Ask the tax adviser
Managing lump-sum payouts
Dear Tax Talk:
When I was 70½, I took a lump-sum retirement
and rolled it over. I am still working, and each year I am given
another lump sum for that year because my employer must still contribute
to my retirement fund. The company tells me that this money cannot
be rolled over, and I pay my taxes on this. Others tell me different.
If you didn't retire at age 70½ and you're not the owner
of the business, you should still be able to accumulate your pension
funds in the employer's qualified plan or in an individual retirement
If the money is being paid to you, you should have
your employer confirm with the pension-plan consultant why the funds
can't remain in the employer's plan.
It may be that the plan's governing document requires
amendment to allow you to continue to accumulate past age 70½.
At a minimum, these funds should also be eligible
to be rolled over to an IRA. However, because of your age, minimum
distributions from the IRA are required.
-- Posted: Feb. 5, 2002