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Author: mjbxx Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19380  
Subject: def comp 457 - withdrawal method Date: 7/4/2000 3:04 PM
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Am retiring and have one time selection of withdrawal method. (457 plans can't be rolled to IRA's..ugh) With set monthly gov't retirement, hate to choose all 457k income as monthly income as well. Does it make sense to take some large tax hits in certain years..in order to have more flexibility with the money?..Majority of money is in house and deferred..but some stock. Since 457 is taxed as ordinary income..would like to get some out of 457 and into stocks..which are taxed at lower rate when sold. Also..lower income years could be beneficial for some social security benefits..when that time does come. Any input on this?
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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: 4375 of 19380
Subject: Re: def comp 457 - withdrawal method Date: 7/4/2000 3:20 PM
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Greetings, Mjbxx, and welcome. You wrote:

<<Am retiring and have one time selection of withdrawal method. (457 plans can't be rolled to IRA's..ugh) With set monthly gov't retirement, hate to choose all 457k income as monthly income as well. Does it make sense to take some large tax hits in certain years..in order to have more flexibility with the money?..Majority of money is in house and deferred..but some stock. Since 457 is taxed as ordinary income..would like to get some out of 457 and into stocks..which are taxed at lower rate when sold. Also..lower income years could be beneficial for some social security benefits..when that time does come. Any input on this?>>

As you pointed out, when you take the 457 money out of the plan it is immediately taxable. Thus, you should run some numbers for yourself based on your personal situation to see what that impact will be. There may be an advantage to you over the long run in taking distributions one way versus another, but only you can run the numbers to see based on the payout options available within your plan.

Regards..Pixy



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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4379 of 19380
Subject: Re: def comp 457 - withdrawal method Date: 7/4/2000 8:42 PM
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When my time comes, I expect to take a lump sum in the year AFTER I retire, making retirement be toward the end of the year if necessary. Then my income for half a year or whatever won't push my tax bracket up.
And also, then I can put the after tax amount into whatever investments I choose.
Sound like a plan?
Best wishes, Chris

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Author: mdorsey One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4388 of 19380
Subject: Re: def comp 457 - withdrawal method Date: 7/5/2000 10:16 AM
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In my 457 I was able to take a partial lump sum the first year. After that I am taking about 12% out each year to minimize the tax hit. I have good mutual funds to choose from in the 457. I am able to switch from stocks to bonds to MM any day. So there is plenty of flexibility.

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