Question

1) Discuss the steps required when installing a qualified plan along with any difficulties that may be involved.

2)   Discuss required spousal benefit provisions, including QDROs. Include potential hardships for either spouse as a result of these provisions.  Also, discuss what would likely happen if these provisions were withdrawn.

3)   Discuss situations in which an individual may not be allowed, or may not wish to use, a Roth IRA for retirement planning.

Answer 1

To continue in anything planning about it is very important. Because if you have a plan you may also tackle with the possible flaws coming in the way while executing the plan.

To begin with the QDRO's firstly we should know what does QDRO stands for. Qualified Domestic Relations Order (QDRO). This order has been passed in US at the time of legal separation of the couple or divorce. A QDRO is the type of ownership in a spousal plan, which can be carried out in a way of pension plan or retirement plan for securing the child or the spouse or any dependent in the family. To go with the plan of the filing and getting everything in line with procedure there are steps to be followed in this. Going forth with the first one; the name of the plan should be mentioned; the full name of both the person/spouse should be mentioned; the amount and method of calculation is to be mentioned in the plan in case of separation; and in case the amount is not paid in full/lump sum amount then the duration for the monthly transactions also has to be mentioned. In case of lack of these provisions there would be a-lot of chaos to deal with the legal separation cases/divorce. In technical terms if the same is withdrawn then there would be less dealing in income tax payee as this income which is given to the other person is also included as the taxable income.

Before discussing about the situations in which we do not want to use ROTH IRA system we should know what is ROTH IRA. ROTH IRA is the system of individual retirement plan. And currently it is very much in demand then the traditional retirement plan because of the change in the tax structure one is made with pretax dollars and the other one is opposite. In ROTH IRA plan an individual is not allowed to use or may not wish to use this system is when he/she is having an unreimbursed medical expenses of about 10% of total gross income; or medical insurance are being even after you are unemployed; or the situation is totally recovery assistance distribution and others.