TP Select the forms below, print and fill out. Mail completed forms to: SRC Benefits Group, Ltd. P.O. Box 1820 West Chester, Ohio 45071 • Or FAX to: 513.759.8160 “MAKE YOUR PENSION BUYOUT WORK FOR YOU!” Pension buyouts are far more common than people realize. Poor management of the pension payout is also very common. Therefore, it is critical for you to seek professional guidance from a reputable financial advisor before making any decisions with your pension funds. Remember, these funds have been earmarked for retirement and a termination of employment shouldn't destroy the true nature of these funds. Now, let's approach this topic from a realistic standpoint: How will your pension check be treated by the IRS? The unfortunate answer to this question is…not very nicely! If the recipient of a pension buyout option receives the proceeds in a lump sum payment, then there will be a 20% withholding. You have no choice in the matter. It is then up to the recipient to also claim the remainder on their income tax return for the calendar year in which it was received. This could result in one of three outcomes: • 1. minimizing your income refund check • 2. Completely nullify any refund check that you planned on receiving • 3. Creating a debt to the IRS because of an inflated income which would result in the recipient sending a check to the IRS to cover any tax liabilities owed. This doesn't even include any State Tax liabilities! To avoid unfavorable tax consequences you will have the option of rolling that pension buyout lump sum directly into an Individual Retirement Account (IRA). The monies rolled into an IRA will not be subject to withholding and will grow tax-deferred until retirement, or age 59 ½ -whichever happens later. Based on a $100,000 lump sum buyout, this would be the difference of cashing an $80,000 check, or directing the full lump sum of $100,000 into an IRA to grow tax-deferred until retirement. At 8%, that $100,000 would grow tax-deferred to $330,692 in 15 years! This presents multiple opportunities for strong, tax-deferred growth in an account that can remain earmarked for retirement. You may also open up the opportunity of creating a stream of income during retirement for both you and your spouse in the form of an annuity. The important thing to remember is that you must explore all of your options before making any big decisions. You can never seek too much advice! Taking the buyout can also create some ancillary issues that must be considered, such as medical insurance and other insurance coverage's previously provided by your employer Again, consulting with an insurance professional and/or financial advisor to help address these many concerns is the prudent thing to do.   Copyright (C) 2006 SRC Benefits, All Rights Reserved  -  Contact Us at customerservice@srcbenefits.com Website Design by PLA Designs