I don't really talk like that, but for some reason people think I do because I live in Dallas
. Hi, everyone. I am a 41 year old paramedic and I recently separated from my employer of 17 years. I received this notice in the mail about an early pension plan payout and I have a few questions that you may be able to answer, if you don't mind?
Background: 35k in employer funded pension, separated from employer and unemployed for 4 months. Gainfully employed now but only part time, also a student in nursing school. Trying to get my life back together and pay bills that have accrued since job loss. Already liquidated small 403b contributions to pay for necessities.
I have the option to roll my money over into another 401 account, take a payout of the amount, or leave it in it's current account and take it when I retire at normal retirement age.
My questions are these: If I roll over my 34K into an IRA account, what will I be taxed if I have to access it to pay for things?
If I take the full amount of the payout, could that count as a hardship disbursement if I was unemployed for part of the year?
I know the disbursements for me are taxed at 25% federal, no state, and 10% early withdrawal, but since I was unemployed for that long (resulting in approximately $15K net salary loss), could I claim hardship? What exactly is a hardship disbursement?
Also, any idea of what kind of a tax hit I would take? I have incurred no tax debt the last several years: family of four, two children, wife doesn't work due to medical issues.
I know the disbursement would be counted as income, the disbursement ...according to my 35% tax calculations, would be about $22K. Does it make any sense to take a full payout? What if I rolled it into an IRA and accessed only part of the money, would that make any more sense?
I'm so confused, and I appreciate any help you all could provide. Thank you in advance.