Having even a general understanding of how the rules that apply to your retirement account can help you effectively manage your transactions and avoid errors. The following are some of the publications and literature that can be helpful in this area:
Your Employer
Your employer is required to provide you with an explanation of the rules, regulations and terms that govern your retirement account. This includes a summary plan description. Your summary plan description should be written in non-technical language, and cover issues such as eligibility for participating in the plan and receiving employer contributions, requirements for making withdrawals, as well as rules governing any loan provisions.
Financial InstitutionIf you establish IRAs and other retirement accounts the financial institution is required to provide you with information explaining the rules that govern those accounts, including contribution limits, deductibility rules, tax treatment of distributions and when penalties would apply.
Retirement Education Sessions
Employers often hold enrollments and educational seminars for their employees, so as to help ensure that they ( the employees understand their options for saving for retirement under the employer's retirement plan, the benefits of contribution to the plan if salary deferral contributions are allowed, their investment options, the rules regarding withdrawals and, in some cases, the tax impact of distributions as well as distributions strategies that could be considered to minimize tax impact on withdrawals.
IRS Publication 590
This publication provides a general explanation of the rules that govern traditional IRAs, Roth IRAs and your salary deferral contributions to SIMPLE IRAs. Topics covered include eligibility for making contributions, requirements for establishing IRAs, determining eligibility for deducting contributions and claiming the non-refundable tax credit, tax treatment for distributions, when the early distribution penalty applies and how it can be avoided; required minimum distribution rules and penalties that can apply for ineligible contributions.
While it is important and beneficial to educate yourself on how your retirement accounts work, working with professionals can help to ensure that you maximize the benefits available under your accounts, avoide penalties, and minimize income and estate tax.
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by
Denise Appleby is founder and owner of
Appleby Retirement Consulting,which provides technical consultation, content, coaching, writing, editing and training services on related topics.
With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
