Accessing the Loot!

[hguyw]

Hi all,

One of the things I've come to love about this forum is that you guys are all such good planners. (And also that it's one of the few places where frugality is considered a virtue instead of a character flaw!)

Today, I've gotten my first inkling that the times they are a-changing at EduCorp. I haven't been happy for awhile, but now at 52, I think I'm being marginalized by the new crowd in charge. I'm not nearly as upset as I would be if I still had CC debt, a car payment and a mortgage. I have none of those things now, so I can at least see the light at the end of the tunnel.

So for planning purposes...

It's still a good three years at a minimum until I can "separate from service" and access my 403b. And I don't know if I will have enough but I'm thinking semi-retirement might be a possibility. So, how, exactly does this access happen?

Do I tell the company (TIAA-CREF) how much I want every month? Even if it was something stupidly outrageous, like say $50,000, would they have to send it to me?

Do they tell me how much they will let me have (like a parent to a child, even though it's my money)? And is there any way to know this amount now - 3 or 4 years out?

Can I take the whole thing, and roll it over into something else, either inside or outside the company? How would this help? What would be the pitfalls?

IOW, what are the nuts and bolts and options of actually starting to get a monthly check from my nest egg? What might my options be?

The company reps are not paid on commission, so they don't try and sell me any particular fund. And I feel I get good advice WRT diversification. However, I do think they have an interest in me paying into the pot for as long as possible, so I'd rather have some independent answers here.

Thanks in advance!

-hguyw

 

[travelover]

I'm sure others will be along shortly to answer your questions, but I'd highly recommend this book to you:

Amazon.com: "IRAs, 401(k)s & Other Retirement Plans": Taking Your Money Out (9781413310313): Twila Slesnick PhD, John Suttle CPA Attorney: Books

 

[LOL!]

As you noted, TIAA-CREF has great counselors that you can call up and they can tell you how to get the loot. It will all depend on what investments you are using at TIAA-CREF. Some investments you can withdraw at age 59.5 without problems. Some investments you have to withdraw over a 9- or 10-year payout period. It seems you think you can get some investments at age 55. Some you can rollover into your own IRA when you stop working for your employer.

If you get all the money into your own IRA, then you control the nuts-and-bolts. You could withdraw from an IRA any which way: $1 a day, $10 a week, $52.37 a month, $100,000 year, whatever.

 

[hguyw]

It seems you think you can get some investments at age 55.

From the SUNY Tax Deferred Retirement Savings Program brochure:

"Withdrawals will be subject to federal income tax. If you are under age 59 1/2, you may be subject to an additional 10% tax. This additional tax does not apply if you separated from service at age 55 or older, if you are receiving a lifetime income, or in cases of death, disability, or significant un-reimbursed medical expenses."

Am I mis-interpreting this in some way?

-hguyw

 

[jdw_fire]

From the SUNY Tax Deferred Retirement Savings Program brochure:

"Withdrawals will be subject to federal income tax. If you are under age 59 1/2, you may be subject to an additional 10% tax. This additional tax does not apply if you separated from service at age 55 or older, if you are receiving a lifetime income, or in cases of death, disability, or significant un-reimbursed medical expenses."

Am I mis-interpreting this in some way?

-hguyw

if it is like a 401k (which i think it is but you need to check) if you separate from your employer at age 55 or older you can start withdrawing (any amount you want) without penalty (you still have to pay income taxes). in other words your bolded statement is true.

however if you roll it into an IRA then you will pay the penalty if you start WDing before 59.5 (unless you do a 72t)

 

[Fireup2020]

Has anyone here actually accessed their pre-tax retirement savings after rolling over to a 72t?

 

[FinanceDude]

Has anyone here actually accessed their pre-tax retirement savings after rolling over to a 72t?

I think Cycling Investor does that, a few others.maybe audrey1?

 

[CyclingInvestor]

Has anyone here actually accessed their pre-tax retirement savings after rolling over to a 72t?

I retired at 48 in 2006, rolled over my 401k into an IRA, and started taking 72t distributions. I use the simplest to calculate method, which means I withdraw about 3% (slowly rising) of my Dec 31 balance out each year.

 

[crazy connie]

Has anyone here actually accessed their pre-tax retirement savings after rolling over to a 72t?

I currently am on year 3 of a 72T distribution. PM me if I can help.

 

[hguyw]

I'm glad this thread was revived...I went looking for it and couldn't find it. (Overlooked it I guess.)

When you do the rollover, do you have to rollover the entire 403b or 401K? Or can you do just enough to cover the withdrawals you want to do with the 72t?

 

[ronin]

The latter. Roll over enough to cover the withdrawals you want.

 

[DeborahB]

I was VERY unhappy with my employer's 403b choices in mutual funds. I have moved almost all of it into a self-directed IRA. I'm 61. I think it is possible to do this after you turn 59 1/2. I haven't accessed the money since I'm not yet retired.

The money I moved was money I had contributed, not matching money.

 

[LOL!]

@thinker25: if you are still employed, what you have done is an in-service rollover. Some plans allow this; many do not. An in-service withdrawal may also be possible after age 59.5, but these are not the same as a 72(t).

 

[crazy connie]

Most employers make you take it all at once for rollover to an IRA (unless you set up periodic dist with them). You then set up multiple IRA's meaning 2 or more in whatever ratio you decide. You want to do a 72T for income? Then simply specify which IRA it is against. The other IRA continues along till you decide you need to take out money as another 72T or a one time lump sum with a penalty or you reach the magical age of 59 and 1/2 after which there is no penalty on withdrawn funds. The 72T plan ends after a minimum of 5 years of distributions AND reaching age 59 and 1/2.

 

[DeborahB]

@thinker25: if you are still employed, what you have done is an in-service rollover. Some plans allow this; many do not. An in-service withdrawal may also be possible after age 59.5, but these are not the same as a 72(t).

Thanks, I didn't know what it was called but I am definitely able to do it. I can access my self-directed IRA, of course (because of age >59.5) - I don't because I am still employed.