rollover 72t account
L1: rollover 72t account
I have 2 accounts at schwab, and i want to take the money in both accounts and roll them over into my state retirement account. The state account does not seem to have a formal 72T available but they will let you set us monthly withdraws, if i set the monthly withdraws to the same amount as the (2) 72t withdraws with schwab, will that be ok ? DOB 11-8-66, first wdraw was 8-17. Thanks
2018-08-21 12:47, By: demj1308, IP: [184.108.40.206]
L2: rollover 72t account
You didn’t mention why you wanted to do this. Usually 401-K and 403-B plans have limited investment options, while brokerages have an unlimited diversity of investments.
If you are unhappy with the performance of your IRA accounts, just change the investments.
However, this might be an interesting move if you plan to retire when you become 55, and are looking to use that special provision to take distributions without the 10% early distribution penalty. But you already have that set up with your SEPP 72-T.
BUT, I do not think that you can “co-mingle” SEPP 72-T funds with your 403-B funds. I think that they have to be separate accounts, and I doubt that the 403-B administrator would keep them as separate from your current 403-B account.
2018-08-21 14:43, By: dlzallestaxes, IP: [220.127.116.11]
L3: rollover 72t account
Basically im paying a person to mange the funds in the schwab accounts and im not happy with what im paying, the state pension plan has “self directed brokerage account” which allows you to invest in pretty much anything. I have retired at age 50, and was using the 72t funds to help supplement my monthly pension. I know that i can rollover the money from schwab to the state, not sure if would be co-mingled or separate. I was also told by a rep from nationwide where i have a 457 account that if i roll the funds from the 401k into NW they would become exempt from the 10% penalty (the funds i currently have with the state and with NW are exempt as was a public safety officer and was 50 when i retired.
2018-08-22 16:16, By: demj1308, IP: [18.104.22.168]
L4: rollover 72t account
You have provided several significant facts, especially the fact that you were a public safety officer who retired at 50.
IRS form 5329 provides for a code “01” to indicate that any distribution from your 457 or 401-K is exempt from the 10% early distribution penalty. This exception is not applicable to distributions from IRA accounts.
In addition, you are permitted to take a distribution of $ 3,000 per year from eligible retirement plans that is used to pay premiums for Accident, Health, or long-term care insurance. The distribution must be paid directly from the plan to the insurance provider. You report the Gross Amount of this distribution on line 16a, and the Taxable Amount (probably -0-) on line 16b, and enter “PSO” next to line 16b.
I do not think that you can terminate a SEPP 72-T plan in your IRA by rolling it over to your state 401-K. I believe that you could have done that before you started the SEPP 72-T.
Since your 401-K and 457 are not subject to the 10% penalty, I would suggest just taking applicable distributions from those accounts if you are permitted to do so.
As far as your IRA accounts, and their performance, you have a few options. First, you could change brokers, and do an electronic trustee-to-trustee TRANSFER to a different firm. Second, you could change the accounts from “managed accounts” to “self-directed IRA accounts”. Your managed accounts charge you a monthly fee, usually 1% (or less for significant AUM, Assets Under Management), regardless of performance, and in many firms are done by computers which generate hundreds of small quantity transactions. (FULL DISCLOSURE — I HATE MANAGED ACCOUNTS!!!) If you change to a commission based account, you only pay fees when investments are bought or sold. If the broker does a good job in selecting specific stocks or taxable bonds in the IRAs, or if he is buying mutual funds, then there should not be many transactions. (Mutual funds are normally bought with at least a 5-year horizon in mind.) Third, you should look at the portfolio to determine the allocation between equities (stocks and stock mutual funds) and fixed-interest investments.
At your age, financial planners recommend a 50/50% split now, and tending towards the fixed-interest side as you get older. However, with your pension, and SS benefits later, John Bogel (Vanguard founder, and devotee of index funds), you can be more heavily weighted towards equities than people without pensions, annuities, or with minimal SS benefits. (This is a facts and circumstances determination.)
Bottom line, I would not recommend rolling your IRAs over to your 401-K plan.
2018-08-22 17:54, By: dlzallestaxes, IP: [22.214.171.124]
L5: rollover 72t account
As long as you can take penalty free distributions from the employer plans due to the PSO age 50 exception, it does not appear that you even need a 72t plan. If that is the case AND if you have your one rollover per 12 month period available, you could simply roll the IRA distribution back to the IRA, and simply report a rollover on your 1040. You would not even indicate that the IRA distribution was originally intended to initiate a 72t plan.
As for the Schwab accounts, if you are unhappy with the managed account fee, you could terminate that account and have Schwab directly transfer the funds back into the IRA account they came from or open a new IRA with Schwab if that former account has been closed. You can then set up a new much simpler portfolio of 3-6 holdings that is completely diversified. You do not need several dozen investments to be adequately diversified. Schwab ETFs have rock bottom ERs and can be bought and sold commission free in your Schwab account, and recently also now in a Vanguard brokerage IRA.
2018-08-22 20:33, By: Alan S, IP: [126.96.36.199]
L6: rollover 72t account
Also, be careful of brokers. In general, many of them do not fully understand the nuances of 401-K, 403-B, 457, SEPP 72-T, etc., especially for public safety officers who retire before age 55 or 59 1/2.
I would look for a financial planner or tax professional who does. Brokers and Investment Advisors expertise is usually primarily in the area of investments.
2018-08-22 20:43, By: dlzallestaxes, IP: [188.8.131.52]
L7: rollover 72t account
Thanks to everyone for there input,i have recently learned that due to the 72T being attached to the account i can no longer add or subtract funds from it. The limitations of this 72T are leading me to lean towards breaking the 72T and paying the 10%, i have only had it in place for a year so the 10% penalty might be worth it to get out from under the restrictions, and as someone had mentioned i can draw money out that is currently with the state pension or my 457 without the 10% penalty as needed.
Know i just need to figure out if i roll this money from schwab (after i break 72T) into the state or my 457 if i will be able to draw that out later without the 10% penalty, Nationwide rep. has assured me i can, but ill feel better with a second source to confirm.
2018-08-23 20:33, By: demj1308, IP: [184.108.40.206]