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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75378  
Subject: Re: Taking Lump Sum Distributions Date: 11/29/1999 9:52 AM
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Buznitz wrote:

<<I'm about 4 years away from retirement and have been able to contribute to my company's 457 deferred comp plan on a regular basis. The funds do ok, but I think the money could do better in the long run if it were in stocks. What's opinion on taking funds in a lump sum distribution when I retire and invest them in stocks

Several things you need to consider about taking a lump sum. First you will have to pay income taxes in the year you take a lump sum. If the lump sum is a large amount the taxes will be significant, and you will have less to invest in stock. An alternative is to convert to an IRA which can be self directing. Then you can invest as you wish the entire amount with the gains remaining tax deferred. Also you need to consider that at 70-1/2 you will have to begin minimum withdrawing. Go to the 401K Board for more info.>>


Good suggestions for 401k, 403b and defined benefit plans; however, a 457 plan cannot be transferred to an IRA in that it is not a qualified retirement plan for that purpose. On retirement, the proceeds must be taken and taxed. How that taxation occurs depends on whether the money is taken as a lump sum or in installments over time.

Regards..Pixy
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