age 55 and seperated service

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L1: age 55 and seperated serviceI retired at 56 and seperated service did i need to set up a SEPP. on my retirement buy out and stocks that were part of my retirement.2009-10-13 18:55, By: buzzles, IP: []
L2: age 55 and seperated service
If you separate from service at any time during the year in which you turn age 55 or after that time, you may be able to take partial withdrawals from a qualified company retirement plan. In most cases, the law allows this but does not require it. Because of this, it is often up to the Summary Plan Document that governs how your plan operates as to whether or not you can take partial withdrawals. If you can take them, then you do not need to set up a SEPP / 72t plan. Some plans allow this and some do not. You should check with your HR administrator as to whether your plan allows this. You should also get a copy of the SPD and read it for yourself to verify this, as many plans are complicated and not always well understood by some of the HR people.

As to your company stock, if the stock has gained significantly in value since you purchased it, you can treat it differently than the shares of other companies or funds that your plan holds. There is a very favorable way to take advantage of the tax rules in this case. I will leave the NUA discussion to Alan and / or dlz. They can discuss this feature in detail.

2009-10-13 20:52, By: Ed_B, IP: []

L3: age 55 and seperated serviceWhere are these funds now? If they were rolled over to an IRA, use of the age 55 separation exception and/or use of NUA have both been negated. Youwould need a 72t plan to avoid the early withdrawal penalty in that case.2009-10-13 21:08, By: Alan S., IP: []

L4: age 55 and seperated servicei have put the monies in variable annuities.2009-10-14 16:32, By: buzzles, IP: []

L3: age 55 and seperated serviceCLARIFICATION – YOU would not have bought company stock in your retirement plan. BUT, your employer may have/probably had made its contribution or matching funds in company stock. If so, and if it went up in value significantly from the time of each investment until you separated from service, you can potentially save a lot of taxes.These are called NUA ( Net Unrealized Appreciated Employer Shares). Search this website for prior discussions, or get J K Lasser “Your Income Tax” for a 2-page discussion that is understandable by non-professionals. If your company has this in your 401-K or pension plan, make sure that you DO NOT roll these shares over to an IRA. Gey professional tax advice from someone who is knowledgeable in NUA taxation. Get referrals from other retirees from your company. I saved a client $ 100,000 in taxes when he retired from Merck.2009-10-13 22:50, By: dlzallestaxes, IP: []