Bird
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Bird last won the day on August 10
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Is the ex-spouse still the beneficiary? That seems odd. When you say "The policy was to be transferred to the ex-spouse..." that implies s/he is the bene. Being the trustee and being the bene are two very different things. In any event, no the spouse cannot pay the premiums. There is no way to get money into the plan. This is a good example of why life insurance does not belong in plans. And it being a second-to-die policy compounds the problems, and the long term care benefits, oof. I'm honestly not sure that is even a legit benefit but I really don't know. It's probably best to surrender the policy and take the $200K. The only other alternative I can think of is to have the plan borrow money from the policy to strip down the cash value, then distribute the policy and the cash. Unfortunately that leaves a policy that has a heavy debt load so it will require not only premiums but debt payments. It might make sense to repay the debt over time with the cash that has been presumably rolled to an IRA. This all assumes the ex-spouse is the beneficiary, which again seems odd. It's a mess any way you look at it.
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Beneficiary designated with a dollar amount?
Bird replied to Gilmore's topic in Retirement Plans in General
Yes. But administrators and recordkeepers have good reason to insist on percentages. If the designation is "$100K to A, $100K to B, and the rest to C" but there is only, say, $50K in the account, nobody wants to be stuck trying to interpret that. -
Plan termination distributions done incorrectly
Bird replied to Jakyasar's topic in Retirement Plans in General
Shocking, SHOCKING than an advisor would do this (sarcasm). I'd be comfortable asking those who decided to leave it in the 401(k) to sign new forms confirming their change of election. The others, I don't think I would want to cover up for the advisor. Just leave it hanging, have them sign new forms to take the money from the 401(k), and document the whole mess thoroughly. The PBGC would probably be content as long as they eventually got their money as requested. Otherwise you'd have to get the advisor to ask to get the money back from the 401(k) and reprocess. There would probably have to be some legal action to get that going; I don't know. Ultimately the advisor will smirk, say "oh I didn't know" and go on his/her merry way. -
Unfortunately this raises questions about past practices, like whether full appraisals were done every year. Assuming yes, about which I have to be skeptical, then I think the only option would be to carve out these illiquid assets and leave them as pooled and the rest self-directed. If the owner keeps them you have a BRF issue as noted.
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RMDs after inherited IRA bene dies
Bird replied to Bird's topic in Distributions and Loans, Other than QDROs
ok thanks -
RMDs after inherited IRA bene dies
Bird replied to Bird's topic in Distributions and Loans, Other than QDROs
bumping this; someone must have thoughts...? -
Mr. X has his own IRA, is receiving RMDs on that, and is receiving distributions as a beneficiary of an inherited IRA from his father. He passes away in 2023. His wife gets part of both IRAs and his niece gets part of both. Someone decided it was ok to combine the personal IRA proceeds and the inherited IRA, and set up one IRA for the spouse and one for the niece. Is that ok? I'd think that the inherited IRA has to continue at the payout method set up, so if the spouse claims the new commingled IRA as her own, that would be stretching out the inherited IRA payments longer than they otherwise should be. The niece's part would probably be ok under the 10 year rule although I'm not sure what the remaining payout period was on the inherited IRA so maybe not. I appreciate any thoughts. I'm not sure I've seen a situation with the death of an inherited IRA beneficiary but it doesn't seem like you should be able to ignore the original payout method on it.
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Assuming you are talking about a DC plan, it is a circular calc; it boils down roughly to 25% of (covered) W-2 comp plus (roughly*) 20% of Schedule C. *There is an adjustment for 1/2 of SS taxes; after that it is 20%. Also note the Schedule C should reflect the employer contributions for employees, so if you are a TPA and are given the raw Schedule C by the accountant, you have to adjust for that as well.
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I never ever ever showed fees in a pooled environment. First of all, I don't trust what shows on the statements, second of all, it is inherently unfair (you could have a mutual fund that just shows net returns with no stated fees, vs. a managed account which nets out to the same fees but the fees are direct, or even the same mutual fund with different fee structures; that is, the same management fee baked in but the advisor fee could either be built in or charged separately). These issues are not unique to pooled plans, but at least there's no requirement to show them on the statements.
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Assuming a self-directed platform, loan payments will generally go into the investment "mix" selected by the participant for contributions.
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Yes it is possible. Generally, your employER contribution is going to drop from a max of 25% to 6%. After taking into account the max 401k deferral and the 6% max employER, the remaining money already contributed might be able to be considered an after tax contribution. If you are a sole proprietor, it's fairly easy. If you are operating a corporation and getting W-2 income, not so easy. It might be considered aggressive because in theory the money going in should be designated as what it is when it goes in.