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Advisor Insights

4 Dumb Answers About IRAs and Retirement Plans

Natalie Choate shares some of the incorrect statements she's heard from IRA providers and plan administrators.

As a professional advisor helping clients with their IRAs and retirement plans, you meet your share of plan administrators who don't know what they're talking about. Here's a collection of erroneous statements that advisors have heard from IRA providers and plan honchos over the years--all true stories. When you hear one of these bloomers, you know the "expert" you're speaking with is talking through his or her hat.

From a 401(k) administrator to a deceased employee's son who was named as beneficiary of the plan: "We can't roll these death benefits to an IRA for you. All we can do is give you a lump sum distribution check." Wrong! Since 2009, qualified retirement plans have been required to offer the option of a "direct rollover" of death benefits to an inherited IRA for the designated beneficiary. This plan administrator needs to catch up with that law change.