.
Had the 401k participants taken that money and transferred it into an IRA before he died, the non-spouse beneficiary would have been able to stretch the distributions based on his or her life expectancy. Failing to make the IRA transfer will result in an unnecessary massive income tax burden for the non-spouse beneficiary.
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Top IRA expert and author of Retire Secure !, James Lan...
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