Others might have better suggestions depending on whether you are planning to be employed elsewhere, pursuing self employment, retiring, or if your health concern meets eligibility for disability benefits or early withdrawal of pension or tax-advantaged accounts, or is expected to affect life expectancy. Marital status and dependents can affect pension withdrawal options available, as do particular detail of the pension plan itself. Anticipated working and retirement tax rates and a working spouse might favor a particular choice.
A few general comments from spouse and my life experiences -
401k options
1.) continue current employer administration
2.) rollover into new qualified plan at next employer or your own plan if you become self employed
3.) rollover into your traditional IRA (or if after – tax contributions, into Roth)
If you continue with current employer, risks include administration fees decreasing return, 401k plan investment options possibly more limited than IRAs, employer insolvency or sale effects; benefits might be lower institutional investor Operating Expense Ratios on investment fund offerings.
Rollover into another qualified plan rather than an IRA might offer greater creditor / lawsuit protection depending upon state.
Rollover to IRA might have greater selection of investments and eliminate fees.
Options if you are eligible to take pension distributions:
1.) Annuitized yearly distributions, possible extending to survivors if electing lower payout – could result in greater total payout if long life expectancy.
2.) Lump sum distribution rolled over into traditional IRA – could result in greater payout if shorter life expectancy, and inheritance to beneficiaries. Also gives you control of timing and amount of distributions beyond Required Minimum Distributions if you want to vary them year by year.
Hope that helps.
A few general comments from spouse and my life experiences -
401k options
1.) continue current employer administration
2.) rollover into new qualified plan at next employer or your own plan if you become self employed
3.) rollover into your traditional IRA (or if after – tax contributions, into Roth)
If you continue with current employer, risks include administration fees decreasing return, 401k plan investment options possibly more limited than IRAs, employer insolvency or sale effects; benefits might be lower institutional investor Operating Expense Ratios on investment fund offerings.
Rollover into another qualified plan rather than an IRA might offer greater creditor / lawsuit protection depending upon state.
Rollover to IRA might have greater selection of investments and eliminate fees.
Options if you are eligible to take pension distributions:
1.) Annuitized yearly distributions, possible extending to survivors if electing lower payout – could result in greater total payout if long life expectancy.
2.) Lump sum distribution rolled over into traditional IRA – could result in greater payout if shorter life expectancy, and inheritance to beneficiaries. Also gives you control of timing and amount of distributions beyond Required Minimum Distributions if you want to vary them year by year.
Hope that helps.
Statistics: Posted by ThriftyInvestor — Wed Nov 20, 2024 3:11 am — Replies 1 — Views 282