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Old 02-07-2017, 10:53 PM
 
466 posts, read 290,771 times
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I think this is correct, but just want to confirm. After I turn 59 1/2, I can withdraw any amount I want on a monthly basis (assuming my plan allows), without penalty and without the IRS setting the amount (i.e., RMDs) , yes? So I can set my own budget and not have the monthly withdrawal calculated based on the longevity charts the IRS uses. Am I correct? Thanks!
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Old 02-08-2017, 02:50 AM
 
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yes you are correct . but it may depend if we are talking in service still working at the company or whether you left . but if you are not working there anymore the best thing is roll it in to your own ira .

you will have it in your control , will have more choices and likely cheaper fees .
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Old 02-08-2017, 03:21 AM
 
Location: Central Massachusetts
4,800 posts, read 4,848,939 times
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Quote:
Originally Posted by Kgryfon View Post
I think this is correct, but just want to confirm. After I turn 59 1/2, I can withdraw any amount I want on a monthly basis (assuming my plan allows), without penalty and without the IRS setting the amount (i.e., RMDs) , yes? So I can set my own budget and not have the monthly withdrawal calculated based on the longevity charts the IRS uses. Am I correct? Thanks!

mathjak is correct you can start a payment plan out of your 401k. I do have one exception to mathjak's point though. He is very right though you may or may not have access to your money in-service meaning if you are still working for the company you might be able to take in-service. TSP allows a one-time in-service withdrawal. If that is the case you can take enough and roll it out to an IRA to make those payments from there.

Quote:
Originally Posted by mathjak107 View Post
yes you are correct . but it may depend if we are talking in service still working at the company or whether you left . but if you are not working there anymore the best thing is roll it in to your own ira .

you will have it in your control , will have more choices and likely cheaper fees .
I only have one exception and you mention it in your last line. Check with your plan. Some plans are very efficient and have low fees. For one if you are under TSP the federal government 401k you will not find lower fees anywhere else. That being said most often it is best to roll it out of the company plan for not just lower fees and more options. Wresting control of your account is very important because you do not want your former employer's troubles affect your retirement while you are collecting that money. For anyone under TSP though I say yes check out other options but do not completely close your TSP account. If you find that you do not like the choices out there you can roll it all back to the still open account.
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Old 02-08-2017, 03:36 AM
 
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what i found interesting is my old company used fidelity . i had some of the same funds in the plan as i owned out off the plan . the in plan funds were the same funds but carried a different symbol even though the fund was the same and fees were higher in the 401k versions . not by much but enough to be noticeable.

fidelity does offer a 3rd version of the same fund but the plan has to have a huge amount of money in it in order for the company to get the next level of fees .
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Old 02-08-2017, 03:45 AM
 
Location: Central Massachusetts
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yes that is good to know. I have had to look and learn all of that too. I have been looking at options when the wife retires. We are going to roll it out of her company plan and into her own IRA. It will be a few months from now. She retires in September. The nice thing is that although we will pay a price in the roll over we have many years before we need touch it. It also will just reach 100k and maybe a bit more so we will not be affected by RMD for her either. I am pretty sure that I read that RMD's only last until the account reaches a balance of 100k.
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Old 02-08-2017, 09:48 AM
 
Location: Southern California
372 posts, read 448,408 times
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Quote:
Originally Posted by golfingduo View Post
yes that is good to know. I have had to look and learn all of that too. I have been looking at options when the wife retires. We are going to roll it out of her company plan and into her own IRA. It will be a few months from now. She retires in September. The nice thing is that although we will pay a price in the roll over we have many years before we need touch it. It also will just reach 100k and maybe a bit more so we will not be affected by RMD for her either. I am pretty sure that I read that RMD's only last until the account reaches a balance of 100k.
Although I like the idea of your last sentence, I don't believe it's accurate information. The IRS is
going to want the taxes on that deferred money.

My late father-in-law was taking RMDs from his IRA which, when he died at age 86, had less than $50k in it.
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Old 02-08-2017, 10:31 AM
 
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i never heard of 100k either being a cut off
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Old 02-08-2017, 11:18 AM
 
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Nope, no cutoff for RMD.
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Old 02-08-2017, 11:56 AM
 
Location: OH>IL>CO>CT
5,237 posts, read 8,406,103 times
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Question What "price" ?

Quote:
Originally Posted by golfingduo View Post
yes that is good to know. I have had to look and learn all of that too. I have been looking at options when the wife retires. We are going to roll it out of her company plan and into her own IRA. It will be a few months from now. She retires in September. The nice thing is that although we will pay a price in the roll over we have many years before we need touch it. It also will just reach 100k and maybe a bit more so we will not be affected by RMD for her either. I am pretty sure that I read that RMD's only last until the account reaches a balance of 100k.
What "price" are you paying ? I've done 4 rollovers, and never "paid a price".

Maybe loss of co. match in a 401K, but that's not a loss due to rollover.

Also, as others have said, there is no 100K "safe-harbor" for RMDs. In Pub 590B at
https://www.irs.gov/pub/irs-pdf/p590b.pdf the IRS says:
"You cannot keep funds in a traditional IRA (including SEP and SIMPLE IRAs) indefinitely. Eventually they must be distributed."
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Old 02-08-2017, 12:06 PM
 
Location: Central Massachusetts
4,800 posts, read 4,848,939 times
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https://www.irahelp.com/slottreport/...our-retirement

Quote:

#4 - Eliminate RMDs if Your Total Savings in Tax-Favored Retirement Accounts is $100,000 or Less
The proposal - If you have $100,000 or less across all of your tax-favored retirement accounts, such as IRAs and 401(k)s, then you would be completely exempt from required minimum distributions. Defined benefit pensions paid in some form of a life annuity would be excluded from this calculation. If this provision were to become law and you had $100,000 or less in your retirement accounts, you could take as much or as little from those accounts as you want during retirement, without fear of penalty. Required minimum distributions would phase in if your total cumulative balance across all retirement accounts is between $100,000 and $110,000. Those amounts would be indexed for inflation.
Comments Ė Itís really hard not to be a fan of this provision. Thereís really no reason why someone with a 15,000, $20,000 or even $100,000 IRA should be forced to withdraw specified amounts from their retirement account each year. It simply creates complexity without any real benefit. In fact, the projected cost, in terms of lost tax revenue, by making this change, amounts to just $5 million total over the next five years. Iíd call that a drop in the bucket on budgetary scales, but it wouldnít even be the size of a drop!
Sure, some will argue that those with $200,000 in their retirement account should be exempt from required minimum distributions. Others will argue $300,000, and still others will argue the limit should be $1 million. In the end, the line has to be drawn somewhere and there will always be those on the other side. The only thing I can point to in this provision that Iím not a fan of is the phase out range. The required minimum distribution rules are hard enough without factoring in a phase out on top of it. Perhaps this would be one area where a phase out should be eliminated and replaced with a cliff. Those with $100,000 or less in their retirement accounts would have no required minimum distributions, while those with more would have them. That would make the rule simpler, and in the end, the cost of compliance for those with between $100,000 and $110,000 in retirement account savings probably isnít worth the benefit anyway.
I thought this went through.
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