The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Is there a do-it-yourself IRA? Date:  7/23/1999  7:47 PM
Author:  Bobbcat Number:  12513 of 88520

<<but I'm considering rolling over some or all of this money if it's possible to invest tax-deferred money in individual stocks rather than in funds.>>

HOWEVER ! ! ! !

I am assuming the money is still in the original 401(k) plan, but is now held in the plan under your name.

IF you are under 59 1/2, and are considering a withdrawal, a QDRO distribution qualifies as one of the 10% penalty exceptions. That means if you take the money as a lump sum distribution, you'll have income taxes, but not the additional penalty.

The minute those funds hit an IRA, you lose the exception. Distribution prior to age 59 1/2 will have income taxes + penalty.

(However, since you are FOOLISH and will use the funds for retirement so the above was not a necessary comment)
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us