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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I am concerned about a government takeover of all Retirement

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I am concerned about a government takeover of all Retirement Accounts. I have both a 401-K Rollover and two ROTH IRA's with Scottrade. I am also over 65 and retired. The question is:
What are the ramifications of transferring my retirement accounts to regular Brokerage Accounts with regard to any penalties, taxes or capital gains?

Why do you think the government will take over all retirement accounts?

 

Distributions from 401K rollover account will be included in income and taxed at regular tax rates. Depending on the amount of distribution taken out and the other income you have, this could move you to a higher tax bracket. Hence, it is not advisable to take a lumpsum distribution.

 

you are getting social security benefits than this amount can also cause part of your benefits to be taxable.

 

Distribution from Roth IRA account will not be taxable. Currently since the amount is in Roth IRA account you are not paying any tax on the earnings accumulated in this account. If you take it out and put it elsewhere than you will have to pay tax on any income you make by investing this amount in a regular account.

 

 

Let me know if you have any question. Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Customer: replied 7 years ago.
That possibility , a government takeover of retirement accounts, is currently being discussed in committee. You can Google the subject for specifics. I plan on taking no immediate distributions. The only transaction would be to change/transfer the accounts to regular brokerage accounts from retirement accounts within the same Company Scottrade.

I do not see it happening in the near future.

 

In any case-

 

Transferring account from 401K account to the regular retirement account in the same brokerage company will also be considered as distribution.

 

Since 401K contribution was made pre-tax, this distribution will be taxable when moved to regular account.

 

You may want to take this amount out of the 401K to regular account over a period of time so that the tax consequences resulting from such distribution will be spread out and not hit you all at once.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

RD and other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Thank You....This is the answer I was looking for ;o)

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