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Author: jmacker Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Taxes on Pension Date: 6/9/2001 9:37 AM
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My wife has the option of taking her pension as a lump sum. Can the taxes on the lump sum be averaged over a number of years?
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Author: gahdzila One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30148 of 76418
Subject: Re: Taxes on Pension Date: 6/9/2001 10:40 AM
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My wife has the option of taking her pension as a lump sum. Can the taxes on the lump sum be averaged over a number of years?

my plan document specifically says concerning lump sum, "while this option would give you immediate access to your money, the sum will be immediately taxable in full on withdrawl."

I seriously doubt that you'd be able to spread the taxes out, but I suppose you could double check the plan document on your specific pension plan.

gahdzila

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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30152 of 76418
Subject: Re: Taxes on Pension Date: 6/9/2001 11:57 AM
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My wife has the option of taking her pension as a lump sum. Can the taxes on the lump sum be
averaged over a number of years?


Yes, if she was born before 1936 she can use Form 4972 which averages the lump sum over 10 years (using a special tax table). This also gets the lump sum out of your personal tax bracket. She can get about $115,000 out at an average tax rates of 15%, $250K at 20%, $440K at 27%, etc. ed

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