what to do

L1: what to doI am 57 years oldI have been let go at the company I worked for because of downing sizing. I have a 360k 401k account.Also will recieve a 200k lump sum pension pay out. I would like to start a 72t startingin Jan. 2008. I am just going to need 24k for 5 years until I turn 62 and social security kicks in. What do you invest in to still have most of you balance at the end of 5 years. Are annuities or cds a good option. When you withdraw money from a 72t where do you withdraw from. Do you take money from the fund that has done the best in between withdrawals or just at random or does the trustee decide this.

2007-07-20 08:45, By: gator, IP: [71.228.234.92]

L2: what to doCheck with your HR dept to determine if you can take monthly, quarterly or annual distributions from your K-plan after you leave. If so, then leave your K-plan intact and make withdrawals since you will qualify for the “age 55 exception” to the 10% penalty. (Do this for the 5 years then rollover to an IRA.) You”ll just owe taxes on the amounts withdrawn. Then rollover the 200k to an IRA and invest for growth. If your K-plan won”t allow periodic distributions then rollover everthing to an IRA, determine how much you need for the $2k/month, split into two IRA”s so you have one IRA for the SEPP and onefor emergencies to avoid busing the SEPP / 72(t).
I like using Deferred Variable Annuities with the Guaranteed Minimum Withdrawal Benefit (GMWB) rider and taking periodic (monthly, etc.) distributions for funding SEPP. Check with a good advisor to learn about this option. I don”t like CD”s because you won”t get the return you will need over the long-run. The GMWB gives you downside protection while still allowing market rate growth potential. Also, if the market starts tanking, you can reposition the VA investment options to more conservative bond positions. It”s a really great money management tool. However, don”t look at EIA / FIA fixed annuities or trying to fund with an immediate annuity.
Jim2007-07-20 09:35, By: Jim, IP: [24.252.195.14]

L2: what to doCheck with your HR/Payroll Dept. to see if there is any company stock in the pension or 401-K plan. If so, there can be tremendous tax savings by utilizing the NUA (“NET UNREALIZED APPRECIATION”) provisions in the federal tax code. (See J.K. Laser “Your Income Tax”, avbailable for under $ 20 at super bookstores and office supply superstores.)
Also, at your age, I would determine if your lumpsum, and other resources (i.e. home equity loan or line of credit) can get you to 59 1/2, after which you have access to unlimited amounts from your retirement plans without being tied up for 5 years.
Obviously, some combination of all of your options may be advantageous. Meet with a tax and/or financial advisor who is knowledgeable in all of these areas before doing anything. Once you make a “wrong move”, you can”t correct it in these areas.2007-07-20 13:24, By: dlzallestaxes, IP: [141.151.90.43]

L2: what to doGator:
I agree that CDs are not an expecially good investment option for an IRA / SEPP.
If you want to know more about annuities, however, you should make a concerted effort to collect all of the info that you can on them. The Internet is a great resource for this and you can learn a great deal about annuities… and should before investing in them. If, after learning all you can about them, they still appeal to you, get with a good fee-only financial advisor and discuss how they might help you fund your retirement plans.
The advisor is likely to have other options for you to consider as well. Once you have heard that, repeat the Internet info search and learn all you can about the proposed investments. It”s your money we”re talking about here and it matters more to you than to anyone else. You need to participate in its investment to the greatest extent that you can.
Finding a good advisor can be a tough problem. Recommendations from satisfied friends and relatives is often a good place to start. You can also look up the Certified Financial Planner professional organization on-line for CFPs in your area who might be suitableadvisors. Quite often, these people will meet with a prospective client at no charge in order to determine if you can work together. This is a “get yo know you” type of meeting where they discuss their credentials, give references, disuss their fees, and listen carefully to your needs. If that meeting goes well, you may have found someone whom you can trust to give you good financial advice. Expect to pay for anything beyond that becausegood financial advicecan bewell worth it.
Ed2007-07-20 20:59, By: Ed_B, IP: [67.170.159.37]