401(a) rollover? considering biting the bullet and doing the withdrawal (real estate, debt)

[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.

[chet everett]

ARE YOU OUT OF YOUR MIND?????????????????

Listen, I don't give two farts if you have $2 or $20,000,000 in your 401K -- anyone that does not roll that money into a self directed IRA is flushing it into the maw of the IRS for no good reason. You pay regular income taxes, Federal and State and any local PLUS an extra 10% penalty (unless your over the age limit, which I would be shocked if your were 59.5...) WHAT THE HECK FOR?!?

Do you not realize that if want to put that money into an IRA you could put 100% of it into any number of guaranteed, fully backed bonds or CDs and it will grow -- if you want inflation protection that is available, heck you could buy real estate, gold, any number of investments. You can borrow it from yourself, use it for house purchase and other approved purposes, but if you elect to get the distribution you waste it all.

Why not "enjoy" the whole frigging thing instead letting the IRS take a bite?

[susancruzs]

I agree roll that money over do not touch it! Does not make any sense, geesh, saving is the best thing!

[ufcrules1]

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.

[debtmonger]

Roll that 401K money over. You will enjoy it more when you are retired.

[Donn2390]

Just call the company holding your 401K and ask them for a "Roll over Package". As mentioned, find a bank or broker and put their company name in your rollover package, and you're set...
I think you wanted us all to tell you to take the money and have a ball, but that ain't gonna happen.
Forget you have the money, you will be very happy you saved it when retirement time comes around....

[sterlinggirl]

I agree.

Why pay 35% taxes/penalties now, when you can pay 45% taxes later?

You should also leave it in there so that you can enjoy watching your purchasing power eaten away by inflation as the government keeps the printing presses running to borrow our way out of debt.

You betcha....leaving that money in there is the best thing you can do.

[Donn2390]

Originally Posted by sterlinggirl

I agree.

Why pay 35% taxes/penalties now, when you can pay 45% taxes later?

You should also leave it in there so that you can enjoy watching your purchasing power eaten away by inflation as the government keeps the printing presses running to borrow our way out of debt.

You betcha....leaving that money in there is the best thing you can do.

I would love to get a gander at your portfolio after a stupid answer like that. You can spend your money any way you wish, but don't give bad advise to someone who wants a real answer...

[AlexTx]

Originally Posted by sterlinggirl

I agree.

Why pay 35% taxes/penalties now, when you can pay 45% taxes later?

You should also leave it in there so that you can enjoy watching your purchasing power eaten away by inflation as the government keeps the printing presses running to borrow our way out of debt.

You betcha....leaving that money in there is the best thing you can do.

Wow. I could say so many things right now. But instead, I'll try to help the OP and say, the best thing you can do is roll it over. And continue to contribute so you can have a nice retirement.

The market will go back up and taking money out now makes no sense. You could always put it in a guaranteed or money market fund that will show a slow (around 3%) increase.

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.

[yukiko11]

Roll it over and don't think about it. Afer all, you never thought about it before.
The nice thing about IRA's is that they keep working day after day for you and when you get that "I want it and I want it now" itch, you can't easily get the money out.
I didn't start a retirement fund until I was 40 and now that I am retired, I am not rich, but can afford to buy a home in my choosen retirement city for cash and live the rest of my life without a mortgage..