ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, July 1, 1996 TAG: 9607010012
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: MONEY MATTERS
SOURCE: MAG POFF
Q: When a person dies, what happens to the IRA money in terms of taxes? If you have the beneficiary as a trust, are there any taxes deducted from it, or is the account liquidated at full value into the trust?
A: When a person dies, distributions will be made to the designated beneficiary, according to Walter C. Jones, a certified public accountant with the Roanoke firm of Budd, Ammen & Co. Income taxes will be due on the distributions as they are received.
Jones said requirements for withdrawing the IRA funds differ. The answer depends on whether required minimum distributions have begun, normally at age 70 1/2.
If the minimum distributions have not begun, Jones said, the entire interest of the individual must be distributed by:
Dec. 31 of the fifth year following the year of the owner's death; or
Over the life of the designated beneficiary.
In the case of a trust, Jones said, the life is defined as the life expectancy of the designated beneficiary of the trust.
If the distributions had begun prior to death, he said, the withdrawals must continue at least as rapidly as under the method being used at the time of death.
Sharp eye catches figure discrepancies
Q: Enclosed are copies of two fliers from two different years advertising the Janus Fund automatic investment program.
The first one states that $50 a month invested for 20 years ended March 31, 1994, would yield a balance of $93,018.
The other one says that the same $50 investment over a period of 20 years ended March 31, 1995, would yield a balance of $176,888.
Even considering the possibility of a very bad year in 1974 and a very good year in 1995, this difference of $83,870 seems quite drastic. Can these figures be correct?
A: You are sharp-eyed to notice this discrepancy. You are quite right that the figures are incorrect.
Lorrie Weiser, spokeswoman for the Janus Fund in Denver, said the figure of $93,018 for the 20 years ended March 31, 1994, is correct.
She said an editorial error appeared for the flier published the next year. The figure of $176,888 is the amount that would have accrued if someone had invested in the Janus Fund for the 25 years since its inception in 1970.
Weiser said the correct figure for the 20 years ended March 31, 1995, would have been $86,375. She had no explanation for the fact this is lower than the one for 1994. It could range from bad information in the computer to a bad year for the fund in 1994-1995 or a good year in 1974.
How to find scholarship
for adult student
Q: I'm over 30 years old. I'm looking for some kind of assistance for adults to go to college. Everywhere I go, there are scholarships for students just graduating from high school. I wonder if there's any type of aid for adults.
A: Elizabeth Weise, scholarship coordinator at Virginia Tech, said there's one large national program for adults founded by Orville Redenbacher, the late head of the popcorn company. To win a scholarship from this organization, you must be at least 30 years old and preparing to enroll in a degree program. This can be part-time, full-time, as an undergraduate or graduate student.
To inquire about this money, write to Orville Redenbacher Second Start Scholarship Program, P.O. Box 39101, Chicago, Ill. 60636.
Weise said people of your age are qualified to apply to any college for financial aid. She urged you to fill out the federal student assistance form and send it to colleges in which you are interested. You have nothing to lose, she pointed out, and there is no cost to apply. She said that a divorcee your age, who has two children, is receiving financial aid to attend Virginia Tech. Most aid programs are open to students of any age.
You might also try reading a book that Weise recommended. It is "Winning Scholarships for College" by Marianne Ragins, and you should be able to find it in the public library. This book clearly covers all the steps you must take to find assistance, Weise said, and the author has a special section for students older than the traditional college age.
If you have access to the World Wide Web you might take a look at Virginia Tech's page. You can fill in your demographic information to determine the type of aid for which you qualify. Call up http://wwwfinaid.es.vt.edu/ to reach this page. Other colleges and universities in which you have an interest should have comparable pages.
Try contacting the colleges you would like to attend and filling out the financial aid form.
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