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The mandatory distribution rule applies only to IRA and 401K accounts. The effect is to force you to begin paying income taxes on your gains at age 70.5.

The rules are complex and were just modified last year. But roughly, the mandatory distribution amount is determined by the life expectancy of the account holder and his beneficiary. The people named as beneficiary will affect the amount of the payment. Usually your 401K administrator can tell you what the required distributions are under the various systems of calculation. You will also find books on the subject in the library. A financial planner can also help if you need personal assistance.

Once the distribution is made, a portion of any distribution is attributed to after tax contribution, which reduces the taxable amount involved. However, once its distributed from the account you may do whatever you want with the money. If it is not needed now, reinvesting it is a good idea.

On the subject of Altheimers, yes, planning to preserve your parents assets to support your mother if he is in a nursing home for an extended period is a good idea. The rules on this vary from state to state. So you need to consult an eldercare attorney in your area for advice. Most states have a three year lookback. That means any assets he has distributed in the three years prior must be considered in determining if he is qualified for state aid as medicaid. There are also asset limitations. Your attorney can advise you. Your fathers doctor, hospital or nursing home all have social workers who can recommend elder attornies in your area. They can also make clear what services can be provided under medicare or other programs.
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