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

[Bulldog77]

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?

Good point. Paying the taxes now + the 10% penalty could be a bargain if tax rates skyrocket.

[Oildog]

Call Schwab or some other discount broker, or tax accountant. Ask them to figure how much you would get if you cashed out vs creating a Rollover IRA. I think you would find the answer pretty quickly. (Hint...I'd guess you would get less than $1300 back in cash).

[ufcrules1]

You must have missed my first post. I took my time typing this and making it easy for you.

Let me give you the steps to do this.

1. Find an investment company you like, Bank of america investment (my favorite), Merrill Lynch,TD Ameritrade, etc. and tell them you want to roll over your 401k into an IRA there. They will get your information loaded in their system and then they will tell you who the check needs to be made out to and if you need any other info put on the check.

2. Call the investment firm that your 401k is through. This number will be on any of your statements you get in the mail from them.

3. Tell the investment firm that currently has your 401k, that you want to do a rollover to the new investment place. They will ask you the address and who to make the check out to etc.

4. From there, give it about 2 weeks and the new place will have you IRA.

5. This will not cost you a dime. You won't have to pay any taxes etc. The $2500 will go from one place to the other like magic.

6. If you are smart, you will continue to contribute to that IRA account and then get a tax write off for the amount you contribute.

[chet everett]

Originally Posted by 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.

The difference in a section (a) is that the there is NO employee money allowed in the plan, while the section (k) plans are allowed to have employee contributions.

Since the OP said the money in his plan including HIS contributions it is HE who screwed up the subletter/section.

[writey]

That's not exactly true. You can contribute to a 401a, it is just that the employer stipulates the mandatory amount that you have to contribute. This is in addition to the amount the employer contributes.

[mtb83201]

Originally Posted by chet everett

The difference in a section (a) is that the there is NO employee money allowed in the plan, while the section (k) plans are allowed to have employee contributions.

Since the OP said the money in his plan including HIS contributions it is HE who screwed up the subletter/section.

no, this account was indeed a 401(a), make no mistake about that. I had the option to make it a 401(k) if I wanted to contribute more than the mandatory 6%, but I didn't.

It turns out that I cashed it out and got an awesome new mountainbike. I am glad I did. I ride into the hills almost every day and it was worth every penny. I figured, "why be stingy in the prime of my life?" People get old and can't do as much or have as much fun with their money. I am a nurse, and I often question the elderly for lessons they've learned by the end of their road. They all say "live while you still can" And so I do.

I am preparing for retirement. But my goal is not to have the biggest and the best account, house, assets. My goal is to have enough, which isn't that hard to do according to my definition of "enough." Thank you all for your advice, but the reason for my post was to see if there were alternatives to stashing it for 40 years and hoping that when I cash it out (if I lived that long) it would be worth it. Had it been a more significant sum of money, I probably would have not "wasted" the cash out penalty.