DECISIONS WHEN RETIRING (T/G 301) covers the major preparatory changes ahead when retiring early (pre-60), regularly, or late (post-70), and the financial options (such as working part-time, "home equity conversion," etc.) for easing dependency on social security, employers' plans, and medicare. Also covered:

• Taxation of social security benefits
• The "exclusion ratio" of annuity payments
• The 18 code symbols on Form 1099-R
• Precautions with IRA rollovers/withdrawals
• Acclimating to estimated tax prepayments
• Twilight year "MUST DO" tasks

Decisions When Retiring
Book:  301

Table of Content

1.  PRE-RETIREMENT PREPARATION                  1-1
    
    Start Talking to Retirees                   1-2
    Set a Target Age                            1-3
    Prepare for Lower Income                    1-4
    Max Out Employer Plans                      1-6
    Consolidate Your IRAs                       1-7
    Prepare for Higher Taxes                    1-9
    Stay Put for Two Years                      1-11
    Study Your Actuarial Odds                   1-13
    Inflation Reality                           1-15

2.  PREMATURE RETIRMENT WOES                    2-1

    “Premature” is under 59 ½                   2-2
    Commence a 3-IRA Plan                       2-3
    Apply for Unemployment Benefits             2-5
    Apply to Temporary Hire Agencies            2-7
    Seek Overseas Employment                    2-10
    Try Being Self-Employed                     2-11
    Seek Government Employment                  2-13
    Delay Sale of Residence                     2-14
    Tap Into Your Inheritance                   2-15
    
3.  SELF-EMPLOYED PERSONS                       3-1
        
    “Net Earnings” Explained                    3-2
    Delay Plan Setups 3 Years                   3-3
    Requirements for Qualification              3-5
    Master & Prototype Plans                    3-6
    Defined Contribution Plans                  3-8
    Ways to Avoid Employees                     3-10
    SEP/IRA: 408 (k) Plans                      3-13
    The “Differential Vesting” Game             3-14
    Importance of Supplemental Savings          3-16
    Be Aware of Form 5500-C/R                   3-18

4.  PLAN DISTRIBUTION OPTIONS                   4-1

    Where the Confusion Starts                  4-2
    Distributions Taxable as Annuities          4-4
    Rollover Option Requires Care               4-6
    Rollovers Other Than Money                  4-8
    Required Explanation of Rollovers           4-9
    Lump-Sum Tax Treatment                      4-11
    Form 4972: Lump-Sum Averaging               4-12
    Three Annuity-Type Choices                  4-13
    Figuring Your “Expected Return”             4-15
    Figuring Your “Exclusion Percentage”        4-17
    Tax-Sheltered Annuities                     4-19
    401 (k) Plan Distributions                  4-21
    Early Distribution Penalties                4-23

5.  DISTRIBUTIONS FROM IRAs                     5-1

    Introduction to the IRA Concept             5-2
    Keep Spousal IRAs Separate                  5-4
    Contributory Confusion: Deductible IRAs     5-5
    Nondeductible IRAs: New Concept             5-7
    Rollovers:  The Real IRA Virtue             5-8
    Distributions of Excess Contributions       5-10
    Treatment of Ordinary Distributions         5-11
    Nonannuity Distributions                    5-12
    Premature Distributions                     5-15
    Over 70 ½ : Distributions Required          5-17
    Figuring Minimum Distributions              5-18
    
6.  UNDERSTANDING FORM 1099-R                   6-1
    
    Introduction to Form 1099-R                 6-2
    The 4 Spaces on Form 1040                   6-4
    Boxes 1, 2a and 2b on 1099-R                6-7
    Box 7: Must Read                            6-8
    Correcting Form 1099-R                      6-10
    Other Boxes on Form 1099-R                  6-11
    IRA Distributees: Get Pub. 590              6-14
    IRA Basis & Form 8606                       6-15
    State Taxables May Differ                   6-17

7.  SOCIAL SECURITY OPTIONS                     7-1

    Full Benefits Age                           7-2
    Complex Formula for Benefits                7-3
    Official Estimate Requests                  7-5
    Application Age Comparisons                 7-6
    Working After Benefits Start                7-7
    SSA to IRS: Form 1099                       7-9
    Two Tiers of Retirement Wealth              7-10
    Overview of IRC Sec. 86                     7-11
    “Modified” Adjusted Gross Income            7-12
    Read Your Form 1040 Instructions            7-14

8.  HOME EQUITY CONVERSION                      8-1

    Common Mistakes Made                        8-2
    Supplement to Social Security               8-3
    Reconstruct Your Tax Records                8-4
    The Former $125,000 Exclusion               8-6
    The New $500,000 Exclusion                  8-7
    Outright Sale Options                       8-8
    Reverse Mortgage Loan (RML)                 8-10
    Home Equity Loan (HEL)                      8-11
    Life Estate Sale                            8-12
    Exchange for Life Care                      8-14
    
9.  MEDICAL EXPENDITURES                        9-1

    Allowance of Deduction                      9-2
    “Medical Care” Tax Defined                  9-3
    Subtract Insurance Reimbursement            9-6
    The 7.5% AGI Threshold                      9-7
    Medicare A: Tax Prepaid                     9-9
    Medicare B: You Pay                         9-11
    Medicare Supplements:  A-J                  9-12
    Nursing Home Care                           9-14
    Private Home Nursing                        9-15
    Durable Power of Attorney                   9-16

10. ESTIMATED TAX:  1040-ES                     10-1
    
    Who Must File ES Forms                      10-2
    Format & Filing Dates                       10-4
    Confusion Over Due Dates                    10-5
    Statutory Backhandedness                    10-7
    A Simple Estimating Way                     10-9
    Penalty Is Foregone Interest                10-11
    Self-Crediting Your Return                  10-13

11. NONRESIDENT STATE RETURNS                   11-1

    State Residency Principles                  11-2
    Spouses in Different States                 11-3
    Part-Year Residency                         11-5
    When leaving a State                        11-7
    Residency Questions                         11-8
    When You Become “Nonresident”               11-10
    Nonresident Taxation Principles             11-12
    How the Ratio Works                         11-13
    Other State Tax Credit                      11-15

12. YOUR FULFILLMENT YEARS                      12-1

    Clear Out Household Junk                    12-2
    Update Basis in Investments                 12-4
    Sell All Portfolio Clutter                  12-5
    Reduce Realty Holdings                      12-7
    The Sanity “Rule of Three”                  12-9
    Routinize Tax Filings                       12-11
    Minimize Trusts & Attorneys                 12-12
    Prepare for Own Demise                      12-14
    Build a Cash Hoard                          12-15
    Pursue a Consuming Project                  12-17