Pension
I will be turning 65 in February. I have a pension that I want to take in one lump sum because of some circumstances that came up. I know they take 20% for taxes initially . Since I don’t need the full amount of the lump sum I’d like to put about $30,000 somewhere that I don’t have to worry about being taxed on again. Where might that be? Thank you!
Terry Says
Well, then you definitely DONT want to take a lump sum distribution! YOu need to ROLL OVER that lump sum to Vanguard or Fidelity, into an ROLLOVER account, where it can keep growing tax-deferred. Then you can think about taking out withdrawals — and withholding at an appropriate percentage so you don’t fall into a tax penalty. Yes, that withdrawal will be taxed as ordinary income.
And you should think about using money outside this pension savings and giving the money a chance to grow until you are 72 and required to take distributions.
