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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76395  
Subject: Re: Leave in 401(K) or rollover to IRA? Date: 9/2/1999 5:49 PM
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Edcosoft sez:

<<Your quote is from PIXY who doesn't advocate LSD for anyone because they don't apply to everyone.>>

NO, that is not what I said. And I suspect you know that full well and are seeking to antagonize me. What I said was "That option, though, requires close examination because it's contingent on a whole host of factors such as your income tax rate today versus that in retirement, your age today, your need for the cash for income, your overall net worth, and a few other things. If your spouse was over the age of 55 on separation, if you are in a 31% marginal tax bracket today and expect to stay there, and if you have no need for the cash in retirement, then you could cash out today to enjoy a minimum income tax burden on your family over your lifetime. However, before you take that step you should consult your tax advisor. For most folks, it simply is not a good option." (emphasis added) I truly resent your trying to put words in my mouth, particularly when they are patently untrue.

For those who are interested, Edcosoft and I have had this exchange before on another board. You may find the thread of that discussion starting at http://boards.fool.com/Message.asp?id=1380039000028023&sort=postdate in message 214 on that board and ending with 225. My rationale for my position is laid out quite clearly therein as is Edcosoft's.

I maintain LSDs may be appropriate in some very limited circumstances. Edcosoft believes otherwise. That's his right. I would just caution folks to look long and hard at this issue before making the choice.

<<She has to be at least 59 1/2 this year, and 65 if next year. >>

That is absolutely correct for the use of 5-year or 10-year averaging. To simply take the lump sum distribution and pay ordinary rates on whatever bracket her $50K would place her, she would need only attain the age of 55 in the year of separation.

Regards..Pixy
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