Has anyone taken a lump sum distribution from the minimum pensiom plan?? I'm an ERP'er from last year (still in my 50's) and have not seriously looked into this yet, With interest rates getting lower again I think it may maximize the amount I could withdraw now and invest more advantageously. I'm looking for advice and experiences from those who have done this.
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@NzjgHFe-2erg. Yes, the more you have in 401k and Intel Retirement Contribution account, the less you'll have in your Minimum Pension Plan. So it is indeed possible to have a zero balance in the Pension. There was a very long and informative thread about it right after ERP. Most of the people took their Pension balances as cash and rolled over to an IRA. Pension annuity is not guaranteed like an ERISA benefit. It can be reduced or eliminated entirely any time the company underwriting it decides to.
my lump sum says zero. Left after 30 years. why so?
left after nearly 30 years. My pension plan has almost nothing in it. How come? was it because 401k and intel profit share account too high?
I have about 36k in my Min. Pension and estimated to have 57k in 10 years at 65. Can I move this out without impacting my 401k and my Intel Retirement Contribution plans? A few years ago I moved my Retirement fund out of the Guaranteed into a Vanguard fund with 0.02% fees and a Russell fund with 0.03% fees. I'm just collecting dividends on it for now but these seem to be really good funds. I thought moving the 36k into a Vanguard or something similar could be better than where it's at now.
Glad I left in ACT, ACT2.0 will have significantly lower benefits, ugly times ahead. Everyone save your pennies for a rainy day as storms ahead
My amount was in 6 figures, I took a lump sum, rolled it into IRA, no tax consequences. Now I have a lot of investment options with this money..Would highly encourage to look at this option. Good luck.
If you are in your 50's I would suggest that you take the lump sum and roll it into a Fidelity or Vanguard account. As stated earlier, both companies are good at explaining your options. There is the gap between now and 59.5, but I would encourage you not to mortgage your future for a "new beginning" or a new car.
I qualified for about $57 per month after 21 years...wow...beans and rice for a few nights...
With interest rates on the rise I think it makes sense to take the lump Doetook mine, rolled it to an ira and rhen "backdoor" converted to a roth and used my severence to pay the taxes on the Roth. Talk to someone at fidelity to run your numbers, I think they are pretty good at explaining the options.
Just a reply to rly's comment, point 1. (about not being able to touch it until 59 1/2 without 10% penalty).
To note, there is an exception if you are 55 or older when you separate from said employer you are not required to pay the 10% penalty. Look at number 4 on Intuits (turbotax) page. This however does not apply if you roll over into an IRA.
https://ttlc.intuit.com/questions/2356803-what-are-the-exceptions-to-10-penalty-for-early-withdrawal-from-401-k
I pulled it out and got a lump sum. Used it to carry me beyond the ERP package pay and try to get my biz going. It was taxed as regular income I believe.
Rolled into IRA and would do again due to better returns over time than the fixed annuity option. But 2 implications to be aware of: (1) can't touch it until 59.5 w/out a 10% penalty (unlike funds from your Intel 401k) and (2) had small hassle taking out a home mortgage since most income comes from investment account div/int and capital gains. Many banks wont count this income (regs from the '08 financial crisis). They want to see guaranteed income such as from the fixed pension payments. In end, I was able to find mortgage lenders that could work around this with same competitive rates.
@NzjgHFe-ktm Rolled over into an IRA, six figures, thanks BK, still on Intel health too!
OP here. For those that took the lump sum distribution, was it treated as ordinary income with social security and taxes withheld? Or was it treated as non-wage income without being subject to social security?
For the responder who rolled the distribution into his Fidelity IRA, was the amount more than the typical IRA maximum amount of $6500?
Lastly - what do you recommend as the best starting place to get a distribution rolling without a lot of run-around?
Yes, pull your cash out of that program. The fees are out of line with Fidelity and Vanguard. Also, I felt their returns were much poorer.
Ditto for me, full cash out as Intel returns and fees are terrible.
I did and rolled it into my fidelity IRA.