need some advice
L1: need some advice
Hello everyone…I am contemplating opening a 72t…I currently collect a pension check , but find I need additional income….I’m 57 , and still have my retirement fund (an annuity), with my former employer….current balance is $300,000 and I’d only need
$1,000/month extra…is it foolish to open a 72t at this point , or should I just take some cash out and wait until I’m 59.5 , roll it over into an IRA, and then start to draw on it?? Any advice / direction is much appreciated!
2011-08-18 15:09, By: John, IP: [22.214.171.124]
L2: need some advice
If you separated from service in the year you reached 55 or later, any distributions from the plan you separated from are penalty free. And if you meet the age requirement, the next question is what partial distributions the
plan (403b?) offers.
Did you meet that age 55 penalty exception requirement?
2011-08-18 16:34, By: Alan S., IP: [126.96.36.199]
L3: need some advice
Hi Alan…thank you for replying!…yes , I was 55 at the time…hit that age in June 2009 , and retired in August of same year…been collecting the pension for 2 years now but find i need more …My retirement fund is an annuity, and I know I can take
out any amount I’d like….they automatically withhold 20%….do you think it’s worth starting a 72t at this point versus just taking some cash from my retirement?…thanks again!
2011-08-18 17:55, By: John, IP: [188.8.131.52]
L4: need some advice
Your statement that you can still roll this account over means the annuity has not been purchased yet. You might want do some more research on the term annuity, and what your former employer use of that term means.
I believe it to be giving an insurance company the money in return for an annual payout until you pass. The roll over into an IRA would allow a named benficiary to receive the balance in the event of your demise. This would be my personal choice.
2011-08-20 12:03, By: Scott, IP: [184.108.40.206]
L5: need some advice
Since the plan has not been annuitized, you can take out any amount you wish without penalty and therefore do NOT need a 72t plan to avoid the penalty.
The plan should code your 1099R with exception code 2 to reflect your age 55 separation exception.
Verify that this is true before ordering a distribution, and also verify that you can take out any amount you wish and the frequency that these distributions are allowed.
Do not roll the plan over to an IRA until you are 59.5 and can also take penalty free distributions from the IRA. The age 55 exception does NOT apply to IRA distributions.
2011-08-21 00:30, By: Alan S., IP: [220.127.116.11]