Remember that the government only represents about 30% of our retirement income, the company retirement pension plan offers another 30 % and many of us do not have one. It is up to individuals to invest wisely short and long term in order to make up for the short fall if he or she would like to live comfortably after retirement without giving up some retirement plans. In this article, we will discuss options in case of death of RRIF and IRA account holder with beneficiary other than spouse.
I. RRIF account
A. Dependent named as beneficiary
a) Your RRIF is not included in the value of your estate on your final tax return if you pass it on to a financially dependent child of any age or a grandchild who is under 18 and use the proceed to by term annuity.
b) They will pay tax only on the payments they receive.
C. Others
a) The entire value of your RRIF will be included on your final tax return as income.
b) If the proceed is large, you may have to pay tax at the highest rate.
II. IRA account
1. IRA cccount holder under 70 ½ years old
a) Lump sum distribution
All assets in the IRA are distributed to the beneficiary at once and before 12/31 of the year of IRA holder dies. Income taxes will be paid on the distribution all at once.
b) Inherited IRA
i) IRA assets are transfer to the beneficiary name
ii) money in IRA transfer will not be available until the 5th year after the year in which the account holder died.
c) Inherited IRA with life expectancy method
i) IRA assets are transfer to the beneficiary name
ii) Annual distributions of inherited assets are spread over beneficiary life expectancy determined by your age in the calendar year following the year of death and reduced by one each year thereafter.
2. IRA acccount holder over 70 ½ years old
a) Lump sum distribution
i) Assets held inside of IRA account are distributed at once.
ii) Income is also pay on the assets distribution and 10% penalty is not applied.
b) Inherited IRA life expectancy method
i) IRA assets are transfer to the beneficiary name.
ii) Beneficiary must take an annual required minimum distribution over his or her life expectancy no later than 12/31 of the year following the IRA account holderâs death.
iii) Yearly distributions are spread over beneficiary life expectancy determined by your age in the calendar year following the year of death and reduced by one each year thereafter.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://financialinvesting09.blogspot.com/
Kyle J. Norton
http://www.articlesbase.com/personal-finance-articles/personal-finance-and-money-management-38-options-in-case-of-death-of-rrif-and-ira-holder-with-beneciary-other-than-spouse-697081.html
Remember that the government only represents about 30% of our retirement income, the company retirement pension plan offers another 30 % and many of us do not have one. It is up to individuals to invest wisely short and long term in order to make up for the short fall if he or she would like to live comfortably after retirement without giving up some retirement plans. In this article, we will discuss options in case of death of RRIF and IRA account holder with beneficiary other than spouse.
I. RRIF account
A. Dependent named as beneficiary
a) Your RRIF is not included in the value of your estate on your final tax return if you pass it on to a financially dependent child of any age or a grandchild who is under 18 and use the proceed to by term annuity.
b) They will pay tax only on the payments they receive.
C. Others
a) The entire value of your RRIF will be included on your final tax return as income.
b) If the proceed is large, you may have to pay tax at the highest rate.
II. IRA account
1. IRA cccount holder under 70 ½ years old
a) Lump sum distribution
All assets in the IRA are distributed to the beneficiary at once and before 12/31 of the year of IRA holder dies. Income taxes will be paid on the distribution all at once.
b) Inherited IRA
i) IRA assets are transfer to the beneficiary name
ii) money in IRA transfer will not be available until the 5th year after the year in which the account holder died.
c) Inherited IRA with life expectancy method
i) IRA assets are transfer to the beneficiary name
ii) Annual distributions of inherited assets are spread over beneficiary life expectancy determined by your age in the calendar year following the year of death and reduced by one each year thereafter.
2. IRA acccount holder over 70 ½ years old
a) Lump sum distribution
i) Assets held inside of IRA account are distributed at once.
ii) Income is also pay on the assets distribution and 10% penalty is not applied.
b) Inherited IRA life expectancy method
i) IRA assets are transfer to the beneficiary name.
ii) Beneficiary must take an annual required minimum distribution over his or her life expectancy no later than 12/31 of the year following the IRA account holderâs death.
iii) Yearly distributions are spread over beneficiary life expectancy determined by your age in the calendar year following the year of death and reduced by one each year thereafter.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://financialinvesting09.blogspot.com/
Kyle J. Norton
http://www.articlesbase.com/personal-finance-articles/personal-finance-and-money-management-38-options-in-case-of-death-of-rrif-and-ira-holder-with-beneciary-other-than-spouse-697081.html
As we mentioned in previous articles we know that our government only represents about 30% of our retirement income. The company retirement pension plan offers another 30 % and many of us do not have one. It is up to individuals to invest wisely short and long term in order to make up for the short fall if he or she would like to live comfortably after retirement without giving up some retirement plans. Some people choose to invest into personal registered retirement saving plans in Canada or 401k plans and IRA plans in the US. In this article, we will discuss RRSP, 401k plan maturity options.
I. Take all in Cash
a) In Canada at 69 years of age, depending on the amount of your RRSP account, you may have to pay up to 50% of tax if you take all money of the RRSP plan in cash.
b) Before April 1 of the year following the year in which you reach age 70½ you can transfer your 401 k plan to your IRA plan with out paying tax, but minimum withdrawal is required.
c) You can cash out your 401k and IRA plans with 20% tax withhold of amount withdrawn.
II. Purchase an annuity for your 401k plan and RRSP
This option requires you to give up all control of your funds in return for receiving a fixed and regular annuity income from an insurance company. The income annuity is based upon the current interest rate and the amount of annuity investment you purchase.
III. Other options
a) In the US, your 401K can remain invested in your employer-sponsored plan, if your former employer allows it. It avoids current taxes and penalties, and may offer other advantages unavailable elsewhere but minimum withdrawal is required every year. The IRS allows a number of options under which you can calculate your MRD. Make sure that the plan allows you to select the method that is most advantageous to you.
b) For IRA plans, minimum withdrawal is required at maturity.
c) In Canada, you can invest your RRSP like other investment programs in registered retirement income funds. Minimum withdrawal is required every year.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://medicaladvisorjournals.blogspot.com
http://personalfinance26.blogspot.com/
Kyle J. Norton
http://www.articlesbase.com/personal-finance-articles/personal-finance-and-money-management-26-registered-retirement-pension-plan-and-401-k-plan-maturity-options-680007.html
As we mentioned in other articles the government only represents about 30% of our retirement income, the company retirement pension plan offers another 30% and many of us do not have one. It is up to individuals to invest wisely short and long term in order to make up for the short fall if he or she would like to live comfortably after retirement without giving up some retirement plans. Now you have reached your retirement age, there are some important investment options for your RRSP or 401k plan. In this article, we will discuss types of certain term annuity.
I. Definition
Certain term annuity guarantees a periodic payment of a predetermined amount for a fixed term. Once the term has elapsed, payment stops, even if the annuitant is still alive. Because of the tax-deferred status of these products, many wealthy investors or above-average income earners choose to purchase term certain annuities for the tax advantages.
II. Payment
Term certain annuities pay varying amounts depending on how much money was used to purchase the annuity. If the term certain annuity is short, then each payment back to the annuitant will be large. If the term is long, then each payment will be small.
III. Benefits of certain term annuity
a) Certain term insurance works best for wealthy people who want to defer taxes on income for a fixed period of time. A term certain annuity contract can sometimes be an option.
b) Individuals who will retire soon and need income coverage during that time.
c) As an alternative to other investments for a short period of time before retirement.
Since the main risk is that you may outlive your term annuity and be left with no money, it is wise to purchase this type of annuity under the guidance of a reputable financial adviser.
I hope this information will help. If you need more information or insurance advices, please follow my article series of the above subject at my home page at:
http://medicaladvisorjournals.blogspot.com
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://personalfinance32.blogspot.com/
Kyle J. Norton
http://www.articlesbase.com/personal-finance-articles/personal-finance-and-money-management-32-characteristics-of-certain-term-annuity-682428.html
One of the questions ask to:
"Enter the total current value of this parent’s tax-deferred retirement, pension, annuity, and savings plans. Include IRA, SRA Keogh, SEP, 401(a), 401(k), 403(b), 408, 457, 501(c) plans, etc. "
I have my parents "social security statement" but I’m not sure what is "tax deferred."
CSS Profile is the application for financial aid for college. Thanks in advance.
Thank you. Sorry, also:
"Enter the total amount withheld from your parents’ wages for dependent care and medical spending accounts in 2009. "
In the W-2 form: is this social security tax withheld and medicare tax withheld?
All the plans included in the question re: IRA are tax deferred, meaning no Federal or State Taxes paid until you start to withdraw money
Social Security Statement would NOT have that information
You need to ask your parents if the have any retirement Savings Vehicles
Any tips, advice, techniques or information.
I must admit I’ve never heard of these exams but then again I’m only 14.
Several years ago my financial planner was putting together my portfolio which included some stocks, annuities etc. that my parents were going to give me as a gift. Well, my father was out of the country and he told me that he wanted to be present when All of these gifts were switched from his name to mine. I fully understood and told the planner we’d need to wait. Well, when my father returned in 3 weeks I received a call from him and he was extremely upset. He asked how I had taken nearly $75,000 from his stock/annuity accounts without respecting his wishes to be present.
I had no answer and I called my planner to ask him. Only to find that she said that she just went ahead and took care of it as she had my fathers information (bank numbers/passwords and SSN).
Well, my father was furious but he calmed down and it was excused.
Now to 2009…….my husband and I have decided to divorce and to be honest, it’s getting quite ugly as we are not agreeing on asset distribution. Well, the other day I was going through some financials with the paralegal at my lawyers office and there is a large sum of money (about $50,000) that is unaccounted for. I was sure that the planner (yes, we both still use her) had just moved it and it would all make sense. Then I called a credit card company only to find out that the account (in my name) had been canceled. OK, now something is wrong.
Well, I have our cell phones in my name (5 of them- me and my husband and 3 kids). All are in MY name and I called to see if we had gone over on our plan (thanks to the kids) and I learned that my bill was about $35 less than normal. This made no sense so I looked further and the person at the cell company explained that "I" had called in last month and asked to have one of the phones (husbands) placed into a new account and that I had lost rights to this phone. The representative explained that the call was recorded and it could be proven. Well, I knew exactly what had happened. They were able to tell me the date and time when "I" had called in and guess who my husband was with at that exact time/date…yep, our financial planner who I had watched first hand lie to multiple banks and even an insurance company claiming to be someone she was not. Don’t misunderstand, I saw nothing wrong with what he was doing as it was usually just her calling claiming to be me at my request since I didn’t want to go throught the hassles. Now, it’s painfully obvious that she is steering my husband throughout this divorce behind my back.
Is it worth my time to subpoena for this digitally recorded phone call which I feel 100% certain will show who the real "ME" is using my personal data (SSN etc.). No, in the big scheme of things losing this number is no biggie, however, it is obvious to me that this once trusted friend (professional) sees where she can benefit most by aiding my husband throughout this divorce process and she’s willing to do this to make it happen.
I don’t want her in trouble with the law as I just don’t operate that way. However, if my lawyer gets this record and it’s clearly her, what are the different scenarios that could happen?
It is possible that it’s my daughter and if that’s the case then I’ll just laugh but if it’s someone outside of my family I have a very big problem with that.
Thank you in advance!
Pat
You have a lawyer so he/she should be handling this, not you. You are too personally invested in this matter to make decisions about this. It’s possible that you husband had a friend call the phone company (he certainly knows your SS#). He could also have cancelled your credit card just to be vindictive. You have no proof at this time that your financial planner is causing you these problems. However, if you no longer trust the woman, then pull your money out of her control because you don’t need any additional grief at this time. Check with your lawyer.
1) a. it emphasizes earning a return on invested capital
b. it recognizes that earning a return makes $1 worth more today than $1 received in the future
c. it can be applied to future cash flows in order to compare different streams of income
d. all the above
2. As the discount rate becomes higher and higher, the present value of inflows approaches…
a. 0
b. minus infinity
c. plus infinity
d. need more information
3. You are to receive $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?
a. Present value of an annuity of $1
b. Future value of an annuity
c. Present value of $1
c. Future value of $1
4. As the interest rate increases, the present value of an amount to be received at the end of a fixed period…
a. increases
b. decreases
c. remains the same
d. not enough information to tell
5.As the time period until receipt increase, the present value of an amount at a fixed interest rate…
a. decreases
b. remains the same
c. increases
d. not enough information to tell
6.Mr Blochins is creating a college investment fund for his daughter. He will put in $850 per year for the next 15 years and expects to earn an 8% annual rate of return. How much money will his daughter have when she starts college?
a. $11,250
b. $12,263
c. $24,003
d. $23,079
7.Mr. Nailor invests $5,000 in a certificate of deposit at his local bank. He receives annual interest of 8% for 7 years. How much interest will his investment earn during this time period?
a. $2,915
b. $3,570
c. $6,254
d. $8,570
8.Sharon Smith will receive $1million in 50 years. The discount rate is 14. As an alternative, she can receive $2,000 today. Which should she choose?
a. the $1 million dollars in 50 years
b. $2,000 today
c. She should be indifferent
d. need more information
9.Mr. Fisher wants to build a house in 10 years. He estimates that the total cost will be $170,000. If he can put aside $10,000 at the end of each year, what rate of return must be earn in order to have the amount needed?
a. between 11% and 12%
b. between 8% adn 9%
c. 17%
d. none of the above
10. The shorter the length of time between a present value and its corresponding future value…
a. the lower the present value, relative to the future value.
b.the higher the present value, relative to the future value.
c.the higher the interest rate used in the present-valuation.
c. none of the above
11. A dollar today is worth more than a dollar to be received in the future because…
a. the dollar can be invested today and earn interest
b. of the risk of nonpayment in the future
c. inflation will reduce purchasing power of a future dollar
d. none of the above
12. The higher the rate used in determining the future value of a $1 annuity…
a.the smaller the future value at the end of the period.
b. the greater the future value at the end of a period.
c. the greater the present value at the beginning of a period.
d. None of the above – the interest has no effect on the future value of an annuity.
13. Mr. Darden is selling his house for $165,000. He bought it for $55,000 nine years ago. What is the annual return on his investment? …
a. 3%
b. Between 14% and 16%
c. 13%
d. none of the above
1.a
2.d
3.c
4.c
5.c
6.c
7.a
8.a
9.c
10.a
11.c
12.c
13.b
a. it emphasizes earning a return on invested capital
b. it recognizes that earning a return makes $1 worth more today than $1 received in the future
c. it can be applied to future cash flows in order to compare different streams of income
d. all the above
As the discount rate becomes higher and higher, the present value of inflows approaches…
a. 0
b. minus infinity
c. plus infinity
d. need more information
You are to receive $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?
a. Present value of an annuity of $1
b. Future value of an annuity
c. Present value of $1
c. Future value of $1
As the interest rate increases, the present value of an amount to be received at the end of a fixed period…
a. increases
b. decreases
c. remains the same
d. not enough information to tell
As the time period until receipt increase, the present value of an amount at a fixed interest rate…
a. decreases
b. remains the same
c. increases
d. not enough information to tell
Mr Blochins is creating a college investment fund for his daughter. He will put in $850 per year for the next 15 years and expects to earn an 8% annual rate of return. How much money will his daughter have when she starts college?
a. $11,250
b. $12,263
c. $24,003
d. $23,079
Mr. Nailor invests $5,000 in a certificate of deposit at his local bank. He receives annual interest of 8% for 7 years. How much interest will his investment earn during this time period?
a. $2,915
b. $3,570
c. $6,254
d. $8,570
Sharon Smith will receive $1million in 50 years. The discount rate is 14. As an alternative, she can receive $2,000 today. Which should she choose?
a. the $1 million dollars in 50 years
b. $2,000 today
c. She should be indifferent
d. need more information
Mr. Fisher wants to build a house in 10 years. He estimates that the total cost will be $170,000. If he can put aside $10,000 at the end of each year, what rate of return must be earn in order to have the amount needed?
a. between 11% and 12%
b. between 8% adn 9%
c. 17%
d. none of the above
The shorter the length of time between a present value and its corresponding future value…
a. the lower the present value, relative to the future value.
b.the higher the present value, relative to the future value.
c.the higher the interest rate used in the present-valuation.
c. none of the above
A dollar today is worth more than a dollar to be received in the future because…
a. the dollar can be invested today and earn interest
b. of the risk of nonpayment in the future
c. inflation will reduce purchasing power of a future dollar
d. none of the above
The higher the rate used in determining the future value of a $1 annuity…
a.the smaller the future value at the end of the period.
b. the greater the future value at the end of a period.
c. the greater the present value at the beginning of a period.
d. None of the above – the interest has no effect on the future value of an annuity.
Mr. Darden is selling his house for $165,000. He bought it for $55,000 nine years ago. What is the annual return on his investment? …
a. 3%
b. Between 14% and 16%
c. 13%
d. none of the above
d.
a.
a.
b.
a.
c.
a.
b.
d.
b.
d.
c.
On January 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and December 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:
Present value of annuity for 10 periods @ 3%…8.5302
Present value of annuity for 10 periods @ 4%…8.1109
Present value of 1 due in 10 periods @ 3%…0.7441
Present value of 1 due in 10 periods @ 4…0.6756
I cannot even figure out where to begin!!! Can someone please help me!!! I am desperate!!!
Discount all the interest payments for 5 years at 6 percent and then discount the par value at 6 percent and add the two together.
c/(1+i) +…..c/(1+i)^n + M/(1 + i)^n