New York (June 13, 2003) -- CPA financial planners should focus on four often-overlooked opportunities when doing retirement distribution planning for clients, an expert on distribution planning told accountants gathered here at a New York State Society of CPAs-sponsored conference.
For clients who hold employer securities with a low cost basis in their 401(k), be sure to take advantage of favorable tax treatment via a qualified-plan lump sum distribution, advised Marvin Rotenberg, national director of retirement services at Fleet Bank's Private Clients Group. Rotenberg's discussion on the required minimum distribution rules was part of the Personal Financial Planning conference held Thursday by the society's Foundation for Accounting Education.
Secondly, planners should help clients calculate RMD to avoid a 50 percent penalty. "Many institutions will offer to calculate the RMD for your clients, but they may not do it correctly," Rotenberg warned. He also reminded planners to help clients avoid the 10 percent penalty on withdrawals taken before clients reach age 59. "There are ways to get around it," he urged.
Lastly, he encouraged planners to use multi-generational IRAs to help clients pass their wealth on to their heirs. "When you combine ‘the’ with IRS, you get 'theirs.' Don't miss this opportunity," Rotenberg said. "Your clients are depending on you to avoid being 'theirs' and their heirs."
-- Melissa Klein
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