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Greetings, Glenn, and welcome. You asked:

<<How does a 457 plan differ from normal tax deferred plans? What are the deadlines for determine the method you are going to determine your life expectancy? Is it Dec. 31 of the year you turn 70.5 or April 1 the year following the year you turn 70.5? I was told today by a friend that they had to have this decision made by tomorrow. That does seem correct to me. Any ideas that I can share with my friend.>>

The 457 plan is not a qualified retirement plan for income tax purposes. Basically, that means when the money is distributed from the plan, it cannot be transferred to an IRA and it will be taxed in the year of distribution at ordinary income tax rates. Distributions are allowed when the person leaves the employer, and are mandatory no later than April 1 of the year following that in which the person attains age 70 1/2. The plan itself may specify an earlier required distribution date (e.g., 60 days after separation from service).

It sounds as if your friend is required by his plan to take a mandatory distribution now. If so, he has little choice in the matter. He can probably choose between taking all of it at once or in installments payable over his life expectancy or the joint life expectancy of him and a beneficiary. His plan administrator will be able to tell him what his options are.

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