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401 retirement ?s


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  • 401 retirement ?s

    So I am starting my federal job in a week and trying to get everything squared away ready to start, anyone a 401k expert? I currently have a pretty good chuck of Change in my current plan and they gave me 3 options 1. Cash out get taxed out the ***. 2. Roll it over to new plan 3. Leave it where it is but can't touch it till I am like 70. So #2 sounds like the best deal to me but I know nothing about this stuff am I missing something or is rolling it over my best bet?

  • #2
    Rolling it over is your best bet. If you cash it out, then you will be taxed like crazy on the income, then taxed like crazy again next year when the amount causes your total annual income for the year to bump up in a higher bracket.

    Option 3 is a hail-marry for the administrating company. They are hoping that you die before then and they get to keep a large chunk of your money. A surviving spouse has a huge battle trying to get your retirement from your 401k from a previous employer, regardless if she was named beneficiary or not.

    Option 2 is really the only way you will ever get the most for your money.


    • #3
      I second Shush's assessment, G.


      • #4
        Wait and talk to someone from your new job before you do anything with your old 401.

        I mean someone as in a co-worker not a HR person. I am sure there are options out there for rollover that your HR won't talk about to you

        I think you have a while to work on moving that 401 so there is really no need to rush. The Feds have some good programs and I think you can convert, but I have never been a fed
        Since some people need to be told by notes in crayon .......Don't PM me with without prior permission. If you can't discuss the situation in the open forum ----it must not be that important

        My new word for the day is FOCUS, when someone irritates you tell them to FOCUS


        • #5
          No question roll it over. Check out the "Lifestyle" plans like the L 2040 or L 2050. They automatically balance and allocate your funds into different risk levels ( bonds mutual funds etc) according to your risk acceptance level (aka your expected date of when you will need the money... Hence the 2040 etc). It's like having a free fund manager.


          • #6
            If you're going from military to federal, there's no reason to do any of those. Federal employees get TSP as their 401k, and will be the same account as your military one. When you login to TSP, you only have to switch between your civ/mil accounts. TSP is actually a great investment vehicle; it allows free inter-fund transfers (2/month), and provides a good return, especially if you pay attention to the market and move your funds to the G fund when a downward stretch of the market is expected.


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