Pension
I am no longer working at my previous job where I was employed for 29 years and have a pension plan that I am considering rolling over into an IRA and taking equal distributions. I am 54 years old and currently on short term disability, have dependent college tuition, credit card debt and my income is about to be slashed due to the short term disability. Can you advise the proper way to withdraw the equal disbursements or a way to do this without penalties?
Terry Says
OK, you really need a thorough review of our finances before deciding on a SEPP plan — a withdrawal plan of all your retirement assets in “substantially equal payments” that must last for five years.
You do realize that in five years you will have used up all your retirement assets, will be years away from Social Security, and potentially still be unable to work because of your disability. And, I’m not sure how these payments might impact your disability check, if it comes from Social Security!
You need a financial planner — not a product salesperson– to do a review of your entire situation. There may be alternatives. Under thee circumstances, your “dependent” may have to live at home and take out Federal student loans — instead of you contributing anything to tuition. That will be a tough lesson — for both of you.
Go to www.NAPFA.org — the association of fee-only certified financial planners, and search for someone in your area. If you hit a roadblock, please write back to me with your location and I will try to provide a recommendation.
