An option is to name an old parent (or even grandparent) as beneficiary and wait for the parent to die to avoid the 10% penalty with death of beneficiary.
Remember that taxes for non-qualified distributions apply only to the earnings and not the initial contributions, if you have sufficient records. Non-qualified withdrawals are also subject to the ordinary income tax so spread out withdrawals over several years rather than a lump sum in one year. For example, if have 500k in gains, withdrawals at the 37% federal tax rate would be $185k in taxes versus $120k at that 24% rate. Moving to a state with no income tax may also limit some taxes.
Remember that taxes for non-qualified distributions apply only to the earnings and not the initial contributions, if you have sufficient records. Non-qualified withdrawals are also subject to the ordinary income tax so spread out withdrawals over several years rather than a lump sum in one year. For example, if have 500k in gains, withdrawals at the 37% federal tax rate would be $185k in taxes versus $120k at that 24% rate. Moving to a state with no income tax may also limit some taxes.
Statistics: Posted by legalwriter1 — Sun Nov 17, 2024 3:56 am — Replies 2 — Views 193