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SMART MONEY: What to do with a lump-sum distribution

by on August 10, 2014 1:49 AM

DEAR BRUCE: I’m 58 years old with no set date for retirement. My former employer sent me a lump-sum distribution of $13,000.

Should I ride with the amount until retirement or roll it over into an IRA? — Warren

DEAR WARREN: You haven’t mentioned if you need the $13,000. If that is not the case, then by all means I would certainly consider rolling it over. That’s because you would have roughly 12 years that the $13,000 can grow without any income tax being assessed against you, which is a considerable savings.

If, in fact, you want the money, that’s a different matter, and it’s entirely possible you will have to pay a rather steep assessment in terms of any income tax that may be due. But if these retirement funds have up until now incurred no tax liability, I would continue with that for the next 12 years.

DEAR BRUCE: I have a question about a neighbor’s tree that not only hangs way over our property line, but is killing my cherry tree. He loves this tree, and he actually had a guy come trim his side, but not mine.

It’s going to cost us about $600 to $1,000 to have it trimmed and hauled away.

Are we the ones who have to pay to have this taken care of, or is it our neighbor’s responsibility to pay for it? — C.F.

DEAR C.F.: Some people just have no sense of responsibility, but your neighbor does have reasonability for any of the tree that comes over on your property. The problem is he either has to agree to pay or you have to sue him.

It is your job to make him understand and accept that reasonability.

The troublesome part is you’ll probably have to spend the money to have the trimming done and hauled away, although $600 to $1,000 seems pretty heavy.

Contact your neighbor, explain the situation and what his responsibilities are. He may accept them. It’s worth a shot.



Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided. The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.
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