Federal Government: Stricter

rollover standard for SUVs

GROUP 5
 DEFINITION OF TERMS
 Federal government
- It is a system of dividing up power between a central national government
and local state governments that are connected to one another by the national
government. Some areas of public life are under the control of the national
government, and some areas are under control of the local governments.
 Rollover
- It means moving or transferring an asset of one investment to another.
 SUV
- It is a powerful vehicle with four-wheel drive that can be driven over
rough ground. It is an abbreviation for 'sport utility vehicle'.
 DEFINE THE PROBLEM

What are the set of standards to

achieve in rolling over from a
retirement plan to an investment?
 OBJECTIVES
1. To create standards or rules.
Standards:
a. Age (60-year-old and above)
b. Tax Rate (12%)
c. Days (50 days)
- failed to abide with this rule, a tax rate of
12% will be charged per week
d. One rollover per year
 OBJECTIVES

2. To provide a standard that could benefit both the

benefactor and manufacturer.

3. To provide a standard that could benefit both the

private and public sector.
 ALTERNATIVES

1. 50-day rollover

2. Direct rollover

3. Trustee-to-trustee rollover
 PREDICT THE
CONSEQUENCES
1. 50-day Rollover
Pros:
 You can invest your assets even though you are not yet
qualified to the standards.
 You have longer time to invest your assets.
Cons:
 Taxes will be withheld from a distribution of the
withdrawal of assets.
 PREDICT THE
CONSEQUENCES

2. Direct Rollover
Pros:
No taxes will be withheld from your transfer amount.
Cons:
 You need to wait for years in order to qualify in the
standard given.
 PREDICT THE
CONSEQUENCES

3. Trustee-to-trustee Transfer
Pros:
 No taxes will be withheld from the transfer
amount.
Cons:
 You need to qualify first in the standards given.
SCENARIO
 MAKE A CHOICE

 We chose the 50-day alternative

because he cannot avail the direct
and trustee-to-trustee transfer since
he hasn’t reached the age of 60
years old yet.
 SENSITIVITY ANALYSIS

The parameters that one needs to note while

doing the above choice is:
• Assess risks and potential error
• Re-evaluate risks based on specific adjustments
• Compare investment models by demonstrating how
profitability depends on underlying model data or
other assumptions.