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Old 07-15-2015, 10:14 AM   #41
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Originally Posted by Winemaker View Post
No. It is not stated as such.

"A beneficiary (other than a surviving spouse) must take the money in a single payment within five 5 years after your death. "

I am awaiting further clarifications; IRS rules allow a distribution to a stretch ira, plan wording is quoted above however vague. Many estate planning books/research suggest that I rollover to ensure the stretch ira, my attorney wants to see my written plan to make a final determination.
Technically, a full lump sum rollover to an inherited IRA satisfies that requirement.

Try to see if you can find a document 402(f) Notice of Special Tax Rules on Distributions for your plan.
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Old 07-22-2015, 11:35 AM   #42
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Join Date: May 2015
Location: Atlanta suburbs
Posts: 633
Talked to my 401 k (Fidelity) administrator today.

First question :
I want to withdraw about $20K in 2016,. What is the process?

For withdrawals after termination or retirement, you can:
a) get a lump sum payable in cash
b) direct rollover to IRA
c) partial rollover to IRA and rest in cash

I do see this is stated in the fine print on page 52 of one of my many 401 k documents; well there was one more option but it's not meaningful to me.

I didn't ask any more questions because this answer is a problem for me.

This appears to be a major issue with my 401 k plan. I had thought to withdraw 2-3% from the 401 k as needed for several years/decades. Apparently this is not possible. Correction: unless I wait till 70 1/2 and go with the MRD/RMD distributions.

This pretty much forces me to rollover the 401 k when I start needing the money.

The rep told me this policy is common for many or most 401 k plans.

I wonder what else I don't know.
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Old 07-22-2015, 08:15 PM   #43
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DW's plan only allows withdrawals 90 days apart. Not something I was expecting. I guess this is something everyone needs to look at.
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Old 07-23-2015, 06:40 AM   #44
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Originally Posted by Animorph View Post
DW's plan only allows withdrawals 90 days apart. Not something I was expecting. I guess this is something everyone needs to look at.
I would be very happy with a withdrawal permitted every 90 days; actually once a year withdrawal from the 401 k would be fine.

I took a much closer look at costs yesterday, 401 k, Vanguard and Fidelity. For my current portfolio, 401 k investment expenses are 0.09%, and the equivalent Fidelity investment expenses are 0.22%. It's not a huge percentage difference, until I multiply it by the portfolio value and then multiply by 40 years.

The Vanguard investment expenses are comparable to the 401 k expenses.

The 401 k has management costs of $34 per year. Fidelity IRA has no annual fee. Vanguard IRA has no annual fee (assuming large investments in any fund).
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