In light of the current situation, we are offering our clients the opportunity to meet with us virtually, rather than in-person. Please click here to contact us or call 800-756-5596 to schedule your appointment
Our phone lines are currently down, please use 323-391-4162 as an alternative number. Thank you.

Make Informed Decisions
About Your & Your Loved Ones' Futures
Based On Experienced Advice

~|chevron-down~|font-awesome~|solid

Lump Sum Payments Can Cost Heirs of Retirement Accounts

| Aug 22, 2016 | Pension |

When retirement accounts are passed on to heirs they face major decisions that have to be made in a timely manner.

Market Watch recently discussed some typical options that are important to spouses that inherit retirement accounts in “Inheriting a retirement account? Lump sum payouts can be costly.”

They include:

  • Lump Sum Cash Payment – The surviving spouse has the option of cashing out the account with a single lump sum payment. This is the most costly option in terms of taxation.
  • Monthly Benefits – Most plans allow a surviving spouse to receive a monthly benefit for life. Whether this is a better option than taking a lump sum depends on the life expectancy of the surviving spouse. It is also a good choice if the surviving spouse does not want to invest the money.
  • IRA – A surviving spouse can normally transfer the account assets into an IRA. The assets will then be treated as if they were always the property of the surviving spouse.
  • Inherited IRA – Transferring into an inherited IRA is another option available to a surviving spouse. This is can be very beneficial if the surviving spouse is much younger than the pensioner.

An estate planning attorney can guide you in your options.

Categories

Archives