6. Avoid the Pension Payout Trap
There’s a menacing exception to the rule that it is your responsibility whether IRS holds its taxes from IRAs, annuities, pensions, and other retirement plans. If you get a rollover distribution or a lump-sum payment from a company plan, you may slip into a pension-payout trap.
As previously stated, if you take such a distribution, the plan’s custodian will withhold a flat 20% for the IRS. Even if you complete the rollover within the period of 60 days required by law, the IRS will still withhold the 20% until you file a tax return and claim a refund.
Luckily, there is a simple solution to avoid this from happening. You just have to ask your employer to transfer the funds directly to a rollover IRA. This strategy works as a tax deduction: as long as the check is made out to your IRA rather than to you personally, there will be no withholding.
11 Responses
False pretense.
Where in Cleveland Ohio can I get a reasonable deal on an older SUV?
What type of exercise do you recommend.
Hello,
I am retired. I am helping my disabled son I have a driver license but I have no car because cannot afford a car. My only income is Social Security and $300 for food stamps. For my son and myself. Housing is my biggest issue we live in a unit with a attached garage, It was a dog house. I need to know how I can save money make money.
Kathy can you be a caregiver for seniors? there is a huge need out there for honest and compassionate people to help seniors in their homes. some CNA courses are consolidated and affordable you might not even need one for domestic chores maybe work 4 hours per day so you don’t get worn out?
IN CALIFORNIA THEY PAY PARENTS TO BE THE CAREGIVER!
That’s me
You should have the story on one page not 15000!!!!
I am now 65 and the government has done so much wrong i can not even begin to think about retirement. This is so sad. Looked forward to the day with pride my whole life. Began working in the fields with my dad when I was a kid. First real job 15. Been working my ass off for 50 years. The politicians don’t care. They have it made by taking our money.
I am truly sorry William & I get it. I’m a retired school bus drover. Retired only because I had literally broke my back, I didn’t make it retirement age. I have a son that’s on the autistic spectrum whose father he never met. He was a Vietnam vet, who came home physically, not mentally. He was hit & killed by kids drag racing.
This government never gave him or his son the SS or VA benefits they were entitled to. Worked my fingers to the bone. I finally won the SS benefits where 3 lawyers couldn’t (my son was just a number), VA I’m still working on. I just don’t have another 32 years to fight. That’s how long it took to win. Absolutely ridiculous. But let an illegal come in & they get free everything & yet my son lost his dad in a war we had no business in. Go figure, right! I get it. You take care. God gives what we need. Been there, he does come through.
i am retired and receive ss but what i want to know can i file on my interest i have gained thanks