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  • 401K withdrawals, IRA rollover

    Has anyone reviewed the advantages and disadvantages of keeping a 401k
    after retirement and withdrawing the required minimum distribution
    amounts vs. rolling the funds over to an IRA under circumstances in
    which one is generally pleased with the performance, expense ratio, and
    investment options of the 401K? (More specifically, we have one 401K
    and one Government Thrift Savings Account.) I understand that one
    advantage of rolling the funds over to an IRA is that there may be tax
    advantages to heirs after my death and that of my wife. However,
    although I can't predict the future, it does not seem likely that there
    will be major tax consequences of that nature. I also have the option
    of taking the 10-year withdrawal option, which could provide some tax
    advantages.

    I understand that there are a number of issues involved, dependant upon
    the particular circumstances, and that they should all be reviewed in
    detail with knowledgeable tax and financial advisors. So far I have met
    with a financial planner and obtained a somewhat comprehensive set of
    recommendations and also discussed related issues with my broker.
    However, although their advice was on a fee-only basis, they seem to
    have a bias, and possibly a financial interest, in directing me toward
    an IRA, preferably one which they or an associated firm would manage,
    and possibly a variable annuity. There seem to be few completely
    independent, fee-based financial advisors, and in particular, few who
    are knowledgeable about the pros and cons of the 10-year withdrawal
    option. (Meanwhile, I have ordered IRS publications 575 and 590, which
    may help.)

    Suggestions and recommendations for further sources will be appreciated.

    Jim Cate


  • #2
    401K withdrawals, IRA rollover

    In article <[email protected]>,
    Jim Cate <[email protected]> wrote:
    Has anyone reviewed the advantages and disadvantages of keeping a 401kafter retirement and withdrawing the required minimum distributionamounts vs. rolling the funds over to an IRA under circumstances inwhich one is generally pleased with the performance, expense ratio, andinvestment options of the 401K? (More specifically, we have one 401K


    Well, a 401k is harder to seize to satisfy certain legal claims.

    And while this does not apply to you, from what you write, those
    who leave emploment in a year that they are at least age 55, can
    take 401k distributions without penalty, compared to age 59 1/2
    for IRAs.




    and one Government Thrift Savings Account.) I understand that oneadvantage of rolling the funds over to an IRA is that there may be taxadvantages to heirs after my death and that of my wife. However,although I can't predict the future, it does not seem likely that therewill be major tax consequences of that nature. I also have the optionof taking the 10-year withdrawal option, which could provide some taxadvantages.



    Then sit down with a lump sum distribution form 4972 and figure
    out the tax consequences of a 10-year lump sum withdrawal. This
    assumes you were born before 1/2/1936.

    --

    __
    Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

    Comment


    • #3
      401K withdrawals, IRA rollover

      In article <[email protected]>,
      Jim Cate <[email protected]> wrote:
      Has anyone reviewed the advantages and disadvantages of keeping a 401kafter retirement and withdrawing the required minimum distributionamounts vs. rolling the funds over to an IRA under circumstances inwhich one is generally pleased with the performance, expense ratio, andinvestment options of the 401K? (More specifically, we have one 401K


      Well, a 401k is harder to seize to satisfy certain legal claims.

      And while this does not apply to you, from what you write, those
      who leave emploment in a year that they are at least age 55, can
      take 401k distributions without penalty, compared to age 59 1/2
      for IRAs.




      and one Government Thrift Savings Account.) I understand that oneadvantage of rolling the funds over to an IRA is that there may be taxadvantages to heirs after my death and that of my wife. However,although I can't predict the future, it does not seem likely that therewill be major tax consequences of that nature. I also have the optionof taking the 10-year withdrawal option, which could provide some taxadvantages.



      Then sit down with a lump sum distribution form 4972 and figure
      out the tax consequences of a 10-year lump sum withdrawal. This
      assumes you were born before 1/2/1936.

      --

      __
      Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

      Comment

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