Greetings, Dovarro, and welcome. You wrote:

<<My father is retiring 8/11/00 so I do not have much time to advise him. He has an employee savings plan in the amount of 80,000. If he is issued a check from the company he will be taxed at the highest rate. Thus, where should he put the money for capital preservation and in order to not be taxed when he is issued the check. >>

First, stop your father from getting that check made out in his name. If he does, by law 20% must be withheld for potential income taxes. He would then have 60 days to roll the proceeds to an IRA to avoid taxes on the entire amount. The problem, though, is he only has 80%. Unless he made up the missing 20% from other resources and added it to the check he gets for the rollover, then the IRS will call the missing 20% a distribution and tax him on that amount. Sure, he might get a refund, but he has to wait until he files his taxes for the year before he does.

Instead of getting the check, he should have the plan directly transfer the plan money to an IRA in his name at a custodian of his choice. If he does that, nothing will be withheld and he will have no tax problem. Both his potential IRA custodian and his plan custodian know how to accomplish this, so all he needs to do is ask and they can guide him through the necessary hoops. Once in the IRA, he can then take only what he needs and pay income taxes on that amount.

Regards..Pixy