Heritage Financial Planning

Lump Sum Distribution

Managing a lump sum distribution in the best way possible

Managing a Lump Sum Distribution

A lump sum distribution is defined by the Internal Revenue Service as the distribution of the entire balance of a financial plan — such as a pension, profit-sharing plan or stock bonus plan — in a single tax year, as opposed to continuing to receive monthly or quarterly partial distributions.

For tax purposes, such a distribution only counts as a lump sum distribution if you or your family receive said distribution because of your death, your reaching the age of 59 ½, your being self-employed and becoming completely and permanently disabled or because you have separated from the service of the employer that initiated the plan.

STEVE BLANKENSHIP | Founder and CEO of Heritage Financial Planning

The Heritage Difference

There are several important reasons to seek out financial advice for lump sum distribution. The first reason is the tricky tax situation that a lump sum payment may create. The methods for determining the taxes on a lump sum distribution vary, and how you pay your lump sum payment tax may differ depending upon when participation began and what you do with the distribution once you receive it.

Though your plan may be dissolved, you may not necessarily just want to keep your lump sum at home or in a savings account. A good financial planner can help you find ways to reinvest that money, based on your long-term objectives.

In and around Dallas, Heritage Financial Planning is the right choice for lump sum payment distribution advice. Our expert fiduciaries have years of experience in financial planning, and we work hard to act in good faith and in your best interests — not our own.

An important benefit of using Heritage Financial Planning for lump sum distribution advice is that we are a fee-only financial services firm. This means if you are receiving a very large lump sum distribution and are concerned about the funds being eaten away by commissions when you try to reinvest it, you can put those fears to rest by working with us.

It’s also important to note that we offer fee-only financial planning, so if you have in-depth, complex questions about the tax on lump sum distribution, you can feel free to talk with our experts until you are fully comfortable.

Finally, keep in mind that we are fiduciaries, not salespeople trying to unload financial products. We are completely independent and have no need to sell you on a particular investment product. We seek out the solution that we believe isis best for you.

Heritage Financial Planning has the tools and experience to be your wealth management firm for lump sum distribution in Dallas and related areas such as Plano, Frisco, Southlake, Fort Worth and Grapevine. For a free financial consultation or to get more information on lump sum distribution issues, please contact us online today.


10440 N Central Expressway
Suite 1540
Dallas, TX 75231