Financial Planning/Retirement
Terry, I turn 67 this year and plan to retire at year-end. Modest amount in 401K, decent home equity and low debt. I will receive a pension from my current employer. Question: I am single with no dependents and my pension will cease when I pass away…in good health now and there is longevity in my family. Should I take a lump sum at retirement and roll into an IRA or a lifetime annuity? Will the tax hit in taking that lump sum be significant? I know that I need to talk to a fiduciary/financial planner but wanted to make sure I’m on the right track in my thinking. Thanks so much!!
Terry Says
In general, you want to make sure you have lifetime income — and your pension will provide that. it will be taxed as ordinary income when you get the checks.
You can take your 40l(k) and ask Fidelity to help you roll it over and avoid taxes. Then age age 72, you will have to start taking withdrawals. Try not to do that until age 72. The withdrawals will we taxed as ordinary income that year.
And I’m assuming you will also qualify for Social Security. Could you avoid taking that until last minute– age 70? That will make a big difference because you’ll start with a bigger check,and that check is indexed for inflation (unlike your pension check).
If you want mroe guidance use the link on my website (top right corener) to “find a finanial planner.” Or go directly to Wealthramp.com to find a FEE ONLY FIDUCIARY financial planner you can trust.
