What are my lump sum distribution options?

You've spent a long time accumulating funds in your retirement account. When you retire and take distribution of your funds you have many options to consider.
Personal Information
Client Name  
Advisor Name  
Plan Information
Your current age 
Anticipated distribution amount ($) 
Is distribution due to a disability? 
Is distribution due to separation of services? 
Income Tax Information
Tax filing status? 
Anticipated taxable income this year excluding distribution ($) 
Retirement Information
Anticipated retirement age 
Rate Assumptions
Before tax return on savings (%)help
Anticipated federal tax rate (%)help
Anticipated state tax rate (%) 

Converting a traditional IRA or rollover retirement plan account to a Roth IRA will generally require the payment of both state and federal income taxes on the taxable portion of the dollars converted. Utilizing the proceeds of the traditional IRA or rollover account, unless you are over age 59 ½, can result in the payment of an additional federal penalty of 10% on the taxable portion used to pay the taxes. Additionally underpayment of taxes, irrespective of whether outside assets or traditional IRA proceeds will be utilized to pay the taxes due, can result in additional penalty taxes if there is insufficient tax withholding. Individuals converting a traditional IRA or a retirement plan rollover account to a Roth IRA should review the payment of estimated taxes with their tax adviser.

Traditional IRA contributions plus earnings, interest, dividends, and capital gains may compound tax-deferred until you withdraw them as retirement income. Amounts withdrawn from traditional IRA plans are generally included as taxable income in the year received and may be subject to 10% federal tax penalties if withdrawn prior to age 59 1/2, unless an exception applies.

A Roth IRA is a tax-deferred and potentially tax-free savings plan available to all working individuals and their spouses who meet the IRS income requirements. Distributions, including accumulated earnings, may be made tax-free if the account has been held at least five years and the individual is at least 59 1/2, or if any of the IRS exceptions apply. Contributions to a Roth IRA are not tax deductible, but withdrawals during retirement are generally tax-free.

The use of the calculators are provided for educational purposes only and is not meant as legal tax, estate planning or investment advice. Lord Abbett does not provide legal, tax or investment advice. The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, is not individualized and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions. Lord Abbett cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. The results of these calculations are estimates based solely on user input and the assumptions of the calculator program. All examples are hypothetical and intended for illustrative purposes only. Lord Abbett makes no warranties with regard to such information or results obtained by its use. Lord Abbett disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Investment results do not represent the future performance of any Lord Abbett funds. You should consult with your legal or tax advisor before making any investment decision.

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