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Withdrawing from 457
Old 05-15-2018, 06:57 AM   #1
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Withdrawing from 457

Is there any advantage to withdrawing money from a 457 (pre-tax) in monthly allotments vs. all at once.
Im about to retire after 31 years of fire/medic service and am looking to my 457 to maintain my lifestyle/provide money for property investments. So for example if I intend to pull, lets say $100,000 from my 457 in 2019, would it be better to pull $100,000 in a check in January or to receive it throughout the year in monthly installments of $8300?

I have a substantial amount of money in my 457 and want to pull it over time to invest in property to provide income throughout retirement and want to do it obviously in the least expensive way tax-wise.
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Old 05-15-2018, 08:00 AM   #2
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I'm pretty sure that the answer is plan dependent. DW and I both had 457 plans but our vendor charged for each withdrawal AND had a monthly maintenance fee. The first thing I did on retirement was to roll the funds over to low cost IRAs (Vanguard and Fidelity).

The IRAs give us much better flexibility in investments as well as (slightly) lower costs. Every penny counts
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Old 05-15-2018, 11:51 AM   #3
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Your plan's management will withhold taxes. It could be a larger percentage be withheld on a lump sum than a monthly withdrawal. My plan did not allow for a tax with holding exemption.
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Old 05-15-2018, 04:50 PM   #4
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Quote:
Originally Posted by rocks911 View Post
So for example if I intend to pull, lets say $100,000 from my 457 in 2019, would it be better to pull $100,000 in a check in January or to receive it throughout the year in monthly installments of $8300?
It probably won't make much difference tax-wise, although monthly installments may result in slightly less taxes if paid quarterly or as the withdrawals occur. But you're still going to have to pay income taxes for the year on that $100k. A lot depends on the costs associated with your 457 plan as fosterscik correctly notes. Like him, I rolled my 457 over to a Vanguard IRA for lower costs and increased flexibility.

But the first thing for you to do is talk with the 457 plan administrator to find out what your options and costs are with your specific plan.
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Old 05-16-2018, 04:54 AM   #5
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Thanks for the replies.

I talked with my plan administrator, or actually she forwarded my e-mail questions to the institution and they responded. They said there were no fees for removing money either in monthly installments or in a single check, and they do withhold federal taxes.

The funny thing is I asked for a schedule of fees, withdrawal and management fees. They talked about the withdrawal fees but never mentioned management fees. These people sheeeesh!

Their general fund does pay 4% a year with zero risk, so I guess I'll stay with them.
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