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?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.
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.^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
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?
^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
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.
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.
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.^ Being out of the market and missing an upswing (if stocks are liquidated rather than bonds/cash).
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.
SO like many i have chucked a bunch of $ in 401k's of all of my employers. I worked 20 years for one Co, then 6 years, and presently 5 years. I now have what i think may be enough saved to retire early- But of course it is not that easy.
Since i have the 1.3 mil in a IRA (rollover from previous employers) i can only access THAT $ with a 72t, since i am 55.5 YO. BUT if i had that amount in my present employers 401k, they would let me access as much as i want.
WEIRD that the Gubmint would have such different rules....
It seems almost everyone on this site hates the idea of a 72t, but what if you switch employers your whole career and end up with 1.5 mil in an ira, but only 150K in your present employer 401k when you are 56?
I like the 72t idea, but i think the penalty for over withdrawal should be amended. Maybe tell me- hey you took 100 $ too much, We have to penalize you 500$, and you have to return the 100$- makes sense, NO?
I also think the 72t should be able to be used as a bridge to 59.5- why does it have to be 59.5 years old or 5 years - whichever is LONGER?
I have seen a lot of people from my first employer ER after 55 with the 401k exception- sucks i dont have the same option even though i am probably in the same financial position.
+1 many 401k plans allow active employees to roll in money from a tIRA to the employer's 401k.
https://www.nerdwallet.com/blog/investing/rollover-ira-to-401k/
I was trying so hard to figure out how to get the $ OUT of my present employer 401k that i had not thought of the reverse. I need to check the plan to see if i can take distributions VS lump sum from their plan.
The unfortunate thing is, none of my Mega Corp funds beat the S&P - but the Trowe price funds from my IRA are crushing the S&P- so i may just have to ....sigh....... sigh again......wait a few years