Plans with a different set of rules | SummitDaily.com
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Plans with a different set of rules

Bob Priest

Dear Mr. Priest: My wife and I have accumulated several IRAs from our past teaching professions. We also have 403(b)s. We are taking required minimum distributions from all of our retirement accounts. You wrote last year that we can take our required distributions from any of our IRAs as long as we take out the proper amount. Does this go for 403(b)s as well?

Jim and Millie, Colorado

Dear Jim and Millie: The column you are referring to specifically applies to IRAs. With IRAs, you can take your required minimum distribution from all accounts, one account, or any combination as long as you take the full amount required under the rules.

If you fail to take the required amount, the IRS will penalize you 50 percent on the shortage.

Qualified plans must adhere to a different set of rules. Typically with qualified plans, the minimum distribution must be taken out from each individual account.

Generally, this can be set up so that each year you will receive a check automatically from the custodian.

This assures that you don’t forget to take your distribution and realize a nasty penalty from the IRS. Qualified plans would include a TSA 403(b), Keogh, 401(k), SIMPLE, SIMPLE 401(k) and pension and profit-sharing plans.

If you want to have more flexibility than offered with qualified plans, you do have an option.

You may be able to roll your qualified accounts over to IRAs. Once the accounts are considered IRAs, you would be able to take your required minimum distribution from one or more accounts as desired. Happy planning!

Bob Priest, MBA, CFP, is an independent certified financial planner and registered investment adviser serving clients locally and nationally. He can be reached at (877) BOB PRIEST or on his Web site at http://www.BobPriestFinancial.com. All opinions herein are those of the author and not of the Summit Daily News or its staff. Submit your financial questions to Bob@FinancialCompanies.com.


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