Lump-Sum Distribution

Filed Under »
Dictionary Says

Definition of 'Lump-Sum Distribution'

A one-time payment for the entire amount due, rather than breaking payments into smaller installments. Some lump-sum distributions receive special tax treatment.
Investopedia Says

Investopedia explains 'Lump-Sum Distribution'

A commission check or a pension plan distribution because of the pensioner's death are two examples of lump-sum distributions.

In general, distributions from qualified plans are treated as lump sum, if the following requirements are met:

1. The total plan balance is distributed over the same tax year.

2. The distribution is made as a result of the employee:
- attaining age 59.5
- being deceased (applicable to beneficiaries)
- separating from service (not applicable to self-employed individuals - but applies to their common-law employees) or
- being disabled (applicable only to self-employed individuals).

3. The distribution occurs after five years of participation (this requirements is waived for beneficiaries).
Search results for

'Lump-Sum Distribution'

  • Lump Sum Versus Regular Pension Payments

    http://www.investopedia.com/articles/retirement/05/lumpsumpension.asp
    ... choice regarding your company-sponsored retirement plan: should you accept the
    traditional, lifetime monthly payments or take a lump sum distribution? ...

  • Combining Your Plan Assets? Not So Fast!

    http://www.investopedia.com/articles/retirement/03/051403.asp
    ... Plan Balances Accrued Before 1974 If your qualified-plan account includes balances
    that accrued prior to 1974, and you take a lump-sum distribution from the ...

  • Asset Distributions A Key Consideration For Retirees

    http://www.investopedia.com/articles/retirement/08/qualified-plan-distributions.asp
    ... A lump-sum distribution will be taxed as ordinary income (included in the gross
    income for the tax year it was received) at the applicable tax rates. ...

  • The Foundation Of Structured Settlements

    http://www.investopedia.com/articles/pf/09/structured-settlements.asp
    ... Many structured settlements are not taxable, or may significantly reduce a
    beneficiary's taxes as compared to a lump-sum distribution. ...

  • Upon my death, will the beneficiaries of my IRA be compelled to ...

    http://www.investopedia.com/ask/answers/05/beneficiarytax.asp
    ... are not required to follow the guidelines set in the regulations, some IRA custodians
    require beneficiaries to take a lump-sum distribution after the death of ...

  • Estate Planning Must-Haves For Unmarried Couples

    http://www.investopedia.com/articles/retirement/08/unmarried-couple-documents.asp
    ... In many cases companies discriminate against unmarried couples by forcing the
    non-spouse beneficiary to take a taxable lump-sum distribution of the entire ...

  • Intro To Insurance: Life Insurance Considerations | Investopedia

    http://www.investopedia.com/university/insurance/insurance9.asp
    ... number of ways. The most obvious is the lump sum distribution, which is
    essentially a one-time payment in cash. With an "interest ...

  • The Complete Guide To Retirement Planning For 50-Somethings ...

    http://www.investopedia.com/university/retirement-50/nest-egg.asp
    ... appreciation (NUA). NUA is taxed at the capital gains rate if the stock
    is distributed as a part of a lump-sum distribution. While ...

  • Should You Roll Over Your 401(k)?

    http://www.investopedia.com/articles/retirement/12/should-you-roll-over-your-401k.asp
    ... 2. Roll the money into the next employer's 401(k) plan. 3. Take a lump-sum
    distribution of the money. 4. Leave the money in the plan. ...

  • Introduction To Annuities: The History Of Annuities | Investopedia

    http://www.investopedia.com/university/annuities/
    ... the Boston annuity continued to pay out until the early 1990s, when the city finally
    decided to stop receiving payments and take a lump-sum distribution of the ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links