[...]... to take money out of a retirement plan You might want to borrow the money for an emergency and pay it back—or not pay it back Maybe you quit your job and you want to take your share of the company’s plan Perhaps you’re r ­equired by law to withdraw some of your retirement funds because you’ve reached a certain age Whatever your situation, you probably have a lot of questions about your plan— and how... save for retirement And working people have saved, often stretching as far as they can to put money into their retirement plans But saving is only half the equation The government also wants you to take money out of the plan and spend it chiefly on your retirement For that reason, the government has enacted a series of rules on how and when you can—or, sometimes, must—take money out of your retirement. .. account or individual retirement annuity to which any person with earnings from employment may ­contribute These are called contributory IRAs Some types of IRAs are used to r ­eceive ­assets distributed from other retirement plans These are called rollover IRAs Still others, such as SEPs and SIMPLE IRAs, are technically IRAs even though their rules 1/10 IRAs, 401(k)s & Other Retirement Plans are quite... the participant dies 1/ IRAs, 401(k)s & Other Retirement Plans the money out whenever you want, nor can you leave it in the plan indefinitely, h ­ oping, for example, to pass all of the funds on to your children ­ Instead, you must follow a complex set of rules for withdrawing money from the plan during your lifetime, and your beneficiaries must follow these rules after your death These rules are... do I have to start taking money out of my IRA? (See Chapter 5.) • How do I calculate how much I have to take? (See Chapter 6.) • Can I take more than the required amount? (See Chapter 6.) I/ IRAs, 401(k)s & Other Retirement Plans • What happens to my retirement plan when I die? (See Chapters 7 and 8.) • Can my spouse roll over my IRA when I die? (See Chapters 7 and 8.) • What about my children? Can... take all the money out of the account right away? (See Chapters 7 and 8.) • If I inherit a retirement plan, can I add my own money to it? Can I save it for my own children, if I don’t need the money? (See Chapters 7 and 8.) • Am I allowed to set up a Roth IRA? Should I? (See Chapter 9.) • Can I convert my regular IRA to a Roth IRA? Should I? (See Chapter 9.) To help you answer these and other questions,... can be beneficial Your money grows while the tax man waits Many people vastly underestimate the benefits of tax-deferred compounding of investment returns inside a retirement plan account Take a look at Tables I and II ­below Both cases assume a simple 8% r ­eturn on your investment and a flat 28% tax rate Table I shows what happens if you take $10,000 out of your IRA, pay tax on it and invest the remainder... you take money out, it’s called a distribution.) What does this mean for you? If you or your employer has ever put money into a retirement plan and received tax benefits as a result, then you cannot simply take Types of Retirement Plans 1/ Helpful Terms Adjusted gross income (AGI) Total ­taxable income reduced by certain ­expenses such as qualified plan ­contributions, IRA contributions, and ­alimony... so you can read firsthand how IRS personnel are thinking about certain critical issues The tax rules for pensions, IRAs, 401(k)s, and other types of retirement plans are n ­ otoriously complex, which can be all the more frustrating because they are important to so many people The good news is that help is here: This book makes the rules clear and ­accessible Icons Used Throughout At the beginning of... Retirement Accounts 1/9 1 Traditional Contributory IRAs 1/10 2 Rollover IRAs 1/11 3 Simplified Employee Pensions 1/11 4 SIMPLE IRAs 1/12 5 Roth IRAs 1/13 C Almost-Qualified Plans 1/13 1 Qualified Annuity Plans 1/13 2 Tax-Deferred Annuities 1/14 D Nonqualified Plans 1/14 1/ IRAs, 401(k)s & Other Retirement . practice in your state. NOLO please note IRAs, 401(k)s, & Other Retirement Plans Taking Your Money Out by Twila Slesnick, Ph.D., Enrolled Agent & Attorney John C. Suttle, CPA 7th edition Seventh. class="bi x0 y0 w0 h0" alt="" IRAs, 401(k)s, & Other Retirement Plans Taking Your Money Out by Twila Slesnick, Ph.D., Enrolled Agent & Attorney John C. Suttle, CPA 7th edition Nolo’s Legal. SOLUTIONS, INC. Slesnick, Twila. IRAs, 401(k)s & other retirement plans : taking your money out / by Twila Slesnick & John C. Suttle ; edited by Amy DelPo 7th ed. p. cm. ISBN 1-4133-0402-8