401K After Retirement

[raceanoncr]

So many people have 401k money they don't touch. I plan on taking income out of mine as soon as I retire. That's why I saved it.

If you need it, that's fine.
Most people try to delay the withdrawal of their 401 k so it can continue to increase in value tax free.

That's Ok, but, correct me if I'm wrong, aren't you still penalized on withdrawals for ANY reason before 70 1/2? I really don't pay much attention to THAT part because I don't have to.

So, is it worth it? That is, to take money out, while it's still accruing value (if that is the case) AND take a hit with a penalty?

Inform me.

 

[brownmonster]

59 1/2 is penalty free. 70 1/2 is when you have to start withdrawing by law. In some cases if you seperate or retire from a company you can start collecting at 55 as long as you take out equal monthly withdrawls.

 

[UpstateNYUPSer(Ret)]

59 1/2 is penalty free. 70 1/2 is when you have to start withdrawing by law. In some cases if you seperate or retire from a company you can start collecting at 55 as long as you take out equal monthly withdrawls.

Rule of 72.

 

[raceanoncr]

59 1/2 is penalty free. 70 1/2 is when you have to start withdrawing by law. In some cases if you seperate or retire from a company you can start collecting at 55 as long as you take out equal monthly withdrawls.

Ok, thanks. Like I said, I ain't paid no attention to that since I knew what I was gonna/didn't have to/and not gonna do.

 

[oldupsman]

So many people have 401k money they don't touch. I plan on taking income out of mine as soon as I retire. That's why I saved it.

I'm with you monster. I withdrew some money the day after I turned 59 and a half. Finally built my man cave downstairs. Had my chimneys rebuilt. Paid off my home equity loan. Putting in a new septic system. All things that increased my home value. I've got a simple theory about money. I came into this world broke and I'm going out the same way.

 

[UpstateNYUPSer(Ret)]

I'm with you monster. I withdrew some money the day after I turned 59 and a half. Finally built my man cave downstairs. Had my chimneys rebuilt. Paid off my home equity loan. Putting in a new septic system. All things that increased my home value. I've got a simple theory about money. I came into this world broke and I'm going out the same way.

Did Prudential withhold Federal income tax from your withdrawal?

 

[oldupsman]

Did Prudential withhold Federal income tax from your withdrawal?

It was my choice. You can take the withdraw in it's entirety or designate how much income tax you want held.
I chose to have them hold 15%. So when I withdrew 10,000.00, I got a check for 8500.00. I found the 15%
sufficient to cover my taxes when I did my tax return the following year.

 

[brownmonster]

It was my choice. You can take the withdraw in it's entirety or designate how much income tax you want held.
I chose to have them hold 15%. So when I withdrew 10,000.00, I got a check for 8500.00. I found the 15%
sufficient to cover my taxes when I did my tax return the following year.

Did you have to move the money into an IRA first or can you withdraw right from the 401K?

 

[oldupsman]

Did you have to move the money into an IRA first or can you withdraw right from the 401K?

I did move the money into an IRA when I retired. Whether I needed to or not to withdraw I couldn't tell you.

 

[UpstateNYUPSer(Ret)]

Did you have to move the money into an IRA first or can you withdraw right from the 401K?

I did move the money into an IRA when I retired. Whether I needed to or not to withdraw I couldn't tell you.

There is no need to move the money to another retirement investment---you can withdraw it directly from the 401k (provided you are age eligible) with no penalty.

 

[UPSBOT]

Originally Posted by raceanoncr

My financial guy wanted to roll over my Prudential. He GUARANTEED he could do better. I showed him the latest statement, with expense ratio cost of, on average, about 0.003. Annual fee of about $25. He said he was wrong. He couldn't touch this.

After two yrs of retirement, I'm still in Prudential with no plans to touch until I have to, at age 70 1/2.

So did you leave it exactly as it was while you were with UPS or did you roll it over to a Prudential IRA?
Prudential calls me once a week to move my money into a IRA with them.
​

 

[Catatonic]

Originally Posted by raceanoncr

My financial guy wanted to roll over my Prudential. He GUARANTEED he could do better. I showed him the latest statement, with expense ratio cost of, on average, about 0.003. Annual fee of about $25. He said he was wrong. He couldn't touch this.

After two yrs of retirement, I'm still in Prudential with no plans to touch until I have to, at age 70 1/2.

So did you leave it exactly as it was while you were with UPS or did you roll it over to a Prudential IRA?
Prudential calls me once a week to move my money into a IRA with them.
​

The same reason every company cals you ... they want your money.

 

[Jdeuel]

My financial guy wanted to roll over my Prudential. He GUARANTEED he could do better. (snip)

I'm new here (and I realize this is an old thread), but I've been in the business 18 years, and the 'G' word capitalized above is something that we just don't use. FWIW, be wary of an advisor who says that word a lot.

 

[anonymous6]

you don't have to leave Prudential. years ago I started a SMA , Self Managed Account within my 401k and transferred funds to it to buy Blue Chip stocks and put about half into Index mutuals with the vanguard family of funds. every year since my returns from the SMA has done better than the regular 401k.

 

[The Milkman]

So many people have 401k money they don't touch. I plan on taking income out of mine as soon as I retire. That's why I saved it.

Brownmonster, I did the same thing. What are you waiting for. Start taking it when you are hobbling around? I hung it up at 55 and I rolled over my 401k into a Schwab acct. I was able to take an equal amount every month without penalty before 59 1/2, I busted my tail as you did and now is the time to enjoy what you saved all those years..Go for it

 

[UpstateNYUPSer(Ret)]

Brownmonster, I did the same thing. What are you waiting for. Start taking it when you are hobbling around? I hung it up at 55 and I rolled over my 401k into a Schwab acct. I was able to take an equal amount every month without penalty before 59 1/2, I busted my tail as you did and now is the time to enjoy what you saved all those years..Go for it

That's called the Rule of 72.

BM, just because you have money in your 401k doesn't mean you have to take it out? I plan on living off of my pension and holding off on SS and my 401k until I have to start receiving payments/withdrawing funds. Let the 401k sit and continue to grow.

 

[beentheredonethat]

I get wanting to enjoy yourself but I want to be self sufficient. I'm fortunate that my family history have longevity. My mom is. 91 and going strong and independent. My dad did pass away at 81 due to diabetes and he died the earliest of his siblings. I am healthy and working on getting healthier. I want to help my grand kids with college too.

 

[UpstateNYUPSer(Ret)]

I want to help my grand kids with college too.

Look in to a 529.

 

[beentheredonethat]

Look in to a 529.

No, for one main reason. If I put money into a 529 that in essence becomes the grandkids money in the eyes of the govt and the colleges. Any dollar that is in their name goes almost completely for their college before grants\aid are given. If I hold the money in my own name and then I give them a "gift" during their college years it will help them more then the comparatively modest tax savings. (PS, I don't have any grandkids yet, but I'm hoping I will someday). Also, if for some reason I do need the money then I still have it in my name. Hopefully, I'll never need to do that. I plan on working til Full SS kicks in. (assuming it's still there in 20 years). In that way, between SS and pension I'll have similar income as I do now, and the 401K which is doing quite well right now will be for extras and to help me in my final years as well as to help the grandkids.

 

[brownmonster]

Brownmonster, I did the same thing. What are you waiting for. Start taking it when you are hobbling around? I hung it up at 55 and I rolled over my 401k into a Schwab acct. I was able to take an equal amount every month without penalty before 59 1/2, I busted my tail as you did and now is the time to enjoy what you saved all those years..Go for it

Since I have 6 years to go until retirement, it probably wouldn't be wise to start taking it now. I do plan on starting withdrawals when I retire. 3K a month isn't much for 2 people.