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Life and Death Planning for Retirement Benefits
along with each other or if not all of them are individuals, or if they are individuals of substantially
different ages. See
¶ 7.2.02 (D)
, ¶ 1.8.02 .At one time, keeping “rollover” IRAs separate from “contributory” IRAs enabled the
participant to roll the “rollover IRA” into a QRP. This reason for keeping separate IRAs was
eliminated years ago; se
e ¶ 2.6.02 .But there is still a difference—a “pure” rollover IRA (one that
contains only rollovers from QRPs and 403(b) plans, and no “regular” contributions) has greater
protection in bankruptcy than a “contributory” IRA.
See
¶ 2.7.02for reasons why a client might want to leave funds in (or transfer funds to) a
particular
type
of retirement plan, even if that would mean having multiple plans and IRAs.
2.7.05
How to take RMDs and other distributions
Use extra voluntary income tax withholding from a retirement plan distribution to avoid a
penalty on underpayment of estimated taxes. See
¶ 2.3.05 .Using the permissive aggregation of accounts for RMD purposes, take each year’s IRA
RMDs from the smallest account(s) first, to close them out and consolidate.
Save commissions! Take RMDs in kind rather than selling the asset inside the plan to take
cash.