Word: iras
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...this time you've contributed diligently to a plan--especially if your employer matches all or part of your contribution--you could easily have $750,000 or more at retirement. It's the appreciation in the company shares that matters. "We see it all the time," says Joanne Carter, IRA product manager at PaineWebber. "That's why dealing with company stock is a big issue...
...standard advice is to roll all 401(k) assets into a traditional IRA, thus avoiding any taxable distribution while gaining total control over your nest egg. In the long run, though, all such IRA money gets taxed as ordinary income, at rates up to 39.6%. By stripping out the employer shares and placing them in a taxable account, you change the math dramatically. There's an up-front tax hit: the "cost basis" of the employer shares--the amount the plan paid--gets taxed as ordinary income. But the increase in value isn't taxed until you sell the shares...
...cost basis of $100,000. If you are in the 31% tax bracket and take possession of the stock, you will immediately owe $31,000. But the eventual tax on that $400,000 will be just $80,000 for a total tax bite of $111,000. In an IRA rollover the total bite would be $155,000. And by taking possession, you can later pass the stock on to heirs at a stepped-up basis. Your heirs will pay capital-gains tax on the difference between the cost basis and the market value at the time you took the shares...
...against individual needs. The immediate tax bite may not be worth it if you have to use 401(k) assets to pay the bill. And the math doesn't work if your company's stock has been a dud. The diversification issue looms large as well. Rolling into an IRA allows you to sell the stock without triggering a tax liability and then buy mutual funds to reduce risk...
...thing common to all women was that they viewed each session as a search-and-destroy mission," says senior vice president of marketing Anna Zornosa. "They'd come online with a list of five to 12 things they wanted to get accomplished, ranging from 'How do I move my IRA?' to 'My child has this rash'--activities that expressed the range of their entire lives. This medium was built for the modern woman...