401(a) rollover? considering biting the bullet and doing the withdrawal (company, tax)

[NCyank]

Originally Posted by AlexTx

No financial advisor will EVER advise withdrawing the money and paying the penalty. Talk to one if you're still unsure or don't know what investments to pick.

Unfortunately you'd probably be able to find some who would suggest this to OP. We've seen some pretty bad advisers out there.


However, I'm going to jump in with the others here and say to roll it over. I can't can't imagine how you could still enjoy spending it knowing you just turned $2500 into $1600.

[wheelsup]

Originally Posted by NCyank

Unfortunately you'd probably be able to find some who would suggest this to OP. We've seen some pretty bad advisers out there.


However, I'm going to jump in with the others here and say to roll it over. I can't can't imagine how you could still enjoy spending it knowing you just turned $2500 into $1600.

It wasn't ever $2500. That was pre-tax. So he's going to lose the difference either way. It's not going to cost him a lot to cash it out, just that 10% penalty.

[NCyank]

Originally Posted by wheelsup

It wasn't ever $2500. That was pre-tax. So he's going to lose the difference either way. It's not going to cost him a lot to cash it out, just that 10% penalty.

But isn't the idea that in retirement your tax bracket is often much lower so you wouldn't be paying as much if you wait to take it out then? Still, you are right....there will be some tax to pay even if he waits.

[sterlinggirl]

Originally Posted by NCyank

But isn't the idea that in retirement your tax bracket is often much lower so you wouldn't be paying as much if you wait to take it out then? Still, you are right....there will be some tax to pay even if he waits.

That's the idea all right...but that theory assumes the government won't raise taxes.

With the states going bankrupt and the federal government spending money like a drunken sailor do you really think taxes won't go up?

[chet everett]

Originally Posted by sterlinggirl

That's the idea all right...but that theory assumes the government won't raise taxes.

With the states going bankrupt and the federal government spending money like a drunken sailor do you really think taxes won't go up?

Do you really think that the billions of dollars that people have locked into retirement accounts are not going motivate huge fights to literally have any law makers assassinated if excessive taxes are put forth?

[PeacePlease]

My opinion, is that it depends on what you will do with the money. If you will use it for say buying a nice TV, then I agree you should roll it over. However if you are unemployed and need to pay your rent, or you have a beat up car that is broke down and you can't get by without one, then I would take the money out.

[wheelsup]

Originally Posted by NCyank

But isn't the idea that in retirement your tax bracket is often much lower so you wouldn't be paying as much if you wait to take it out then? Still, you are right....there will be some tax to pay even if he waits.

I dunno, I'm putting all of my $$ into my Roth IRA and Roth 401k. Either taxes go up to pay off debt OR our currency tanks. If the latter happens we're all pretty much toast no matter how much $$ you have.

[writey]

Are all you guys morons or something! The initial question was about a 401(a), not a 401(k), but everyone seems to have ignored this. So what are the options? Can you roll your 401(a) into a 401(k), or a into an IRA? Perhaps rolling-over out of a 401(a) is not possible, or at least not easy, and that is why the person is considering taking the money.

[homeowner35]

Originally Posted by mtb83201

I have this pesky 401a that is going to be lingering around after I quit my job. This was a result of a mandatory 6% participation with my employer. I have $2500 racked up. I figure about 35% loss (I would get about $1625) if I just pull it. But I'm wondering if there is a better option.

The way things have gone historically, and the way things are headed, I figure I might as well enjoy it.

I think you should roll it over into an IRA and invest in a balanced portfollio. Vanguard is suppossed to very good. I do not like 401ks but it is important. You can't put all of your eggs in one basket.

[Bulldog77]

Originally Posted by AlexTx

No financial advisor will EVER advise withdrawing the money and paying the penalty. Talk to one if you're still unsure or don't know what investments to pick.

That's because they won't make money off the deal.