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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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I plan on retiring next year and I will have a pension plan

Resolved Question:

I plan on retiring next year and I will have a pension plan and 401k that I am thinking of rolling over into my IRA's. First the pension I am wondering what is the best way for me to do this. Instead of receiving a monthly payment I am thinking of taking the entire lump sum and rolling it over into a Traditional or Roth IRA. For tax purposes what is the best way for me to save money.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,

Robin D :

The best and easiest thing to do to accomplish what you want would be to have the IRA administrator complete an electronic transfer for you. That way you will not receive a check, no taxes will be withheld (that you would have to come up with to put in the IRA to complete the rollover) and no 1099R issued to you.

Robin D :

You can not just roll the 401K in to a ROTH.

Robin D :

You would pay tax on the entire distribution if you do.

Robin D :

The portion of a distribution from a pre-tax retirement plan (401K) account that is not rolled over is generally taxable in the year of the distribution.

Robin D :

If the distribution from the qualified plan or IRA is paid to you, you have 60 days from the date of receipt to roll it over to another qualified plan or IRA. If they withhold then you would have to take the withheld amount out of your own pocket to make up that difference or you would have that amount added to your income when you file. You would of course receive credit for that withheld amount when you file your return but if you can avoid that then it is better.

Robin D :

Please let me know if you need more information or clarification on any of this before you rate.

Robin D :

If I have covered all your situation then I thank you in advance for a positive rating.

Robin D :

Hi

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7865
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D.
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15years with H & R Block. Divisional leader, Instructor