Lila Thompson is a remarkable 58-year-old marine biologist with a lifelong passion for exploring and preserving...
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Lila Thompson is a remarkable 58-year-old marine biologist with a lifelong passion for exploring and preserving the delicate ecosystems of the California coast. Hailing from the vibrant city of San Francisco, Lila's dedication to her career has led her on a journey to unravel the mysteries of marine life. She has spent years working diligently at the Pacific Marine Research Institute (PMRI), delving into the intricate relationships that shape the underwater world. With her inquisitive spirit and extensive knowledge. Lila has contributed significantly to scientific discoveries that aid in the conservation of oceanic environments. Despite her incredible achievements, Lila now faces a pressing financial challenge as she approaches her retirement years. Her devotion to her work has sometimes taken precedence over financial planning, leaving her in need of guidance to secure her future. She seeks our assistance in navigating her retirement accounts, which include a mix of plans from her current and previous employers, as well as personal accounts. Given her diverse retirement investments and the complexity of her financial situation, Lila understands the importance of making informed decisions to optimize her financial security in retirement. PMRI sponsors a 401(k) plan that offers a Roth account and a separate employee stock ownership plan (ESOP). As she envisions spending more time with her wife Liu and their young daughter Marina, Lila's determination to ensure a stable and comfortable retirement is unwavering. Your firm's expertise will play a crucial role in helping Lila streamline her retirement portfolio, make sound investment choices, and ultimately embark on this new phase of life with confidence and peace of mind. Account Description ESOP account from PMRI (Cost Basis of $82,000) 401(k) Plan From PMRI Inc. 401(k) Plan from Oceanographic Research Group (She left in her thirties.) Roth IRA (Established in 2000 with a $2,000 initial contribution but rolled over from a traditional IRA last year.) Traditional IRA (Established twenty years ago with a $10,000 after- tax contribution.) Inherited IRA from mother's passing Current FMV Beneficiary $450,000 Michael $850,000 Michael $95,000 Michael $50,000 Michael $95,000 Marina $130,000 Marina 1. Lila plans on retiring in December of this year, and her and her wife would like to go to Guangzhou for an extended vacation. She wants to take a distribution of $25,000 from one of her retirement accounts to pay for the vacation. Which of her retirement plans would allow her to take a penalty-free withdrawal to fund his vacation? (Work through the feasibility of each and justify why or why not.) 2. If Lila retires, what should he do with the PMRI shares and why? Are there any special tax considerations? 3. If Lila were to die, what options would Liu have for satisfying the minimum distribution rules on the Roth IRA account? 4. If Lila took a $25,000 distribution from her traditional IRA to pay for the vacation what would be the tax implications? Lila Thompson is a remarkable 58-year-old marine biologist with a lifelong passion for exploring and preserving the delicate ecosystems of the California coast. Hailing from the vibrant city of San Francisco, Lila's dedication to her career has led her on a journey to unravel the mysteries of marine life. She has spent years working diligently at the Pacific Marine Research Institute (PMRI), delving into the intricate relationships that shape the underwater world. With her inquisitive spirit and extensive knowledge. Lila has contributed significantly to scientific discoveries that aid in the conservation of oceanic environments. Despite her incredible achievements, Lila now faces a pressing financial challenge as she approaches her retirement years. Her devotion to her work has sometimes taken precedence over financial planning, leaving her in need of guidance to secure her future. She seeks our assistance in navigating her retirement accounts, which include a mix of plans from her current and previous employers, as well as personal accounts. Given her diverse retirement investments and the complexity of her financial situation, Lila understands the importance of making informed decisions to optimize her financial security in retirement. PMRI sponsors a 401(k) plan that offers a Roth account and a separate employee stock ownership plan (ESOP). As she envisions spending more time with her wife Liu and their young daughter Marina, Lila's determination to ensure a stable and comfortable retirement is unwavering. Your firm's expertise will play a crucial role in helping Lila streamline her retirement portfolio, make sound investment choices, and ultimately embark on this new phase of life with confidence and peace of mind. Account Description ESOP account from PMRI (Cost Basis of $82,000) 401(k) Plan From PMRI Inc. 401(k) Plan from Oceanographic Research Group (She left in her thirties.) Roth IRA (Established in 2000 with a $2,000 initial contribution but rolled over from a traditional IRA last year.) Traditional IRA (Established twenty years ago with a $10,000 after- tax contribution.) Inherited IRA from mother's passing Current FMV Beneficiary $450,000 Michael $850,000 Michael $95,000 Michael $50,000 Michael $95,000 Marina $130,000 Marina 1. Lila plans on retiring in December of this year, and her and her wife would like to go to Guangzhou for an extended vacation. She wants to take a distribution of $25,000 from one of her retirement accounts to pay for the vacation. Which of her retirement plans would allow her to take a penalty-free withdrawal to fund his vacation? (Work through the feasibility of each and justify why or why not.) 2. If Lila retires, what should he do with the PMRI shares and why? Are there any special tax considerations? 3. If Lila were to die, what options would Liu have for satisfying the minimum distribution rules on the Roth IRA account? 4. If Lila took a $25,000 distribution from her traditional IRA to pay for the vacation what would be the tax implications?
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Answer rating: 100% (QA)
1 To determine which of Lilas retirement plans would allow her to take a penaltyfree withdrawal of 25000 for her vacation we need to consider the different account types and their withdrawal rules a E... View the full answer
Related Book For
Contemporary business 2012 update
ISBN: 978-1118010303
14th edition
Authors: Louis E. Boone, ? David L. Kurtz
Posted Date:
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