Thread regarding Verizon Communications Inc. layoffs

From the VZ 401k SPD...

"Withdrawals after Termination of Employment

If you terminate employment with the company, you can request withdrawals from your account. There are no restrictions on the amount or frequency of these post-termination withdrawals. Contact the Verizon Savings Plan Service Center for additional information."

So just a matter of whether the withdraw is coded...

1 - Early (with 10% penalty)

2 - Early with Exception (No penalty, 55 rule)

7 - Normal (No penalty, 59 1/2+)

U - Dividends from Employee stock plan (no age requirement, normal income)

The only reference to automatic distribution equal payments are "When payment is made, you can choose (---other options), or to receive monthly, quarterly, semiannual or annual installments over a period of two to 20 years"

Unless they made up a completely set of new rules that only apply to those people accepting this package... which is highly unlikely.

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thanks for pointing that out 1muk, I was researching that myself and came across the rule

I see nothing about having to take equal distributions for five years for the 55 exception rule. There is another rule, 70t where you have to take equal distributions until the account is depleted. That is not this rule. Do not conflate the two. But yes, by all means consult a tax advisor.

Note that with that 55 rule, you are locked into that withdrawal for FIVE years. Please people, talk to your financial planner.

My wife was laid off from a company several years back and rolled her 401K into an IRA. The guy that manages it for her, as an investment in me hoping I would reward him someday, has been assisting me with quarterly tweaks to my investment choices for nearly 15 years now. In spite of my 401K already being decimated by the Bernie Ebbers Worldcom debacle in 2002, under his guidance since then it has recovered nicely into 7 figures again. In gratitude, he is getting all of it as well as my Pension cash out. He's more than earned it.

FYI to clarify a previous post about the no penalty for early withdrawals on your 401k- you don’t have to turn 55 in the year of separation- you just have to be between the age of 55 - 59 1/2 at the time of your separation from the company where that 401k is. So let’s say you have another 401k with a previous employer, you would not be able to take a withdrawal without penalty from that one (unless of course you met the same criteria). I was considering rolling a prior employer pension fund into my Verizon 401k so that I would have more available to withdraw penalty free but decided to just keep it for later as a monthly benefit when I am of retirement age.

Cash money. It was part of the reason I decided to vsp myself

Remember if you are between 55 & 59 1/2 you will have full access to the funds without the 10% penalty under the current IRS exemption for leaving a company in the year you turn 55. (1099-R, code 2) However if you roll it to a IRA you lose that exemption status and you will a penalty on any withdraw of funds before age 59 1/2. I left mine were it is so I can access it for the next 4 yrs. I'll roll it to an IRA for more control/options when I turn 59 1/2. I rolled my Lump into the 401k, for this reason.

Didn't see anyone mention the 55 rule, so thought I'd bring it up.

When you do the lump sum transfer paper work, it asks you which fund you want it transferred into within the 401k plan.(If you go that route) I had them put it into the "MM Portfolio" account since there is no risk of downside... Because I didn't want to risk it going in during an unusually high point in the market. (It always goes in on the 1st trading day of the month you get it) Then I transferred it to all the the accounts I wanted over the next few months when the markets took a dive during the Feb-March time frame of this year. I got lucky and it worked out pretty well.

For example you would not have done very well if your lump-sum had gone into ANY of the equity funds on either Feb 1st or Oct 1st of 2018. Just food for thought...

always do a rollover. do not leave it with verizon. our plan has limited options. a rollover ira gives you an entire universe of funds.

I have consolidated previous jobs in rollover IRAs and this greatly simplified my life. I did just recently discover the Fidelity Retirement Planning tool through the Fidelity webinars at VZ. After calculating my score and reviewing with a Fidelity representative, I found the confidence to take the VSP. For this reason I'll stay at Fidelity for a while to continue use of this tool and advisors. Learning that I can take a massive pay cut and do what I really want to do and still make ends meet was priceless.

"If I go the IRA route, I'm not sure if I will manage it or roll into a managed IRA (cost will be less than 1%)."

Keep in mind that the charge to manage your IRA is on top of the expenses embedded in each fund they invest your money in. I highly recommend getting a fee-only financial advisor who you pay by the hour to help you develop an investment/ asset allocation strategy. Then meet with them once a year to review your plan and rebalance. This is much more cost effective than paying a management fee and if you are well diversified you will most likely come out ahead this way.

And please for the love of G*d don't let anyone talk you into putting your VSP payout into an annuity. These are designed to make money for the financial advisors and insurance companies.

I'm researching ways to roll my 401k into the start up of a business"

Sorry, but that's a terrible idea. The money earmarked for your retirement should be well diversified, not all in one business.

"How do Vz plan costs compare with IRA?"

It depends on the financial institution you have your IRA with. You have to look at each fund in your 401K portfolio and look at the expense ratio each charges (all this info is on the Fidelity website) and compare those ratios to similar funds offered by the institution you'd be moving your money to. Based on my understand, VZ has such an enormous amount of assets in its 401K, Fidelity gives them low expense ratios. Even a quarter of a percent difference can add up to a lot of money over time if your balance is large.

I'm researching ways to roll my 401k into the start up of a business.. seems there are ways to not have a major penalty doing that.. but it's not that easy.. but also looking at IRA as well.

In addition to my Verizon 401K, I am taking my pension as a lump Doehave not decided yet, but my choices are to roll the lump sum pension into the Verizon 401K (I would have to manage), roll the Verizon 401K and lump sum pension into a IRA. If I go the IRA route, I'm not sure if I will manage it or roll into a managed IRA (cost will be less than 1%).

How do Vz plan costs compare with IRA? Sadly, 401K is something I just left alone all these years and now I need to figure that out.

I plan to leave mine with Verizon’s plan due to the low costs.

Wont decide until I start my next job abd check the 401K there. Most probably Rolling into IRA since many more investing options available.