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Old 11-11-2017, 07:05 AM   #41
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Apparently what I need to get hold of is the "summary plan description (SPD)". Where do I find it? Who (generally) should I ask for such a thing?
For both of our plans (mine and wife's), we can login to our 401K account online and find this and other related documents.
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Old 11-11-2017, 07:40 AM   #42
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^^^^ That is very typical... especially for 401k accouts that offer online access.
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Old 11-11-2017, 07:48 AM   #43
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The 401(k) "summary plan description (SPD)" for the 2 megacorps I worked for are either on the company intranet or Fido's website.
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Old 11-11-2017, 11:30 AM   #44
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So let me see if I understand this. As far as the tax rules that say what the taxes are, and whether or not you have the 10% penalty, you can withdraw any amount, any time (after separation).

But the 401/403/457 rules are the rules that may (or may not) restrict what/when/how you can withdraw. It's (heavily) plan dependent.

For planning future ER, while I definitely need to know what the IRS says, I REALLY need to know what my plans say.

Do I have it right?
Yep, the SPD of the 401K rules, and is usually more restrictive than what the IRS allows, and can change at anytime !!
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Old 11-11-2017, 11:36 AM   #45
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Mine was on the custodians web site. Interesting when I talked to the benefits person I was mis-informed. They said 59.5 or pay a penalty.

Under hardship withdrawal there was "55 or older and separated from employment" statement. Took a day for them to huddle and get it straight.
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Old 11-11-2017, 01:41 PM   #46
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When I talked to one benefits person he told me that funds would be sold pro rata to cover the amount of withdrawal, another time the person told me that I could specify the funds I wanted to sell. Asked if I could get a copy of the funds request so I could see which rep was right, but alas, that wasn't going to happen.
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Old 11-11-2017, 01:45 PM   #47
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When I talked to one benefits person he told me that funds would be sold pro rata to cover the amount of withdrawal, another time the person told me that I could specify the funds I wanted to sell. Asked if I could get a copy of the funds request so I could see which rep was right, but alas, that wasn't going to happen.
Worst case, once funds are withdrawn go in and rebalance your funds are you want them to be.
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Old 11-11-2017, 03:32 PM   #48
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When I talked to one benefits person he told me that funds would be sold pro rata to cover the amount of withdrawal, another time the person told me that I could specify the funds I wanted to sell. Asked if I could get a copy of the funds request so I could see which rep was right, but alas, that wasn't going to happen.


This is why it is crucial to actually read what's in the SPD. I've had the same thing happen because the custodians benefit person is dealing with many plans and sometime the details vary from one employer to another. They'll give you a pat answer without checking so I sometimes need to have a copy of the SPD handy and direct them to the section that permits funds specific transactions, for example. Happens with other features too. Our custodian is Fido so not a small time outfit.
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Old 11-11-2017, 04:04 PM   #49
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When I talked to one benefits person he told me that funds would be sold pro rata to cover the amount of withdrawal, another time the person told me that I could specify the funds I wanted to sell. Asked if I could get a copy of the funds request so I could see which rep was right, but alas, that wasn't going to happen.
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This is why it is crucial to actually read what's in the SPD. I've had the same thing happen because the custodians benefit person is dealing with many plans and sometime the details vary from one employer to another. They'll give you a pat answer without checking so I sometimes need to have a copy of the SPD handy and direct them to the section that permits funds specific transactions, for example. Happens with other features too. Our custodian is Fido so not a small time outfit.
I think I found what appear to be SPDs for a couple of my plans online. They definitely do not in any way address the issue of how funds are sold, and what you can specify. They leave other questions unanswered as well. I think I need to actually talk to people at work and people at the financial institutions and see what they all say (whether consistent and/or correct or otherwise).

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Worst case, once funds are withdrawn go in and rebalance your funds are you want them to be.
This doesn't work. The damage may already be done, and cannot be undone.
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Old 11-11-2017, 06:14 PM   #50
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This doesn't work. The damage may already be done, and cannot be undone.
What damage would be done?
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Old 11-11-2017, 06:32 PM   #51
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^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
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Old 11-11-2017, 06:58 PM   #52
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This is why it is crucial to actually read what's in the SPD. I've had the same thing happen because the custodians benefit person is dealing with many plans and sometime the details vary from one employer to another. They'll give you a pat answer without checking so I sometimes need to have a copy of the SPD handy and direct them to the section that permits funds specific transactions, for example. Happens with other features too. Our custodian is Fido so not a small time outfit.
Just read thru my SPD and nowhere in there does it say how funds will be sold. Also remembered that when I called my 401k help line that there wasn't any questions as to who I was, my account or anything like that. So how would they know anything about what I was asking?
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Old 11-11-2017, 07:04 PM   #53
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^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
Unless the plan is really restrictive, one only needs to monitor the plan and when withdrawal shows initiate a transaction to rebalance funds. Doubtful that one or two days is going to really cause "damage". Also equally a possibility that timing is such that you miss a drop in the market and come out ahead.
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Old 11-11-2017, 08:12 PM   #54
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Just read thru my SPD and nowhere in there does it say how funds will be sold. Also remembered that when I called my 401k help line that there wasn't any questions as to who I was, my account or anything like that. So how would they know anything about what I was asking?
There is another document that goes into further detail. Ours is called participant guide or prospectus, I think. Unless it says somewhere that pro-rata transactions are mandatory, I think you should be able to specify. If not, you would need to re-balance to keep your AA in line.

If the line you called was for your specific plan, it may not be necessary to identify yourself. If it's a custodian line that serves multiple employers, they would at least need to know who you work for.
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Old 11-11-2017, 08:19 PM   #55
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^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
You can rebalance the same day that you do the withdrawal and take your chances.

OTOH, it could work out to your benefit too... you could be out of the market during a correction.
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Old 11-11-2017, 09:07 PM   #56
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There is another document that goes into further detail. Ours is called participant guide or prospectus, I think. Unless it says somewhere that pro-rata transactions are mandatory, I think you should be able to specify. If not, you would need to re-balance to keep your AA in line.

If the line you called was for your specific plan, it may not be necessary to identify yourself. If it's a custodian line that serves multiple employers, they would at least need to know who you work for.
+1

Lines can get you to the right people. Same thing with zip codes. If you send smail in, especially to multiple fund companies, pay attention to the full address.

Post office will deliver pallets of mail to specific zip codes. It's very interesting to see how companies depend and use that to their advantage.
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Old 11-12-2017, 02:33 AM   #57
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OP -
You could also over the next few years find a free (no cost if not used) HELOC assuming you own your own home, as you could tap that when retired to cover some of the needed money cost. Paying a low interest rate is better than paying a 10% penalty. Then once you retire, repay it from withdrawals from the IRA, here the issue is you will be pushed into higher tax bracket to pay it off in a few years.
1+ on the HELOC-a good idea even if you DON'T plan on using it.

Have you considered PT employment you might enjoy during that time? Maybe take a 3 month breather first, before beginning? That would take a lot of pressure off. 4 years of PT doing something you like would be easy enough.
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Old 11-12-2017, 05:12 AM   #58
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^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
I was pondering more about withdrawals and my plan allows monthly payments. I had thought to do annual, but monthly would be like dollar cost averaging on the way out.

Man! I've got a lot to think about regarding the switch from savings mode to spend mode!
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Old 11-12-2017, 06:53 AM   #59
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^^^ This is not an issue for us as we keep ~5% cash in taxable accounts and that is what we live on.... withdrawals could then be annually to replenish the 5% in cash in concert with rebalancing our AA.

You could do something similar and save a lot of brain cells.
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Old 11-12-2017, 04:04 PM   #60
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1+ on the HELOC-a good idea even if you DON'T plan on using it.

Have you considered PT employment you might enjoy during that time? Maybe take a 3 month breather first, before beginning? That would take a lot of pressure off. 4 years of PT doing something you like would be easy enough.
The OP is definitely taking potential big future money off the table by withdrawing his 401k early to retire at age 55. That 1.2 million should ride and be doubled?

Sure seems like there would be a better way to avoid this. I agree on a part time job or anything that helps avoid touching that 401k that took many years of work to accumulate.

I am guessing their pensions are solid but these days is any pension something to feel completely safe about?

I know its 54 months of freedom so its worth it. But killing that 401k so quickly with a pension available would bother me.
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