I have a new client who engaged me on a hourly basis. He wanted some help to determine the best way to handle a forthcoming distribution from a profit sharing plan and a low 6-figure gain on the sale of his personal residence. He was concerned about taxes and IRAs.
He is 52 years old, divorced with grown kids, moving to a different state, starting a new job and is excited by his prospects.
This current year, he will earn somewhere in the low $30,000s. Next year, he will earn much more, in the mid-to-upper $50,000s.
He wanted to take his $30,000+/- profit sharing distribution as a taxable event and then contribute it to a Roth IRA.
He didn’t have any real plan for the $120,000+/- expected proceed from the sale of his home.
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