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Old 03-05-2018, 02:22 PM   #21
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IRA.
Never have money in a 401k if you donít have to.
401(k) Woes When a Company Goes Bankrupt ‚ÄĒ Fair Game - The New York Times
Something smells rotten here. I worked with 401(k) plans for over 25 years and I never saw payouts held up like this due to a plan termination. I see that the article is from 2012. From what I remember, some plans did not even wait for the IRS determination letter to pay the plan participants because what is the risk? Their account is their account. Well hopefully these people got their money. It sounds more like a case of the company mismanaging the plan, not really the fault of the type of plan design.
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Old 03-05-2018, 03:15 PM   #22
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pretty sure that rule of 55 doesn't apply once the money is rolled into the ira - you are limited to 59.5
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Old 03-05-2018, 05:08 PM   #23
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pretty sure that rule of 55 doesn't apply once the money is rolled into the ira - you are limited to 59.5
Yes, that's correct. Originally, I was leaning towards rolling my IRA into my employer's 401K plan because of the added flexibility I'd have with the rule of 55. However, I'll be 56.5 when I resign and have taxable accounts and savings that will safely bridge me to 59.5. While the rule of 55 would provide me with more options, it's very unlikely I'd ever be in a position that I'd need to exercise the option.

Just as an aside; I spoke to a Schwab rep about the logistics of rolling my IRA into my employer's 401K. During the course of our conversation he told me that I wouldn't be able to sell cash covered puts in my self-directed 401K plan. I told him that my Etrade IRA was allowing me to sell cash covered puts and he just went on to repeat that I wouldn't be able to do it my 401K. I would be able to sell covered calls but not cash covered puts.
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Old 03-05-2018, 05:49 PM   #24
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My 401K has a .15 record keeping fee. But I have not rolled the money over yet because all of it is in stable value fund paying 2.7%, so even after the record keeping it's still a decent rate.

If I did not have the stable value option, I would have rolled it over to an IRA. There are no admin fees in an IRA and you can choose from any fund you prefer rather than the preselected funds in the 401K plan.
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Old 03-13-2018, 03:15 PM   #25
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You can take SEPPs from an IRA starting at 55 if you wanted too.
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Old 03-13-2018, 03:28 PM   #26
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You can take SEPPs from an IRA starting at 55 if you wanted too.
with much less flexibility than a distribution after age 55 can be from a 401k plan
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Old 03-13-2018, 03:29 PM   #27
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You can take SEPPs from an IRA starting at 55 if you wanted too.
or starting at any age -- if I am not mistaken.
(FWIW: SEPP = 'Section 72(t)' withdrawal plan).

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Old 03-13-2018, 09:55 PM   #28
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or starting at any age -- if I am not mistaken.
(FWIW: SEPP = 'Section 72(t)' withdrawal plan).

-gauss
That’s correct. Only that it has to continue to the longer of 59.5 or 5 years. This is yet another way to manage the eventual RMD @ 70.5. I did SEPP at age 54. Everyone ‘s situation is different but if your situation is like mine, where the tax deferred savings are a significant proportion of net worth, SEPP is a valuable option. I’m not ER’ed but the SEPP paved the road to ER, planning for that before the clock strikes year 2020.
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Old 03-13-2018, 10:10 PM   #29
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Thatís correct. Only that it has to continue to the longer of 59.5 or 5 years. This is yet another way to manage the eventual RMD @ 70.5. I did SEPP at age 54. Everyone Ďs situation is different but if your situation is like mine, where the tax deferred savings are a significant proportion of net worth, SEPP is a valuable option. Iím not ERíed but the SEPP paved the road to ER, planning for that before the clock strikes year 2020.
Thanks free2020,
Indeed at one point I considered SEPP/72(t) plans to get me to 59 1/2 (I ER'd in my mid-late 40's).

I decided instead to use Roth withdrawals as/if needed. I rolled over a large amount of after-tax 401k contributions (many plans do not have this option) to our Roth 401ks that should make any non-qualified Roth distributions before age 59 1/2 penalty free (ie they will be from contributions and conversions - not earnings which comes out last - see pt 3 IRS form 8606 for details).

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Old 03-13-2018, 11:59 PM   #30
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Thanks free2020,
Indeed at one point I considered SEPP/72(t) plans to get me to 59 1/2 (I ER'd in my mid-late 40's).

I decided instead to use Roth withdrawals as/if needed. I rolled over a large amount of after-tax 401k contributions (many plans do not have this option) to our Roth 401ks that should make any non-qualified Roth distributions before age 59 1/2 penalty free (ie they will be from contributions and conversions - not earnings which comes out last - see pt 3 IRS form 8606 for details).

-gauss
You did great with your Roth 401K. Unfortunately 401K Roth was not offered at my long tenure employer. I wised up to Roth a bit late and that is a regret. But, as I posted earlier in this thread, opportunistically converted tIRA to Roth right after the GFC and I have not touched a penny to date, thanks to the SEPP from a large tIRA. The market has also been generous to my Roth. As I look out ahead, my general plan is to deplete the tIRA substantially by 70-1/2, dip into the ROTH minimally until the out years.

Tax deferred is good but tax free compounding is magical. From the discussion on this and other threads, not sure if that is fully appreciated by everyone. Like you, I feel like shouting ROTH out from the rooftop. I especially tell this to all 20 something ‘s I come across. Imagine having $55 K in Roth by age 30!
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Old 03-14-2018, 12:05 AM   #31
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Actually I never really had a Roth 401k at my employer (well maybe a tiny one to start the 5 year clock running).

I had a traditional 401k that allowed for after-tax contributions. DW did too. That was the key enabler to all this. It was this after-tax enabled 401k account combined with Roth IRAs (and traditional IRAs) that allows the magic to happen (aka the complexity and inefficiencies in the tax code that we benefited from).

-gauss
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