I am a little shy of a month before I fall off payroll due to being put in surplus status. How do I maximise my pension and 401k? If I am currently in except status.
If I stay that way when I fall off payroll and break both pension and 401k...will my exception carry over or is it non negotiable and system process that will deduct it?
My husband does not work and we have 3 kids and money is a bit tight right now.
Thank you for your thoughts
17 replies (most recent on top)
Also, hold on to your wallet when talking to financial planner. There are many snakes out there masquerading as financial planners! Many of them just want to sell you a product and take a commission. Do your homework! Ask questions. Verify through multiple sources what any planner tells you. Check them out. If you don't believe me, google "FIP LLC lawsuit" and you'll see how corrupt the financial planning industry is. GOOD LUCK!
He did say that if you are thinking of cashing out your pension don’t do it until 2020
I what was his reasoning for this? Is it specific to you or everyone because he thinks rates will come down?
@@11FwLRys-1wgr Have a look at your plan's prospectus. At my company, I know I can let mine sit until I'm 65 if I want.
"if you are thinking of cashing out your pension don’t do it until 2020..."
For those that have been through it or otherwise are in the know....I guess I assumed that you had a small window to make this decision (to roll pension or not) at time of surplus or otherwise leaving the company...is that not the case? If you leave the pension alone, do you always have the option to roll lump sum out into IRA or 401K?
I spoke to a financial advisor last night. He had many great suggestions. He did say that if you are thinking of cashing out your pension don’t do it until 2020. The amount will be better. Not sure where you are located but I spoke to The Retirement Group in Geneva IL. He has helped over 1000 AT&T employees over the years that are going through this. He was able to provide a lot of information that HR didn’t have answers to.
And there was no charge. Just a great group of people offering advise.
Definitely make an appointment with a Fidelity advisor. Don’t rely on anonymous financial advice.
@11FwLRys-sbv Is spot on actually.
Cash out, buy a bike and go on a trip to New Orleans or Las Vegas.
Download the Uber Driver app.
I rolled off end of March. Was 1.5yrs from rule of 75. Pension didn't get to the rule of 75 so I didn't get my 540K but instead I got 250K. Rolled it into my 401K. Talk to Fidelity about rolling over the pension. I didn't ask about cashing it in for use now so best if that is what you consider to talk to Fidelity of a CPA. Good Luck................Bad time of year to be kicked out of AT&T. Welcome to the $uck$ To Be Me Club.
Thank you everyone for your advice! I will explore all options presented.
Thanks again
Unless they're telling you to talk to a financial planner, don't listen to anything anyone here is telling you. Talking to Fidelity is the best place to start.
Good luck to you.
Also you can use the 72(t) rule to make penalty free withdrawals from IRAs.
You didn’t give us your age.
If you’re not turning 55 this year:
It sounds like money is tight and you don’t want to contribute to the 401K. Call or log into your fidelity account and change your contributions to 0.
Roll the pension into a traditional IRA.
Roll your pre-tax 401k amount into the same traditional IRA.
Roll your Roth 401k amount into a Roth IRA.
The alternative is to leave the 401K with Fidelity.
If you’re turning 55 this year but younger than 59.5: Discontinue contributions to the 401K and leave it alone. Roll the lump sum pension into a traditional IRA.
IRS rules allow you to withdraw from your employer-sponsored 401k (as long as you leave it where it is) penalty free if you lose your job on the year you turn 55 or older. You only need to pay regular tax amounts on the withdrawals if you’re taking money out of the pre-tax portion. No taxes if it’s out of the Roth portion.
If your plan allows it you may possibly want to roll the pension into the 401k as well.
If you cash out your lump sum pension before 59.5, you will pay taxes on the distribution + 10% IRS penalty.
Att advisors? ...that's funny.. be careful
talk to benefits. Depending on your age and NPS, I would just take a cash payout of pension and roll everything inlcuding 401 to an IRA. Also talk to Fidelity. They have some advisors on AT&T team that can help.
I would strongly suggest you consult a financial planner vs anonymous people on a layoff board.