Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I have been lucky enough to retire at age 56. I have a 401K plan. I plan on taking regular distributions from my 401K.

The Trustee for my plan will set up monthly, quarterly or annual distibutions from my 401K but once designated will not allow any changes. I will not pay the 10% tax penalty with this option.

The Trustee has limited investment opportunities for my 401K. I would, therefore like to move it to a self-directed IRA.

I chose a discount broker and filled out the forms but when I got to the form for distribution of an IRA none of the check boxes fit my situation without my having to pay the 10% tax penalty. I talked with a representative of the broker and he told me I had to get an agreement with IRS for some number of equal distributions and, since they were a discount Broker, they did not do that.

I tried to contact the IRS and was told so sorry we are too busy to talk with you.

My questions are... Do I have to keep the 401K in order to get distributions without paying a penalty?
If not, how do I set up a self-directed IRA and reach agreement with the IRS for distributions?

Any answers or adicve would be appreciated.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.