AboutWillard R. Brumbaugh, LUTCF Expertise I have answered many questions regarding 401ks, IRAs and annuities as well as life insurance.
I have been counselling against most Qualified Plans since 1994.
Experience Ranked in the top 5 in retirement catagories at Askme.com most of its last 2 1/2 years. Organizations I belong to:
National Association of Insurance and Financial Advisors-California
Inland Empire Estate Planning Council
Education/Credentials Life Underwriters Training Council Fellow
Question I am 55 years old. I was laid off almost 1 year ago, I left my 401K intact $200,000,00. What is the best way to handle this? Should I roll it to a traditional IRA, and would there be any tax penalties?
Answer Dear Cary,
You most certainly should transfer your funds to an IRA. As to which IRA or IRAs, I need more information. Do you need to begin taking withdrawals? If not, when do you want to start taking distributions? Are you leery of additional stock market losses? What are your family concerns?
There is no tax charged for moving the 401(k) funds directly into an IRA. However, if you were to take the money in cash to be put into an IRA later, your former employer would have to withhold 20% ($40,000) and send it to the IRS. If you could not cover that 20%, you would be taxed and penalized for a premature distribution.
Willard R. Brumbaugh, LUTCF
CA License 0374776
www.willardbrumbaugh.com
(888) 792-2379
