401k
I have a 401k with a former employer. I’m currently working part-time with a different employer due to physical disabilities (and have applied for SSDI, but am still waiting for a decision). I have some medical issues that I was wanting to get some money out of my 401k for, but was told my former employer, because I am no longer an employee,
will not allow a loan or partial withdrawal or loan. I only need about 1/10th of my total. What can I do with the other 9/10ths to save myself so much in taxes. I am going to be 62 in a month, so the early withdrawal is not an issue. My current part time employer offers an IRA. Do I put $8000 in an IRA and roll the rest into another 401k? How do I know which 401k? How do I know who I can trust? My other concern is, what happens if the amount isn’t enough, or something else comes up? I need something that gives me easy access without penalties or minimal penalties. HELP!
Terry Says
Read this: https://www.terrysavage.com/rollover-now/
Your first step is to do a direct rollover of the old 40l(k) plan to Vanguard or Fidelity as described in the article above. When it moves there, just tell them to put it all in the government securities money market fund — inside the IRA.
If you do the rollover correctly, there will be no taxes. Then you can take a withdrawal from that IRA at any time, with no penalty. BUT, you will pay ordinary income taxes on the withdrawal, so I suggest that you have them withhold about 15% for taxes from each withdrawal.
