Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Did Safeway screw me?
Old 06-05-2011, 12:11 PM   #1
Confused about dryer sheets
 
Join Date: Jun 2011
Posts: 3
Did Safeway screw me?

so i quit safeway a year ago,
they sent me a letter saying i had some retirement funds to receive, and to reply within 30 days instructing them how to pay it out, or they would just send me a check which would be 30% less then the actaul sum due to taxes n stuff.

i opened a roth ira, sent them the all the info on the form they provided, with 20 days to spare.

they still payed out the lump sum minus 30%

Is there anyway i can have them undo this?

and more importantly-

how did those evil bastards make money off paying me that lump sum?
safewayscam is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-05-2011, 12:24 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 14,328
Sounds like you simply did a Roth conversion which is taxable. I don't think Safeway made any money on it - the withholding goes to Uncle Sam.
travelover is offline   Reply With Quote
Old 06-05-2011, 12:33 PM   #3
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,203
If I have this right, you had money in a retirement account that had never been taxed. They transferred it into a Roth, but took tax out.

I am no expert on this, but that sounds about right. Roth funds are after tax, then grow tax free. Had you opened a regular IRA, then the money should be transferred tax free. That's how I see it, but it could be wrong.
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Old 06-05-2011, 12:41 PM   #4
Confused about dryer sheets
 
Join Date: Jun 2011
Posts: 3
i wanted them to transfer it to a Roth, but they didn't.
they sent me a check.
the amount they sent me was 20% less than the original amount.

why would they ignore the transfer request, they must have something to gain by sending me the check.
safewayscam is offline   Reply With Quote
Old 06-05-2011, 12:43 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by safewayscam View Post
why would they ignore the transfer request, they must have something to gain by sending me the check.
Just slowly pass backward through the paranoia installer that you walked through earlier, and you should be fine.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-05-2011, 12:46 PM   #6
Confused about dryer sheets
 
Join Date: Feb 2010
Posts: 2
If the money went to you, you have 60 days to transfer it to a traditional or Rollover IRA.

!If the money went to your Roth IRA, you should be able to recharacterize it back to a traditional or rollover IRA.(nevermind)

Call your vendor and tell them what you want to do.

The kicker is this was pre-tax money so they withheld taxes for you.
If you want to avoid paying the taxes this year (and 10% penality if you got the distribution sent to you and don't move all of it to a Tradtional IRA), you will need to pony up the additional 30% deposit.

You will get it back at tax time if you do it right.

It should have been a tax free transfer of pre-tax funds to a pre-tax account. You muddied the water by sending it to a post-tax account.
cluebus2 is offline   Reply With Quote
Old 06-05-2011, 12:58 PM   #7
Confused about dryer sheets
 
Join Date: Jun 2011
Posts: 3
understood. thanks for the info.
safewayscam is offline   Reply With Quote
Old 06-05-2011, 02:03 PM   #8
Full time employment: Posting here.
lemming's Avatar
 
Join Date: May 2008
Posts: 597
If you have the cash , you can roll the withheld amount into your roth by depositing a check plus the payout from your employers. You will get a 1099 with the taxes paid from them and so you will have a tax prepaid. Don't forget the amount you will owe on that income for state taxes.
Please realize that your payout to Roth will add to your salary for the year which will make it a much higher number for income then you feel like you made for the year.

Now if you want to start a gripe fest about Safeway from a consumers standpoint-I'm there with you
lemming is offline   Reply With Quote
Old 06-05-2011, 02:46 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
Quote:
Originally Posted by safewayscam View Post
understood. thanks for the info.
Are you going to change your user name now?

Talk about shooting and asking questions later!

-ERD50
ERD50 is offline   Reply With Quote
Old 06-05-2011, 04:46 PM   #10
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,657
Unless it was a Roth 401k, Safeway could not have moved the money directly into a Roth IRA. You cannot do a transfer and a conversion at the same time. You need to first put in into a traditional IRA, then if you elect later you can roll it into your Roth. Since you have ended up taking a direct distribution, they withheld money (which was sent to the IRS) and you have a limited time to get that money into an IRA or you will be taxed on the whole amount.

It sounds like the info about a Roth IRA account is not what they needed, so they just ignored it. Not much they could do perhaps except try to contact you again. They are not allowed to transfer to the wrong kind of account.

You are in a pickle now. You don't mention account size, but suppose it was 10K. You have a check in hand for 8K now. You have a limited time to get 10K into an IRA, so if you don't put the 8K check plus another 2K from somewhere else in soon the whole thing will be a distribution and the IRS will charge you tax. If you only put the 8K, then the IRS will treat the 2K they were sent as income to you and you will owe tax on it. Substitute whatever numbers are relevant. I had this at 30% which was your original amount, then changed to 20% which was your later post. I don't know why your numbers change, but hopefully the concept is clear here.

You have very limited options and very limited time here. Once the time expires you will have zero choices and will owe tax on everything. There is no grace period on these rules and no way to do them over. If you want to provide details, people here may be willing to make suggestions, but if any of this is unclear (and it sounds like some of it must be or you wouldn't have made the mistakes you already made to get here) you need someone to help you do this right, and quickly.
growing_older is offline   Reply With Quote
Old 06-05-2011, 06:16 PM   #11
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
And if you chose to post again, please do so under a less offensive logon.
East Texas is offline   Reply With Quote
Old 06-05-2011, 07:19 PM   #12
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by East Texas View Post
And if you chose to post again, please do so under a less offensive logon.
What, less offensive than "East Texas"?
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Old 06-05-2011, 07:23 PM   #13
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Quote:
Originally Posted by Nords View Post
What, less offensive than "East Texas"?
As Larry is fond of saying, "I don't care who ya are, that's funny right there..."
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 06-05-2011, 08:09 PM   #14
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by REWahoo View Post
As Larry is fond of saying, "I don't care who ya are, that's funny right there..."
So hard to figure out which of us posters he was referring to...
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Old 06-07-2011, 10:16 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
Quote:
Originally Posted by Nords View Post
What, less offensive than "East Texas"?
Quote:
Originally Posted by REWahoo View Post
As Larry is fond of saying, "I don't care who ya are, that's funny right there..."
"I had the right to remain silent, but did not have the ability."

Ron White
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 06-07-2011, 11:38 AM   #16
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by Nords View Post
What, less offensive than "East Texas"?
West Texas, or more specifically "Texas Panhandle" ...
rescueme is offline   Reply With Quote
Old 06-07-2011, 11:44 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
Changed the thread title by removing the "How" from the title and posing it as a question rather than an accusation, since I think the mechanics of the transaction have been explained and justified.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 06-08-2011, 03:58 PM   #18
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
Quote:
Originally Posted by rescueme View Post
West Texas, or more specifically "Texas Panhandle" ...
Spent my formative years in the Panhandle. The first time I took my spouse there we were just south of Dumas when I said there was one thing I failed to mention. At that exact moment there was a loud "WHAT IS THAT SMELL?" I said that's the one thing I failed to mention.

I wonder what's worse: a feedlot smell or a chicken house smell?
East Texas is offline   Reply With Quote
Old 06-08-2011, 04:01 PM   #19
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Quote:
Originally Posted by East Texas View Post

I wonder what's worse: a feedlot smell or a chicken house smell?
If you spent 5 seconds downwind from a pig farm, you'd have your answer.
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 06-08-2011, 09:55 PM   #20
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by REWahoo View Post
If you spent 5 seconds downwind from a pig farm, you'd have your answer.
One of the reasons we got our "dream home" so cheaply is because it's downwind of a pig farm and next to a sewage pumping station.

Joke's on them. The pig farm shut down a couple years before we bought the place, and the sewage pumping station has been undetectable since we moved in.

Meanwhile our neighbors on our other side have been most conspicuous in their detectability, particularly noise pollution...
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
A screw holder, is there such a thing? easysurfer Other topics 7 03-28-2011 10:54 AM
How long *is* this screw? ERD50 Other topics 12 08-04-2010 07:22 AM
Screw-up at Vanguard soupcxan FIRE and Money 32 01-14-2007 11:14 PM
Credit card screw up farmerEd Other topics 14 06-18-2005 02:25 PM

» Quick Links

 
All times are GMT -6. The time now is 01:08 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.