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My wife and I plan to retire at the end of 2001. We want to be completely debt free when we
retire (no home mortgage, car payments, etc.). My question is: Is there any way for me to roll a
lump sum payment from my pension plan into a primary residence without getting killed on
taxes? We have a very nice nest egg in our 401K's and other investments so losing the monthly
benefit of the pension would not hurt us.


You can take a Lump Sum Distribution and average it on a form 4972 if you are 59 1/2 this year, or after this year if you were born before 1936. This will be lower than ordinary income tax, but you must take it all out of any plan. Get IRS form 4972 and its instructions, or read about it in Publication 505. Ed
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