Can you good folks roll over your severance payouts to an IRA therefore avoid taxes ?
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If you get a new job with a new employer you can max out your 401k with the new employer and use the severance to make up for the lost income now going into the new 401k.
Back in 2002 I took my pension and rolled it to an IRA to avoid taxes on my pension payout. Those who didn't do the above were taxed heavy. Curious when you get a retirement lump sum why don't you Good folks roll it to IRA and avoid heavy tax on retirement payouts.
No
Sure. If you’re over 50, you can contribute $8,000 a person. I’m contributing $16,000 for my wife and I to an Ira. This will reduce my income for last year by $16,000.
IRA money is already taxed. 401 is tax deferred.
Rollovers only apply when moving money from one retirement account to another. Since this is considered earned income, you cannot perform a rollover. You can however contribute $7k to your Traditional IRA ($8k if you turn 50 or over this year). An alternative would be contributing the same amounts to a Roth IRA, however there is no tax deduction with Roth contributions. Those not covered by a workplace retirement plan can deduct the full contribution amount. Since people here are Verizon employees and have a 401k plan, there are income limits based on filing status the prevent you from taking the Traditional IRA deduction. In other words, the more money you make, the less you can deduct. Since the severance payments are larger, it's probably a good assumption you cannot deduct this $7k or $8k amount.
Definitely not allowed. The only thing you can do is roll over your Fidelity 401k funds to an IRA.
no