UPS Prudential 401k after I retire questions?

[wkmac]

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.

On a similar plan myself but I'm letting my 401k ride untouched until I'm 70. The wife and I discussed it and we'll do just find without it until then. Still have my concerns about what will happen with Central States or for that matter you never know what UPS will try. I'm fortunate my 401k can replace the pension income if necessary so for the moment I'm going to play it as if that could be the case at some point. Wish I could have more faith in CS and UPS but I don't.

 

[What'dyabringmetoday???]

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

Lol

 

[What'dyabringmetoday???]

Tax law is not an assumption.
The only way you can rollover into a Roth, without tax consequence, is if your 401k was already invested into a Roth. If that is the case, then correct me if I am wrong that I "assumed" you only invested into the traditional before tax 401k.
I have solely prepared my taxes since 1968.
Also, I have owned several companies, from then, to now. Some failed and some made money.
So therefore, in my retirement years, it scares me that people do not know that money growth is all based on percentages over time.
Reading what I wrote I seem arrogant, but the message I was trying to send was that I was born poor, married poor ( my wife made her wedding dress) and I would strive to educate myself, to protect my family financially.
Now that I am retired, the largest bills I have are taxes and insurance.

Took me along time to get back to the tax question.
Upstate, you are arrogant and ignorant on tax law.
Arrogance is not intelligence and intelligence is not knowledge.

Lol

 

[What'dyabringmetoday???]

Yawn.

Lol

 

[What'dyabringmetoday???]

This is a fantastic place to learn about investing and other money matters and what kind of car to buy and how much it should cost and how much your mortgage should be and not going out to eat and what age you should retire and... lol

 

[twoweeled]

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.

Many advisers are taking about 1% (commission or whatever you wanna call it). Or the funds are loaded? If the adviser is paying for himself and making you 8%, then I guess it's all good. I'd be in heaven if I could depend on 8% in this market. it's a sketchy market we have.

 

[twoweeled]

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".

Good Stuff!! Thanks. I converted an IRA into a Roth many years ago. I just couldn't do it, when I transferred my 401K into a Traditional. The numbers hurt too much to look at.
Very interesting post!

 

[Babagounj]

Most planners suggest not taking out more than 4% of your balance per year .
I've been running my numbers and 3% will work quite well for me .

 

[IVE GOTTA PACKAGE 4U]

Most planners suggest not taking out more than 4% of your balance per year .
I've been running my numbers and 3% will work quite well for me .

With the low interest rates , they are now suggesting a 3% withdrawal.

 

[Babagounj]

oh,darn it .
I'll have to see if I can re-work my numbers to get by on 2% .

 

[IVE GOTTA PACKAGE 4U]

oh,darn it .
I'll have to see if I can re-work my numbers to get by on 2% .

The 30 year Treasury rate is only around 3% right now.

 

[Babagounj]

Too risky, for me .

 

[IVE GOTTA PACKAGE 4U]

Too risky, for me .

The 1% CD maybe?

 

[Babagounj]

I don't think I'll live to see a 30 year bond mature .

 

[IVE GOTTA PACKAGE 4U]

I don't think I'll live to see a 30 year bond mature .

You never know.

 

[Babagounj]

You never know.

But what fun can I do with the money than compared to now , while I'm still active .

 

[UpstateNYUPSer(Ret)]

Most planners suggest not taking out more than 4% of your balance per year .
I've been running my numbers and 3% will work quite well for me .

Mine said no more than 5%. I don't think I'll come anywhere near that.

 

[Nothing by 1030 anymore]

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.

Did you know once you hit 55 and leave you can start withdrawing at 55 with no penalty? I didn't know either. It only applies to company 401s like ours. You can manage the way you want and can set up monthly withdrawals and can take lump sum amounts anytime. The fees are cheaper than anywhere else and they are very helpful

 

[twoweeled]

Did you know once you hit 55 and leave you can start withdrawing at 55 with no penalty? I didn't know either. It only applies to company 401s like ours. You can manage the way you want and can set up monthly withdrawals and can take lump sum amounts anytime. The fees are cheaper than anywhere else and they are very helpful

I recall looking into this years ago. I do remember reading that some sort of scheduled was needed or required. Sounded like you needed a 5 year plan of withdrawals maybe? I was surprised by that option myself.
Also, his concern about being able to take withdrawals. It probably isn't the same for disbursements, but when I did the 401K rollover from Prudential to my Broker - Prudential was pretty slow going. Even after I liquidated. It was a bit of a pain maybe because I also had the self managed account. I hated just sitting in cash until they did whatever at Prudential. I also had the issue with Prudential, with their site being soooo sluggish! I probably trade more frequently than the average, and I just couldn't stand it! That's why I left Prudential, and the issues I had with them.

 

[What'dyabringmetoday???]

Did you know once you hit 55 and leave you can start withdrawing at 55 with no penalty? I didn't know either. It only applies to company 401s like ours. You can manage the way you want and can set up monthly withdrawals and can take lump sum amounts anytime. The fees are cheaper than anywhere else and they are very helpful

Give The Great UpstateNYUPSer a few minutes to get a hold of your post and you will learn all you need to know about the 401 rules and regulations. There is a strong chance you'll get some real good retirement advice also. For free. Lol.