Turboslacker
Recycles dryer sheets
- Joined
- Jan 3, 2014
- Messages
- 277
It's time to stop working and start living!
I think it IS the transition that was stumping me; how do I go from saving for 30 years to actually taking money out of the sacred savings accounts? More mental than financial, me thinks.
Also, I believe that your after-tax 401k can be rolled into a Roth IRA where it will grow tax free. I was unaware of this opportunity when I rolled over my 401k but luckily my after-tax balance was immaterial.
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I'm divorced and my ex had significantly less earnings so I'm sure my SSI is the better one. There is no real need in my withdrawal plan to take SSI earlier, and honestly it all came back to my FEAR OF DEPLETING MY SAVINGS ACCOUNTS. That's hard to do! I modeled to live to 90 and still had minimal assets left at a 3% ROI, but jeeze that mental block is hard to overcome.
My grandmother is 94, and her mother died at 102. My grandmother still saves cottage cheese containers and writes dates on her eggs so that she uses them in order. I think they ruined me.
As I understand, yes you can. In my plan, they will do two disbursements any time I withdraw money from the plan. The after-tax is proportional. That means to get my after-tax amount all out I would need to pull all of the money out and place it all in two IRAs, one taxable and one Roth. There are no tax consequences. The after-tax component is only what was put in, not the earnings. The sooner that cash is put in a Roth, the sooner the earnings also become tax free. In my case, the amount of after-tax cash is so small, it isn't worth the hassle.Is this correct? Even for a normal 401k? What are the tax consequences?
As I understand, yes you can. In my plan, they will do two disbursements any time I withdraw money from the plan. The after-tax is proportional. That means to get my after-tax amount all out I would need to pull all of the money out and place it all in two IRAs, one taxable and one Roth. There are no tax consequences. The after-tax component is only what was put in, not the earnings. The sooner that cash is put in a Roth, the sooner the earnings also become tax free. In my case, the amount of after-tax cash is so small, it isn't worth the hassle.
Is this correct? Even for a normal 401k? What are the tax consequences?