Question

ITEM SET 1: RETIREMENT PLAN DISTRIBUTIONS has worked on the M et River Pilots Inc. ICRP and Cha deaux is a 58-year old riverboat captain. He grew up in New Orleans and has worked River his entire life. He works for a private company in New Orleans called Crescent River Pilots rrido Patricia, who is 35 years old. They have a seven-year-old son, named River. CRP sponsors sponsors a 401 that offers a Roth account and a separate ESOP. Chad has the following retirement plan accounts Current EMV Benin $400,000 Patricia $800,000 $90,000 Patricia Patricia Account Description ESOP account from CRP-consists of CRP shares. The cost basis for the shares is $75,000. 401(k) Plan From CRP Inc. 401(k) Plan from Schlumberger, where he worked in his thirties Roth IRA (established in 2000 with a $2,000 initial contribution; three years ago he rolled over a traditional IRA with a balance of $10,000 Traditional IRA (established twenty years ago with $15,000 of after-tax contributions) Inherited IRA from the death of his Mama. She died in the same year Chad turned 50 years old. $45.000 Patricia $90.000 River $120,000 River 1. Chad plans on retiring in March of this year, and he and his wife would like to go to Rome for an extendice vacation. He wants to take a distribution of $20,000 from one of his retirement accounts to pay for the vad tion. Which of his retirement plans would allow him to take a penalty-free withdrawal to fund his vacation Arr:

Answer 1

1). Penalty will be applicable for early withdrawal on all of his retirement accounts except for the inherited IRA from his mother. So, he can withdraw from the inherited IRA for his vacation.

2). Chad lives in New Orleans which is not a community or marital property state so spousal consent for changing the beneficiary designation is not required for IRAs.

3). Under federal law, spousal consent is required to change beneficiary designations on non-IRA retirement plans so Chad will require spousal consent for changing beneficiary designations for his 401(k) and ESOP accounts.