Image alt tag

Error!

X

There was a problem contacting the server. Please try after sometime.

Sorry, we are unable to process your request.

Error!

X

We're sorry, but the Insights and Intelligence Tool is temporarily unavailable

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Error!

X

We're sorry, but the Literature Center checkout function is temporarily unavailable.

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Tracked Funds

You have 0 funds on your mutual fund watch list.

Begin by selecting funds to create a personalized watch list.

(as of 12/05/2015)

Pending Orders

You have 0 items in your cart.

Subscribe and order forms, fact sheets, presentations, and other documents that can help advisers grow their business.

A verification Email Has Been Sent

Close

An email verification email has been sent to .
Follow the instructions to complete the email validation process.

I have not received my verification email

Check your SPAM mailbox and make sure that twelcome@lordabbett.com is allowed to send you mail.

I'm still having trouble

If you're still having trouble verifying your email address. feel free to contact us.

1-888-522-2388
clientservices@lordabbett.com


OK

We're sorry. We found no record of the email address you provided.

Close

Register For a LordAbbett.com Account
Using Your Email Address.

  • Registered Financial Advisors gain access to:
  • Our data mining tool, Insight & Intelligence
  • Best in-class practice management content
  • Educational events, videos and podcasts.
  • The Lord Abbett Review - Subscribe now!

Registered but Having Problems?

If you believe you are registered and are having problems verifying your email address, feel free to contact us.

1-888-522-2388 clientservices@lordabbett.com

Terms & Condition

X

These Terms of Use ("Terms of Use") are made between the undersigned user ("you") and Lord, Abbett & Co. ("we" or "us"). They become effective on the date that you electronically execute these Terms of Use ("Effective Date").

A. You are a successful financial consultant that markets securities, including the Lord Abbett Family of Funds;

B. We have developed the Lord Abbett Intelligence System (the "Intelligence System"), a state of the art information resource that we make available to a limited community of broker/dealers through the Internet at a secure Web site (the "LAIS Site"); and

C. We wish to provide access to the Intelligence System to you as an information tool responsive to the demands of your successful business pursuant to these Terms of Use. Accordingly, you and we, intending to be legally bound, hereby agree as follows:]

1. Overview. · Scope. These Terms of Use (which we may amend from time to time) govern your use of the Intelligence System. · Revisions; Changes. We may amend these Terms of Use at any time by posting amended Terms of Use ("Amended Terms of Use") on the LAIS Site. Any Amended Terms of Use will become effective immediately upon posting. Your use of the Intelligence System after any Amended Terms of Use become effective will be deemed to constitute your acceptance of those Amended Terms of Use.We may modify or discontinue the Intelligence System at any time, temporarily or permanently, with or without notice to you. Purpose of the Intelligence System. The Intelligence System is intended to be an information resource that you may use to contribute to your business research. The Intelligence System is for broker/dealer use only; it is not to be used with the public in oral, written or electronic form. The information on the Intelligence System and LAIS Site is for your information only and is neither the tax, legal or investment advice of Lord Abbett or its third-party sources nor their recommendation to purchase or sell any security.

2. Your Privileges. · Personal Use. Your use of the Intelligence System is a nontransferable privilege granted by us to you and that we may deny, suspend or revoke at any time, with or without cause or notice. · Access to and Use of the Intelligence System. The User ID and password (together, an "Access ID") issued by us to you (as subsequently changed by you from time to time) is for your exclusive access to and use of the Intelligence System. You will: (a) be responsible for the security and use of your Access ID, (b) not disclose your Access ID to anyone and (c) not permit anyone to use your Access ID. Any access or use of the Intelligence System through the use of your Access ID will be deemed to be your actions, for which you will be responsible. · Required Technology. You must provide, at your own cost and expense, the equipment and services necessary to access and use the Intelligence System. At any time, we may change the supporting technology and services necessary to use the Intelligence System. · Availability. We make no guarantee that you will be able to access the Intelligence System at any given time or that your access will be uninterrupted, error-free or free from unauthorized security breaches.

3. Rights in Data. Our use of information collected from you will be in accordance with our Privacy Policy posted on the LAIS Site. Our compliance with our Privacy Policy will survive any termination of these Terms of Use or of your use of the Intelligence System.

4. Your Conduct in the Use of the Intelligence System. You may access, search, view and store a personal copy of the information contained on the LAIS Site for your use as a broker/dealer. Any other use by you of the Intelligence System and the information contained on the LAIS Site these Terms of Use is strictly prohibited. Without limiting the preceding sentence, you will not: · Engage in or permit any reproduction, copying, translation, modification, adaptation, creation of derivative works from, distribution, transmission, transfer, republication, compilation or decompilation, reverse engineering, display, removal or deletion of the Intelligence System, any portion thereof, or any data, content or information provided by us or any of our third-party sources in any form, media or technology now existing or hereafter developed, that is not specifically authorized under these Terms of Use.

· Remove, obscure or alter any notice, disclaimer or other disclosure affixed to or contained within the Intelligence System, including any copyright notice, trademark and other proprietary rights notices and any legal notices regarding the data, content or information provided through the Intelligence System.

· Create a hyperlink to, frame or use framing techniques to enclose any information found anywhere on the LAIS Site without our express prior written consent.

· Impersonate any person, or falsely state or otherwise misrepresent his or her affiliation with any person in connection with any use of the Intelligence System.

· Breach or attempt to breach the security of the Intelligence System or any network, servers, data, or computers or other hardware relating to or used in connection with the Intelligence System; nor (b) use or distribute through the Intelligence System software or other tools or devices designed to interfere with or compromise the privacy, security or use of the Intelligence System by others or the operations or assets of any person.

· Violate any applicable law, including, without limitation, any state federal securities laws. 5. Your Representations and Warranties. You hereby represent and warrant to us, for our benefit, as of the time of these Terms of Use and for so long as you continue to use the Intelligence System, that (a) you are, and will continue to be, in compliance with these Terms of Use and any applicable laws and (b) you are authorized to provide to us the information we collect, as described in our Privacy Policy.

6. Disclaimer of Warranties.

· General Disclaimers.

THE INTELLIGENCE SYSTEM, THE LAIS SITE AND ALL DATA, INFORMATION AND CONTENT ON THE LAIS SITE ARE PROVIDED "AS IS" AND “AS AVAILABLE” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND. WITHOUT LIMITING THE PRECEDING SENTENCE, LORD ABBETT, ITS AFFILIATES, AGENTS, THIRD-PARTY SUPPLIERS AND LICENSORS, AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, DIRECTORS, OFFICERS AND SHAREHOLDERS (COLLECTIVELY, THE “LORD ABBETT GROUP”) EXPRESSLY DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NONINFRINGEMENT. YOU EXPRESSLY AGREE THAT YOUR USE OF THE LAIS SITE, THE INTELLIGENCE SYSTEM, AND THE DATA, INFORMATION AND CONTENT PRESENTED THERE ARE AT YOUR SOLE RISK AND THAT THE LORD ABBETT GROUP WILL NOT BE RESPONSIBLE FOR ANY (A) ERRORS OR INACCURACIES IN THE DATA, CONTENT AND INFORMATION ON THE LAIS SITE AND THE INTELLIGENCE SYSTEM OR (B) ANY TERMINATION, SUSPENSION, INTERRUPTION OF SERVICES, OR DELAYS IN THE OPERATION OF THE LAIS SITE OR THE INTELLIGENCE SYSTEM.

· Disclaimer Regarding Investment Research.

THE INTELLIGENCE SYSTEM INCORPORATES DATA, CONTENT AND INFORMATION FROM VARIOUS SOURCES THAT WE BELIEVE TO BE ACCURATE AND RELIABLE. HOWEVER, THE LORD ABBETT GROUP MAKES NO CLAIMS, REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TIMELINESS, COMPLETENESS OR TRUTHFULNESS OF SUCH DATA, CONTENT AND INFORMATION. YOU EXPRESSLY AGREE THAT YOU ARE RESPONSIBLE FOR INDEPENDENTLY VERIFYING YOUR INVESTMENT RESEARCH PRIOR TO FORMING YOUR INVESTMENT DECISIONS OR RENDERING INVESTMENT ADVICE. THE LORD ABBETT GROUP WILL NOT BE LIABLE FOR ANY INVESTMENT DECISION MADE BY YOU OR ANY OTHER PERSON BASED UPON THE DATA, CONTENT AND INFORMATION PROVIDED THROUGH THE INTELLIGENCE SYSTEM OR ON THE LAIS SITE.

· Survival.

THIS SECTION 6 SHALL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM..

7. Limitations on Liability.

NONE OF THE MEMBERS OF THE LORD ABBETT GROUP WILL BE LIABLE TO YOU OR ANY OTHER PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES (INCLUDING LOSS OF PROFITS, LOSS OF USE, TRANSACTION LOSSES, OPPORTUNITY COSTS, LOSS OF DATA, OR INTERRUPTION OF BUSINESS) RESULTING FROM, ARISING OUT OF OR IN ANY WAY RELATING TO THE INTELLIGENCE SYSTEM, THE LAIS SITE OR YOUR USE THEREOF, EVEN IF THE LORD ABBETT GROUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION 7 WILL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM.

8. Miscellaneous Provisions.

· Governing Law. This Agreement will governed by and construed in accordance with the laws of the State of New York, without giving effect to applicable conflicts of law principles.

THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT OR ANY VERSION THEREOF, ADOPTED BY ANY STATE, IN ANY FORM ("UCITA") WILL NOT APPLY TO THESE TERMS OF USE. TO THE EXTENT THAT UCITA IS APPLICABLE, THE PARTIES HEREBY AGREE TO OPT OUT OF THE APPLICABILITY OF UCITA PURSUANT TO THE OPT-OUT PROVISION(S) CONTAINED THEREIN.

The Intelligence System is not intended to be used by consumers, nor are the consumer protection laws of any jurisdiction intended to apply to the Intelligence System. You agree to initiate and maintain any action, suit or proceeding relating to these Terms of Use or arising out of the use of the Intelligence System exclusively in the courts, state and federal, located in or having jurisdiction over New York County, New York.

YOU HEREBY CONSENT TO THE PERSONAL JURISDICTION AND VENUE OF THE COURTS, STATE AND FEDERAL, LOCATED IN OR HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK. YOU AGREE THAT YOU WILL NOT OBJECT TO A PROCEEDING BROUGHT IN YOUR LOCAL JURISDICTION TO ENFORCE AN ORDER OR JUDGMENT OBTAINED IN NEW YORK.

· Relationship of Parties. The parties to these Terms of Use are independent contractors and nothing in these Terms of Use will be construed as creating an employment relationship, joint venture, partnership, agency or fiduciary relationship between the parties.

· Notice. All notices provided under these Terms of Use will be in writing and will be deemed effective: (a) when delivered personally, (b) when received by electronic delivery, (c) one business day after deposit with a commercial overnight carrier specifying next day delivery, with written verification of receipt, or (d) three business days after having been sent by registered or certified mail, return receipt requested. We will only accept notices from you in English and by conventional mail addressed to: General Counsel Lord, Abbett & Co. 90 Hudson Street Jersey City, N.J. 07302-3973 We may give you notice by conventional mail or electronic mail addressed to the last mail or electronic mail address transmitted by you to us.

· Third-Party Beneficiaries. The members of the Lord Abbett Group are third-party beneficiaries of the rights and benefits provided to us under these Terms of Use. You understand and agree that any right or benefit available to us or any member of the Lord Abbett Group hereunder will also be deemed to accrue to the benefit of, and may be exercised directly by, any member of the Lord Abbett Group to the extent applicable.

· Survival. This Section 8 will survive any termination of these Terms of Use or your use of the Intelligence System. The undersigned hereby signs these Terms of Use. By electronically signing and clicking "Accept" below, these Terms of Use will be legally binding on me. To sign these Terms of Use, confirm your full name and enter your User ID and Password (as your electronic signature) in the fields indicated below and click the “I Accept” button.

Reset Your Password

Financial Professionals*

Your password must be a minimum of characters.

Confirmation Message

Your LordAbbett.com password was successully updated. This page will be refreshed after 3 seconds.

OK

 

Retirement Perspectives

An often overlooked rule allows individuals to withdraw early from their IRAs, providing certain conditions are met.

Do you have any clients who need additional income or who have large IRA account balances, including SEP and SIMPLE IRAs, and would like to consider an early retirement? What stops them from taking the money? Many times, it’s fear of the tax consequences of their actions. Most people understand that IRA distributions are taxable, and they also are aware that if they start taking distributions before they turn 59½, they likely will pay an additional 10% early-withdrawal penalty on the taxable portion of the distribution. (After-tax dollars are not taxed when distributed and are not subject to a 10% penalty.)

But they may be mistaken. Internal Revenue Code (IRC) Section 72(t)(2)(A)(iv) permits withdrawals— referred to as “Section 72(t)”  distributions —from IRAs prior to age 59½ without imposing the 10% early withdrawal penalty under the following circumstances:

  • Distributions must be made at least annually for five years or attainment of age 59½, whichever comes later.
  • Distribution amounts must be determined under one of three IRS-sanctioned methods outlined in IRS Notice 89-25 and substantiated in Revenue Ruling 2002-62.

The distribution method chosen will affect the amount of the annual distribution. What are the three IRS-sanctioned methods?

Method #1: The life-expectancy method, or required minimum distribution (RMD)—Under this method, annual distributions are based on the IRA’s value divided by the life expectancy of the account at the time distributions commence. This method requires an account owner to use one of the tables provided by the IRS, which include “Single Life Expectancy,” “Uniform Life Expectancy,” and “Joint Life and Last Survivor Expectancy” tables.  Distributions fluctuate yearly as the account holder ages and the value of the account changes. This method is the easiest to calculate but generally provides the lowest annual amount.

Method #2: The amortization method—here, the IRA is amortized using a fixed interest rate prescribed by IRS regulations over a term equal to the account owner’s life expectancy. The IRS has ruled that a reasonable rate of interest is not more than 120% of the midterm applicable federal rate.

A different, higher interest rate could be used, but then it would require the account owner to prove the rate selected was reasonable, should the IRS inquire. This method generally provides a larger annual payout compared with the RMD method. Although this method requires a complex calculation, the amount is fixed so the calculation is only performed once.

Method #3: The annuity method is similar to the amortization method, in that it uses the same interest rate and life expectancy, but then introduces a mortality table prescribed by regulation to pay out the IRA account as if it were an annuity. Like the amortization method, the annual payout is fixed at the time distributions commence and does not vary from year to year.

Weighing the Choices
Each method is designed to produce substantially equal periodic payments (SEPP). If an individual elected the amortization or annuity method and used an interest rate that was subsequently deemed not reasonable or if the account owner failed to continue taking the required payments for the requisite time period under any method, the IRS can assess the 10% penalty retroactively to the first year distributions began, as well as impose interest and penalties for underpayment of taxes.

As of February 2015, the IRS’s current monthly interest rate that is used to calculate distributions in the amortization and annuity methods was 2.02%. For example, for a 55-year-old with a $100,000 IRA, the amortization method would produce the largest payout of $4,261 annually until the account owner reaches 59½. Under the same scenario, the annuity method would produce annual payments of $4,248, and the life-expectancy method would produce the lowest annual payout of $2,924. (Lord Abbett offers an online 72(t) payment plan calculator that can be found in the Resource area of our website, under “Retirement Calculators.”)

Different ages and interest-rate changes could produce different results. [Please review all scenarios with a tax professional before initiating a 72(t) pay down for your clients.]

Modifying a SEPP
Government rules require a SEPP to continue for five years or until an individual reaches age 59½, whichever is longer. Once a SEPP commences, an investor is not permitted to make any contributions or additional distributions. Any changes to the account are deemed modifications and could “break” the agreement and subject the plan to extra taxes, penalties and interest.

If, after starting systematic withdrawals, the individual in the example wanted to modify the payments for any reason, including market losses, he/she may do so once by switching to the life-expectancy method, which would then be used for the payment duration. Individuals can switch only once and only to the life-expectancy method. Otherwise, the only ways to stop the withdrawals are to satisfy the later of five years or 59½, or to exhaust the account

Constant-dollar systematic withdrawal plans operating in a down market potentially can deplete an account rapidly. The IRS shows individuals in this situation some mercy. If an individual’s IRA runs out of money before the prescribed time and/or age, the IRS does not consider that a modification that would trigger a 10% penalty on already-distributed funds, assuming the initial payment schedule was followed. Payments can be halted upon the death or injury of the account owner.

Multiple Accounts
The substantially equal payments are distributed from a single IRA or a combination of IRAs. If the 55-year-old individual wants to take an annual amount less than $4,261, based on having more than $100,000 in his/her IRA account, the account could be split into two or more IRAs. The nonpaying IRA(s) could then be utilized if additional distributions were needed at another point before age 59½ under the methods described above, or for some other purpose, including simply being left to accumulate splitting IRAs, in order to have one IRA function as the distribution funding source, avoids tying up more IRA assets than necessary to achieve the desired result.

Any trailing distributions from qualified plans that take place once the Section 72(t) distribution commences should be contributed to a nonpaying (or new) IRA to avoid triggering a modification (e.g., contribution or distribution in excess of the 72(t) calculated amount) of the payment plan and the imposition of the 10% penalty on the amounts already distributed. Similarly, individuals should make new IRA contributions to the non-paying account, to make sure the IRA being used to produce the additional income is not modified.

Roth IRA Conversion
Under the Roth IRA regulations, an amount being received under Section 72(t) can be converted to a Roth IRA without incurring a modification of the payments. Taxes based on the client’s tax rate at the time of conversion would be payable on the entire IRA account balance being converted, and distributions of already taxed money would continue.

Potential Pitfalls
Here’s one trap for the unwary, though. Let’s say our 55-year-old above turns 59½ in 2020 and takes $4,261 per year through 2020. The five-year rule is not satisfied until 2020 ends. This person could not take an additional payment amount from this IRA until 2021 without tax ramifications.

For example, taking an additional $2,000 above the $4,261 after reaching age 59½, but before the end of 2020, would trigger the 10% penalty on all distributions made before age 59½. Prior to beginning payment know your end date.  Further, check each year in December confirming total annual distributions.

A series of substantially equal periodic payments under Section 72(t) can be a very attractive supplemental or retirement income source; but be sure that the tax implications attached to distributions commencing, and perhaps stopping, as well as what can happen to the investment itself, are understood by all parties concerned, especially the taxpayer. 
  

ABOUT THE AUTHOR

 

Please confirm your literature shipping address

Please review the address information below and make any necessary changes.

All literature orders will be shipped to the address that you enter below. This information can be edited at any time.

Current Literature Shipping Address

* Required field