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On Thu, 03 Apr 97 18:52:07 -0600, FireClaims wrote:
<<I have been hearing recently about a 15% penalty on deferred retirment savings (401k) if they exceed a certain dollar figure. Can someone give me the specifics. Is it total retirement savings or total retirement income, or just 401k's or deferred investments? I have read two different figures. One is 1,500,000 in savings and the other was 100,000/yr in disbursments? I am a long way from getting hurt by that, but would like to know anyway...

According to the 1995 edition of IRS Publication 590
(on IRAs), page 37, "Excess Distributions"
"If you received retirement distributions during the year
of more than $150,000, you may have to pay a 15% tax on
the distributions that are more than $150,000. The term
retirement distributions means your distributions from any
qualified employer plan (including a tax-sheltered
annuity plan), or IRA." (there is lots more, and we should
all get the latest version, I am afraid. I am not sure
if my defined-benefit pension must be added to the
distribution amounts or not. But you may have difficulty
reducing the amount distributed each year if you have
too much in the IRA, since it must all be paid out in
no more than 20 payments.
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