REG — Quick Sheet
Retirement Plans & Tax Planning Basics
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- Traditional: maybe deductible now, taxable later, RMDs required
- Roth: never deductible, tax-free qualified distributions, no lifetime RMDs, income limits to contribute
- Roth qualified = 5-year holding AND (59½ / death / disability / first home)
- Early distribution penalty 10%; exceptions include death, disability, education, first home, SEPP, medical, birth/adoption
- Direct rollover = no withholding; indirect from employer plan = mandatory 20% withholding