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Old 06-13-2015, 04:12 PM   #21
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Are the pretax assets in an IRA or a 401(k)? If in a 401(k), is it with a current or former employer? Because there is nuance in the withdrawal rules. First off, you can take substantially equal distributions over your lifetime anytime. An example is having a paper route as a kid and putting all the money into Apple stock in an IRA. Time passes, you are now 40 and a billionaire. You can withdraw this money without penalty if you take it over your lifetime using IRS tables. The other, more likely exception is if you have money in a company 401(k) and separate from service in or after the year you turn 55. You can take the money out without penalty. If you roll it over into an IRA, however, the age of withdrawal magically changes to age 59 1/2. Before doing these things, though, it always makes sense to talk to a CPA or enrolled agent who regularly works with retirement distributions.
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Old 06-13-2015, 04:23 PM   #22
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I have a somewhat complicated situation with my retirement savings. I have a pretty good chunk of money but its nearly all in pre-tax situations. I'm 55 and would like to retire. On paper I have plenty it seems but to access the money means complected options and probably penalties. If I keep on working the amount is likely to continue to grow to a point I think I'll have RMD problems down the road if I'm not there already. I'm no tax expert for sure, though I do my own taxes since they're pretty simple. However I am now beginning to think I need to hire someone that can better evaluate the situation and advise. I have a FA but he's not a tax expert buy his own admission. I just wonder how many people here spend the money to hire a professional tax adviser of some sort?
Look at a 72T option. I did it and would do it again in a heart beat. I ran the numbers, had FIDO run the numbers and a CPA run the numbers and not much difference between the three. That was seven years ago and glad I did it. You can spend money getting advice but the bottom line is, you have to make the decision. Instead of spending money for advisers, I did the homework and math myself, it wasn't that hard, plus it gave me the warm fuzzy feeling of actually understanding all aspects of my financial situation. Just my two cents.
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Old 06-13-2015, 08:28 PM   #23
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If you go to a CPA try to find one who also has is a PFS.. Personal Financial Specialist which is a CPA iwth advanced training in taxation and financial planning. Look for one in your area at CPA/PFS Credential Holder Directory

Also, many but not all, 401k plans allow penalty free withdrawals if you leave service after age 55.

If you can't access you money without penalty before 59 1/2 you might consider a 72t or if you own a home free and clear, take out a mortgage and use the proceeds to get you from 55 to 59 1/2.
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Old 06-13-2015, 08:58 PM   #24
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One thing I'm grateful for is that when I was 20, I married a 25 year old. When I turn 55, my wife will be exactly 59 1/2. I wish I could say I planned that. Personally, I would probably not retire if I couldn't draw down my 401k without penalty. Note that there are ways to draw from the 401k without incurring a penalty. I forget the code at the moment, but basically, you have to take equal withdraws based on your life expectancy. One more thing you'll have to learn or get advice on. Personally, I'd work part time until 59 1/2 had I not married so wisely.
The IRS allows penalty-free 401(k) withdrawals for those separated from service in the year they reach 55 or later, so no need to wait until age 59.5 unless one's plan does not use the IRS rules.

The 72(t) / substantially equal periodic payments applies to IRAs, but not 401(k)s. Howevever, since one can rollover a 401(k) to an IRA that is not really a problem.

So maybe you married wisely, but it wasn't because of the age difference.
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Old 06-13-2015, 09:23 PM   #25
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I had a professional corporation (which is now a holding company) whose retained earnings are tax sheltered until withdrawn. My personal tax sheltered accounts are large enough that I will face heavy tax liabilities due to RMDs approximately 14 years in the future. Hence I am gradually drawing down on them now, in a lower tax bracket, to smooth taxation. I need to hire an accountant for my corporation and my accountant is an expert in this field. Her advice is invaluable in helping me choose an integrated tax efficient withdrawal strategy from both corporate and personal accounts.

I use attorneys for legal matters. When it comes to taxes, I hope to avoid needing legal expertise.
Same situation. I was lucky enough to have a close family friend who is an accountant who spent many years with the tax department before going out on his own. Much experience with professional corps as well so I was very lucky. Also hoping not to need a tax attorney or attorneys of most other specialties for that matter although I do have one to use when updating the wills and such.
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Old 06-14-2015, 09:37 AM   #26
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No tax attorney, no financial advisors, no CPA's etc. Especially now that I'm retired and have the time, I'd much rather learn about these things myself so I can do my own tax and financial planning/investing. I've found most items/issues are actually pretty simple if you take them one at a time. Some items/issues may affect others but that too is pretty easy to figure out. It just takes some time and reading. Of course you may rather have someone else handle this "stuff' for you and that's okay too, but for me, I like to know "how and why".
Likewise but since our tax/financial affairs are very simple I feel comfortable doing this. Tax deferred investments are not material. Also helps that I am a CPA and have a CFA. If I felt the need I would certainly get professional help. Obviously use lawyers for family law/estate issues.
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Old 06-14-2015, 04:31 PM   #27
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68bucks it seems from your description a Series of Substantially Equal Periodic Payments meets your needs. There are 3 standard methods RMD, amortization and annuitization. They are all well defined I expect IRA custodian and reading IRS code are sufficient. Key steps are you separate an account you'll use for the SOSEPP so you have flexibility to add another in the future out of your larger IRA total if needed. Once you start taking payments, either monthly, quarterly, annually you must keep on the same schedule until age 59 1/2 or 5 years whichever is longer.


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Old 06-14-2015, 04:40 PM   #28
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The IRS allows penalty-free 401(k) withdrawals for those separated from service in the year they reach 55 or later, so no need to wait until age 59.5 unless one's plan does not use the IRS rules.....
Be careful on this. As LOL says, many plans do allow penalty-free withdrawals for participants , but some do not... you have to check with your specific 401k plan to be sure.

There was a change in the law back in the Reagan days as I recall that allowed such penalty free withdrawals for employees leaving service after age 55 but not all 401k plans made the necessary changes to allow it.

And it is pretty stupid that they constructed things such that some plans allow it and others do not, but that's the way it is.
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