UPS Prudential 401k after I retire questions?

[onehandsolo]

I plan on retiring at 56 and I have some questions.
If I decide to stay in the Ups Prudential 401k plan will I still be able to manage my funds including the self managed account as I do now? Also when I start to withdraw money post 59.5 will I be able to withdraw per my request or do I have to schedule my withdraws in advanced like an annuities payment.

 

[burrheadd]

Yes

Yes

No

 

[retiredTxfeeder]

I took a withdrawal after I turned 59.5 to pay cash for a new car, That is taxable income. I think they held out a flat 20%, which wasn't enough. It took about a week to get the check. They didn't do direct deposit then. Hope this helps.

 

[onestoptogo]

You actually can start withdrawing funds at age 55 without penalty. Google "rule of 55" for 401k. The penalty free withdraw only apply if you are 55 - 59.5 years old and you are fired or retire from your last employer without intending to re-enter the workforce.

 

[UpstateNYUPSer(Ret)]

I plan on retiring at 56 and I have some questions.
If I decide to stay in the Ups Prudential 401k plan will I still be able to manage my funds including the self managed account as I do now? Also when I start to withdraw money post 59.5 will I be able to withdraw per my request or do I have to schedule my withdraws in advanced like an annuities payment.

I met with my financial adviser (Edward Jones) earlier this month. Our plan is to roll my 401k over to my Roth IRA and to invest it with an expected rate of return of at least 8%. He further advised that I limit my annual withdrawals to no more than 5% of total balance so, as you can see, investment returns should more than replace my withdrawals.

 

[Catatonic]

I met with my financial adviser (Edward Jones) earlier this month. Our plan is to roll my 401k over to my Roth IRA and to invest it with an expected rate of return of at least 8%. He further advised that I limit my annual withdrawals to no more than 5% of total balance so, as you can see, investment returns should more than replace my withdrawals.

Rational and conservative.

 

[UpstateNYUPSer(Ret)]

Rational and conservative.

I have a fairly modest lifestyle. My pension should be more than enough for me to live comfortably.

 

[don't know]

My 1099 R form did Not have the box checked for Total Distribution (I took the pension buyout in December). So is it a mistake on Mellon's part or is there money still in the account that I don't know about? My tax advisor caught it today when he was doing my taxes. Does anyone else not have the box check marked?

 

[IVE GOTTA PACKAGE 4U]

You actually can start withdrawing funds at age 55 without penalty. Google "rule of 55" for 401k. The penalty free withdraw only apply if you are 55 - 59.5 years old and you are fired or retire from your last employer without intending to re-enter the workforce.

But.... You may trigger a state income tax if you take it before age 59.5

 

[satellitedriver]

I met with my financial adviser (Edward Jones) earlier this month. Our plan is to roll my 401k over to my Roth IRA and to invest it with an expected rate of return of at least 8%. He further advised that I limit my annual withdrawals to no more than 5% of total balance so, as you can see, investment returns should more than replace my withdrawals.

I am sure your financial "advisor" has only your best interest at heart.
You can not just roll over a traditional 401k into a Roth IRA without paying taxes on the amount transferred. Those monies transferred are taxed as earned income.
As an example, if you transferred $200,000.00 from your 401k to a Roth you would pay an effective tax rate of 18.6%, which would be about about $37,000.00.
If you transferred $400,000.00 your effective tax rate would be 28.8%, which would be about $115,000.00.
That being said, you "expect" a 8% return, not a guaranteed 8%. Only an annuity can make that promise.
Now that your nest egg has been reduced by paying taxes, your "advisor" will still take 1.5% yearly commission on your monies no matter what percent the funds make. If you "make" 8%, you only keep 6.5%. If you lose 10%, your "advisor" still makes 1.5% on what you have left.
For young people under the age of 45, the Roth is the best way to go. I will not go into the math of why that is the case.
If you only take 5% out of your 401k yearly, you will pay less effective tax rate and not give away your hard earned money to an "advisor".

 

[IVE GOTTA PACKAGE 4U]

I am sure your financial "advisor" has only your best interest at heart.
You can not just roll over a traditional 401k into a Roth IRA without paying taxes on the amount transferred. Those monies transferred are taxed as earned income.
As an example, if you transferred $200,000.00 from your 401k to a Roth you would pay an effective tax rate of 18.6%, which would be about about $37,000.00.
If you transferred $400,000.00 your effective tax rate would be 28.8%, which would be about $115,000.00.
That being said, you "expect" a 8% return, not a guaranteed 8%. Only an annuity can make that promise.
Now that your nest egg has been reduced by paying taxes, your "advisor" will still take 1.5% yearly commission on your monies no matter what percent the funds make. If you "make" 8%, you only keep 6.5%. If you lose 10%, your "advisor" still makes 1.5% on what you have left.
For young people under the age of 45, the Roth is the best way to go. I will not go into the math of why that is the case.
If you only take 5% out of your 401k yearly, you will pay less effective tax rate and not give away your hard earned money to an "advisor".

If you buy an up front load fund you don't have to worry about that.


BTW Welcome back

 

[satellitedriver]

If you buy an up front load fund you don't have to worry about that.


BTW Welcome back

Why should I buy a Load? That is just giving money away.
Our 401k fund rates are damn cheap and the self managed account rates are excellent.
Thanks for the welcome, but I will only pop in and out.

 

[IVE GOTTA PACKAGE 4U]

Why should I buy a Load? That is just giving money away.
Our 401k fund rates are damn cheap and the self managed account rates are excellent.
Thanks for the welcome, but I will only pop in and out.

No problem. I was just going by your post and seeing your advisor fee comment.

 

[Bad Gas!]

I am sure your financial "advisor" has only your best interest at heart.
You can not just roll over a traditional 401k into a Roth IRA without paying taxes on the amount transferred. Those monies transferred are taxed as earned income.
As an example, if you transferred $200,000.00 from your 401k to a Roth you would pay an effective tax rate of 18.6%, which would be about about $37,000.00.
If you transferred $400,000.00 your effective tax rate would be 28.8%, which would be about $115,000.00.
That being said, you "expect" a 8% return, not a guaranteed 8%. Only an annuity can make that promise.
Now that your nest egg has been reduced by paying taxes, your "advisor" will still take 1.5% yearly commission on your monies no matter what percent the funds make. If you "make" 8%, you only keep 6.5%. If you lose 10%, your "advisor" still makes 1.5% on what you have left.
For young people under the age of 45, the Roth is the best way to go. I will not go into the math of why that is the case.
If you only take 5% out of your 401k yearly, you will pay less effective tax rate and not give away your hard earned money to an "advisor".

My Advisor charges only 1 per cent which is a good rate. Capital Investments..Wes Moss Team.

 

[IVE GOTTA PACKAGE 4U]

My Advisor charges only 1 per cent which is a good rate. Capital Investments..Wes Moss Team.

Does he give you a discount when the market is down.?

 

[olroadbeech]

My Advisor charges only 1 per cent which is a good rate. Capital Investments..Wes Moss Team.

My Vanguard advisor charges 0.30%.

 

[Bad Gas!]

Does he give you a discount when the market is down.?

Nope!

 

[IVE GOTTA PACKAGE 4U]

Nope!

I don't have an advisor. I use Vanguard. But when I switch I will pay the upfront fee.

 

[Jones]

My Advisor charges only 1 per cent which is a good rate. Capital Investments..Wes Moss Team.

It's a good rate for him, not so much for you.

 

[IVE GOTTA PACKAGE 4U]

It's a good rate for him, not so much for you.

He asked money even if he doesn't.