In Brief: Oct. 18, 1999

LAST CHANCE This is the last year you can use the "five-year-averaging" rule to lower the taxes on lump-sum distributions on retirement plans. Next year such distributions will be taxed as income or as a capital gain. A 10-year tax option will still be available but only to those born before 1936. These rules don't apply to an IRA or 403(b), and not everyone is eligible. Unless you need the cash immediately, you're better off rolling it over into an IRA.

$100,000 LUMP-SUM DISTRIBUTION

$15,000 in taxes using 5-year averaging VS. $28,000 in taxes for those in the 28% bracket

HMO...

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