Company ESOP for 72T, NUA question
L1: Company ESOP for 72T, NUA questionI currently have a 401K, along with company ESOP stock.
When I have inquired about the NUAmy company stated that a NUA is not applicable in our situation. Does anyone know why, or where I could research it?
Thanks!2009-09-01 14:55, By: Blackwoodt, IP: [188.8.131.52]
L2: Company ESOP for 72T, NUA questionHere is the link I posted on the other thread:
If you determine that you are eligible to use the ESOP shares for NUA, you would probably be able to avoid or at least reduce the amount of your 72t plan using an IRA rollover from the non ESOP assets that are part of your lump sum distribution.
In the event that you are planning a 72t plan directly from the employer qualified plans including the ESOP, I would advise you to eliminate that idea because NUA generally requires a lump sum distribution, and the rollout of a 72t plan eliminates an LSD. In addition, even without ESOP complications, it is advisable to use IRA accounts for any 72t plans.
Or perhaps you are not even considering a substantially equal payment plan, but are concerned about early withdrawal penalties for ESOP shares. In that case, if you will reach age 55 or later in the year of your separation from the ESOP employer, the penalty on the cost basis portion of the shares is waived.2009-09-01 22:54, By: Alan S., IP: [184.108.40.206]