Tax Planning for Retirees

Minimum Distribution From Tax-Favored Retirement Plans

  • § 8.01 Overview of Required Minimum Distributions
  • —–[1] Required Beginning Date for Minimum Distributions (RBD)
  • —–[2] Minimum Distribution Requirements for Annuities
  • —–[3] Minimum Distribution Requirements for Non-Annuities
  • —–[4] Distributions Not Taken into Account
  • —–[5] Distribution Under a QDRO
  • —–[6] IRA Ownership Election by Surviving Spouse
  • —–[7] Aggregation of Plans, IRAs, or Roth IRAs
  • —–[8] Division of Plans, IRAs, or Roth IRAs
  • —–[9] Source of Funds for Distributions
  • —-[10] Suspension of Minimum Distribution for 2009
  • § 8.02 Required Beginning Date for Minimum Distributions (RBD)
  • § 8.03 Minimum Distribution Requirements for Annuities
  • —–[1] Minimum Distribution Requirements for Annuities in General
  • ———-[a] Satisfying Minimum Distribution Requirements
  • ———-[b] Satisfying Initial Minimum Distribution Requirement for Annuities
  • ———-[c] Annuity Beginning Too Late to Satisfy Initial Minimum Distribution Requirements
  • ———-[d] Annuity Starting before Required Beginning Date (RBD)
  • —–[2] Requirements Applicable to Fixed Term Annuities
  • ———-[a] Satisfying Requirements Applicable to Fixed Term Annuities
  • ———-[b] If Spouse Is Sole Beneficiary
  • ———-[c] Payments Starting Before the Required Beginning Date (RBD)
  • ———-[d] Retiree Dies before the Required Beginning Date (RBD)
  • —–[3] Requirements Applicable to Lifetime Annuities
  • ———-[a] When Requirements Applicable to Lifetime Annuities Automatically Satisfied
  • ———-[b] Payments to Younger Nonspouse Beneficiary
  • ———-[c] Minor or Disabled Child
  • ———-[d] Payments Guaranteed for Fixed Term Under a Lifetime Annuity
  • —–[4] Annuity Payments that Increase Over Time
  • ———-[a] Increases Allowed by Tax Law
  • ———-[b] Additional Exceptions for Purchased Annuities
  • ———-[c] Additional Exceptions for Certain Annuities Paid by a Defined Benefit Plan
  • —–[5] Changing the Annuity Payment Period
  • —–[6] Insurance Company Annuity Purchased by Plan or IRA
  • —–[7] Additional Rules for Annuities Under Defined Benefit Plans
  • ———-[a] Accrual of Additional Benefits
  • ———-[b] Retirement After Age 70 ½
  • ———-[c] Lump Sum Distribution in Lieu of Annuity
  • § 8.04 Minimum Distribution Requirements for Non-Annuities
  • —–[1] Required Non-Annuity Distributions to the Retiree
  • ———-[a] When Required Non-Annuity Distributions Must Be Made
  • ———-[b] Distributions to Retiree Based on Adjusted Account Balance
  • —————[i] Determination of Adjusted Account Balance
  • —————[ii] Adjusted Account Balance for a Qualified Retirement Plan
  • —————[iii] Adjustment of Account Balance for Certain Subsequent Year Events
  • ———-[c] Computation of Retiree’s Required Minimum Distribution
  • —————[i] Formula to Compute Retiree’s Required Minimum Distribution
  • —————[ii] Liberal Non-Annuity Distribution Rule for Married Retiree
  • —————[iii] Treatment of Unvested Benefits
  • —–[2] Required Non-Annuity Distributions to Beneficiaries
  • ———-[a] Requirements Depend on Identity of Designated Beneficiaries
  • —————[i] Identifying Designated Beneficiaries
  • —————[ii] The Oldest Designated Beneficiary
  • —————[iii] Beneficiaries that Are Not Individuals
  • ———-[b] Death of the Retiree on or after the Required Beginning Date (RBD)
  • —————[i] Payment of Retiree’s Unpaid Distribution After Death of Retiree
  • —————[ii] No Designated Beneficiary
  • —————[iii] Spouse as Sole Designated Beneficiary
  • —————[iv] Other Designated Beneficiaries
  • ———-[c] Death of the Retiree Before the Required Beginning Date (RBD)
  • —————[i] Methods for Satisfying Minimum Distribution Requirements
  • —————[ii] The Five-Year Rule
  • —————[iii] The Life Expectancy Rule
  • ——————–[A] When the Life Expectancy Rule Applies
  • ——————–[B] Spouse as Sole Designated Beneficiary
  • ——————–[C] Other Designated Beneficiaries
  • —————[iv] Spouse Dies before Minimum Distributions Required
  • —————[v] Choice of Distribution Rule by Spouse Who is Sole Beneficiary
  • ——————–[A] Considerations Affecting Choice of Distribution
  • ——————–[B] Death in Calendar Year before Year Attaining Age 65 ½
  • ——————–[C] Death in Calendar Year Attaining Age 65 ½ or Subsequent Years
  • —————[vi] Distribution Rules when Spouse Not the Sole Beneficiary
  • ——————–[A] Factors Affecting the Choice of a Distribution Rule
  • ——————–[B] Special Rule for Beneficiary Rollover from Plan to Inherited IRA
  • —————[vii] Qualifying the Surviving Spouse as the Sole Beneficiary
  • —————[viii] Death of the Oldest Designated Beneficiary
  • ———-[d] Use of Trusts to Provide for Beneficiaries
  • —————[i] Advantages of Using a Trust for Beneficiaries
  • —————[ii] Designated Beneficiary Exception for Certain Trusts
  • —————[iii] Use of Conduit or Grantor Trusts
  • —————[iv] Use of Other Trusts with Identifiable Beneficiaries
  • —————[v] Use of Powers of Appointment
  • —————[vi] Trust with Non-Individual Beneficiary
  • —————[vii] Separate Accounts, Separate Trusts, and Sub-Trusts
  • —————[viii] Special Needs Trusts: Structuring and Funding
  • —————[ix] Identifying Trust Beneficiaries’ with an Interest in a Plan or Arrangement
  • —————[x] Eliminating Beneficiaries Before Finally Determining Designated Beneficiaries
  • —————[xi] Payment by a Trust of Estate’s Expenses, Creditors, and Taxes
  • —————[xii] Taxation of Retirement Benefits to Trusts and Their Beneficiaries
  • ——————–[A] Trust Tax Accounting in General
  • ————————-[I] Simple Trusts, Complex Trusts, and Other Trusts
  • ————————-[II] Income for Trust Accounting Purposes
  • ————————-[III] Distributable Net Income (DNI)
  • ——————–[B] Taxation of Simple Trusts and Their Beneficiaries
  • ——————–[C] Taxation of Complex Trusts and their Beneficiaries
  • ————————-[I] Trust Deduction for Distributions to Beneficiaries
  • ————————-[II] Amount and Character of Distributions to Beneficiaries
  • ————————-[III] Treatment of Charitable Contributions Paid by Complex Trust
  • ————————-[IV] Treatment of Separate Shares as Separate Trusts
  • ——————–[D] Distributions within 65 Days after the End of a Taxable Year
  • ——————–[E] Transfer by a Trust of Beneficial Interest in an IRA or Other Plan
  • —————[xiii] Use of Charitable Remainder Trusts
  • ———-[e] Minimum Distributions for Successor Beneficiaries
  • ———-[f] Trusteed IRA as Alternative to Naming Trust as Beneficiary
  • —–[3] Distributions in Excess of Required Minimum Distribution
  • —–[4] Annuity Starting After Date Minimum Distributions Required
  • ———-[a] General Treatment of Late-Starting Annuity
  • ———-[b] Qualified Longevity Annuity Contract (QLAC)
  • —————[i] Qualifying Longevity Annuity Contracts (QLACs) in General
  • ——————–[A] Purpose and Availability of QLACs
  • ——————–[B] Definition of a QLAC
  • ——————–[C] Advantages of a QLAC
  • ——————–[D] The Dollar and Percentage Limitations on QLAC Premiums
  • —————[ii] Surviving Spouse as Sole Beneficiary of a QLAC
  • —————[iii]  Surviving Spouse Not Sole Beneficiary of a QLAC
  • —————[iv] Coordination with Required Spousal Annuity Rules
  • —————[v] Separate Accounts for QLAC Beneficiaries
  • —————[vi] Planning with Rollovers and Roth Conversions
  • ——————–[A] Planning with Ordinary Rollovers
  • ——————–[B] Planning with Roth Conversions and Rollovers
  • —–[5] Valuation of Illiquid Investments
  • § 8.05 Problematic Distributions/Transfers for Minimum Distribution Purposes
  • —–[1] Trustee-to-Trustee Transfers
  • —–[2] Indirect Rollovers
  • —–[3] Other Distributions
  • § 8.06 Aggregation or Division of Qualified Retirement Plans, IRAs or Roth IRAs
  • —–[1] Minimum Distributions Must Generally Be Determined Separately
  • —–[2] Meaning of Separate Accounts
  • —–[3] Advantages of Separate Accounts for Beneficiaries
  • —–[4] Divisions of Plan Accounts and Inherited IRAs Held by Trusts
  • —–[5] Separate Accounts Not Available for Plan or IRA with Estate as Beneficiary
  • § 8.07 Source of Funds Used to Make Minimum Distributions
  • § 8.08 Effect of QDROs on Minimum Distributions
  • —–[1] QDROs and Minimum Distributions Generally
  • —–[2] Payment Delays Due to QDRO Determinations or Insurance Company Insolvency
  • § 8.09 Minimum Distributions if Surviving Spouse Elects Ownership of IRA or Roth IRA
  • —–[1] Requirements and Consequences of a Spousal Ownership Election
  • —–[2] Using the Ownership Election to Defer Income Taxes
  • —–[3] Spouse Younger than Retiree Who Dies on or After Required Beginning Date (RBD)
  • —–[4] Spouse Younger than 66 ½ and Retiree Dies Before Required Beginning Date (RBD)
  • —–[5] Surviving Spouse Younger than Retiree in Other Situations
  • —–[6] Surviving Spouse Older than Retiree
  • —–[7] Spousal Ownership of Roth IRAs
  • —–[8] Ownership Election for Young Spouse Who Needs Income?
  • —–[9] Alternative Where IRA (or Roth IRA) Ownership Election Not Available
  • —-[10]  Alternative for Funds Rolled Over from Employer Plans to IRAs
  • § 8.10 Effect of Disclaimers on Required Minimum Distributions
  • —–[1] Qualified Disclaimers of Interests in Plans and Arrangements
  • —–[2] Using Qualified Disclaimers to Plan Minimum Distributions
  • § 8.11 Suspension of Minimum Distribution Requirements for 2009

» Chapter 9 – UNFUNDED NONQUALIFIED EMPLOYER PLANS