PhrugalPhan
Recycles dryer sheets
First let me start by saying this is *not* a question about when to withdraw from Roth vs. Non-Roth accounts. Instead it is about withdrawals from accounts that contain both pre- and post tax monies. Let me explain.
At my work we have a good (in my mind) 457 plan, and it also allows for pre- and post tax contributions. The post tax is relatively new, and I currently have about 12% in as post tax. Based on the balance and rate I am putting in money now, I suspect my ending balance could be as high as 25% post tax contributions. I also have a Roth IRA, plus will be getting a pension when I retire. I would like to have complete control over what is withdrawn and when to maximize benefits tax wise.
Given that, today I contacted my 457 plan administrator and asked this question: "When I start to withdraw funds, will I be able to specify what percentage of a withdrawal comes out of the post tax and pre tax pools of money?" I was told to my disappointment that I could not , that the money withdrawn will come out in percentages equal to the balances of each pool of money.
I don't know if this will really be an issue for me, but I have to think this issue has come up for others. So I have the following questions, maybe someone here knows:
At my work we have a good (in my mind) 457 plan, and it also allows for pre- and post tax contributions. The post tax is relatively new, and I currently have about 12% in as post tax. Based on the balance and rate I am putting in money now, I suspect my ending balance could be as high as 25% post tax contributions. I also have a Roth IRA, plus will be getting a pension when I retire. I would like to have complete control over what is withdrawn and when to maximize benefits tax wise.
Given that, today I contacted my 457 plan administrator and asked this question: "When I start to withdraw funds, will I be able to specify what percentage of a withdrawal comes out of the post tax and pre tax pools of money?" I was told to my disappointment that I could not , that the money withdrawn will come out in percentages equal to the balances of each pool of money.
I don't know if this will really be an issue for me, but I have to think this issue has come up for others. So I have the following questions, maybe someone here knows:
- Is this a requirement from the IRS, or is it something that can be specified by the plan trustee? If it can be changed, perhaps I can talk to the powers that be and see if this change can be incorporated in the future.
- Is it possible to keep the money that is pre tax from any withdrawals and in some manner roll over the post tax money to another account to preserve the tax free status going forward?
- Is there any other withdrawal strategy you can think of I should consider?