401K
I am 62 and was let go from a job I worked at for 30 years in 2022. Left 401K at Vanguard.
Company explained it could stay there due to its value. New job offers Fidelity. Would this be a good transfer?
Looking to also take some funds from this account to update some issues I am having with condo I am currently living in; it would take some money to update / clean up condo. I understand this money would be taxed however would not have to pay it back into 401K.
Thank You
Terry Says
OK, I think you have the cart before the horse. First find out the rules for taking a withdrawal from your old plan. Typically, they will not allow withdrawals if you are not currently an employee. (If they allowed loans, then when you left the job the “loan” would be treated as a withdrawal, and taxed as ordinary income.)
If they don’t allow withdrawals, you’ll want to do a DIRECT rollover from your 40lk to an IRA Rollover account. You can do this at Vanguard — good idea to leave it there. And you’ll have a wider choice of investments in an IRA. Read this: https://www.terrysavage.com/rollover-now/
After doing the rollover, you can do a withdrawal — no penalty since you are over age 59-1/2. BUT it will be considered taxable income. So make sure you ask them to withhold 20% for taxes.
Then start fresh with your new company in their 40l(k) plan.
