Pension Payout option
My company is transitioning our pensions to an insurance company and giving us eligible employees a one time option to take a payout. My pension has been frozen since 2013 (meaning I will get a set amount once eligible to take it at retirement age). I’m currently 55. My question is can I roll this payout into my existing Roth IRA without a tax implication? Or will I have to pay tax because of it being a Roth? Or two, can I roll this payout into my wife’s Traditional IRA? I know rolling into a Traditional does not have a tax implication now, but I do not have a Traditional.
The options the company is giving us are to do nothing and let it be a pension with the new insurance company, to take a lump sum payout and keep it, roll it into a qualified plan, roll it into our 401k, or begin taking it now. Thanks Terry!
Terry Says
Oh so glad you wrote. Some answers to your questions, then some advice:
No, you can’t roll it into your Roth IRA without paying taxes, so that’s not a good idea at this stage of life.
No, you can’t roll itinto your wife’s IRA — this is YOUR money!
Yes, you can create a NEW additional traditional IRA rollover account. Read this for instructions: https://www.terrysavage.com/rollover-now/
