Soon to be 59 1/2 . 401K advice. |
|
|
|
bancho
New Poster
Cash: $ 0.45
Posts: 2
Joined: 06 Jul 2015
Location: Nogakes, Arizona |
Soon to be 59 1/2 . 401K advice. |
|
|
Hello all,
I am in need of financial advice. I will be 59 1/2 next August, I have a full time job and a par time job. I have 401K in both jobs . I have 135 K in my full time job and i contribute 10% of my pay, about 600 every two weeks. I have 115K in my part time job and I contribute 3% of my pay, about 50 dollars every two weeks. My youngest son will be attending college on August and I will need about 1500 a month. Here is what I was planning to do:
1. Roll over the 115 K from my part time job into my full time job 401K and decrease my contributions to 3%, which will give me around 1000 K.
0r
2. Take a 25 K distribution from my 115 K and pay off one of my vehicles . Wait for January and do the same thing and pay off my second vehicle. This way, I will have around 1200 a month.
I will appreciate your advice.
Thank you
Frank
|
Mon Jul 06, 2015 9:28 am |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona |
I wouldn't prepay the vehicle loans, car loans are pretty cheap these days, the money is probably earning more right where it is.
As for rolling the 401k's - I doubt that the company rules will let you do that, most Plans require that you quit/retire to take the money. Besides, the tax penalty would be horrendous - according to your numbers, you earn about $200,000/yr - the tax bill on a $25,000 distribution would be about $10,000, Fed & AZ. Leaving you with only $15,000 of your $25,000. It would be better to wait until retirement, when your income/tax rate is low, before you take distributions.
IMO, it's better to leave your retirement accounts alone - and borrow for your son's college - that will be way cheaper than taking a $10,000 hit to get $15,000 cash. Alternately, with your high income - can you cash flow the college costs?
|
Mon Jul 06, 2015 3:09 pm |
|
|
bancho
New Poster
Cash: $ 0.45
Posts: 2
Joined: 06 Jul 2015
Location: Nogakes, Arizona |
Thank you for your reply. Yes, I think I can pay cash for my son's education, I id that with my two older ones. However, this would be kind of tight. I checked and my part time employer allows roll overs after 59 1/2. Thus, is it better to roll over and decrease my contributions to my full time 401K to 3%, instead of taking money out.
|
Mon Jul 06, 2015 3:40 pm |
|
|
littleroc02us
Moderator
Cash: $ 384.35
Posts: 1891
Joined: 09 Feb 2009
|
Do you feel like your going to have enough money for retirement?
Risk comes from not knowing what you're doing. (Warren Buffet)
|
Fri Jul 10, 2015 2:50 pm |
|
|
sunjava
New Member
Cash: $ 1.30
Posts: 4
Joined: 28 Dec 2015
Location: Texas |
FREE Expert Advice For Your Investment |
|
|
We are here to help many people that need financial assistance. You have nothing to loose by just calling us to request for your FREE retirement and Investment Kits. It is FREE for you. We will walk you through all the step by steps process you need. We are based in Texas USA.
Call us to request your FREE Gold IRA/401k Investment Kit on: 1-844-279-3364
|
Mon Dec 28, 2015 4:21 pm |
|
|
|