Randy is entitled to receive monthly payments of $2,500 over his life from his employer's qualified pension plan or he can take $2,300 over his life and the life of his wife. The payments begin May 1, 2015. Randy contributed $106,000 to the plan prior to his retirement. Randy is 67 and his wife is 65. Using the simplified method, how much of the payments will be included in Randy's income for 2015 in each of the following independent situations?
a. Randy chooses to take payments of $2,500 over his life.
b. Randy chooses to take payments of $2,300 over his life and the life of his wife.

Question

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The Answer of Randy is entitled to receive monthly payments of $2,500 over his life from his employer's qualified pension plan or he can take $2,300 over his life and the life of his wife. The payments begin May 1, 2015. Randy contributed $106,000 to the plan prior to his retirement. Randy is 67 and his wife is 65. Using the simplified method, how much of the payments will be included in Randy's income for 2015 in each of the following independent situations?
a. Randy chooses to take payments of $2,500 over his life.
b. Randy chooses to take payments of $2,300 over his life and the life of his wife.

Randy Is Entitled to Receive Monthly Payments of $2,500 Over