Lump-Sum Distribution
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 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). |
Related Definitions
Articles Of Interest
-
Selecting The Payout On Your Annuity
Make sure you understand your options for withdrawing your funds from this complex instrument. -
Live Longer, Retire Younger: Can You Do It?
Use this vehicle to make sure your payout lasts as long as you do. -
8 Ways To Help Family Members In Financial Trouble
Find out how to help the ones you love without hurting yourself. -
Pension Law Could Reduce Your Payout
Discover how this act negatively affects your lump-sum withdrawals. -
How do my siblings and I receive inherited pension benefit payments from our deceased parent?
Generally, the provisions of the plan document determine the distribution options available to beneficiaries of retirement plan assets. From a regulatory perspective, you are allowed to distribute ... -
Lump Sum Versus Regular Pension Payments
If you're about to retire, you may be facing this dilemma soon. Find out what your options are. -
Money Tips To Stretch Your Retirement Nest Egg
Learn the key investment and savings tips you need to ensure your retirement savings last as long as you do. -
How To Start Saving For Retirement
If you establish these money-saving habits and patiently allow your wealth to build, you will be taking some huge steps forward in making your financial future more secure. -
An Introduction To The Keogh Retirement Plan
Learn more about this popular defined-contribution retirement plan that many business owners, proprietors, and self-employed people can benefit from. -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government.
Free Annual Reports