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I've read the posts on NUA, and have a question. The article I read said if you withdraw stocks from a savings plan, You can elect to pay taxes at your nominal rate on the cost basis, and would have to pay penalties if you are under 59 1/2. My question is, is there any way to do the NUA, pay the taxes, and roll it over into an IRA until you are 59 1/2 to get around the penalty??
For instance, I have about 2k shares of XOM in my retirement account that I paid $13-$15 a share for. The cost basis is about 33k, and the market price today makes them worth 107k. I am only 51, and am retiring on disability. I have a lot of years to live, so want to pay the least in taxes I have to, because I'm going to need the money over the next 30 or so years. I also have 260 shares in a before tax account that the cost basis is about 4K and they are worth about 13k. If I want to use NUA on these, can I, and what are the tax consequences? I plan on rolling it all over into a Vanguard IRA in one form or another. I would like to keep 200-300 shares of XOM, as I still think it's one of the best investments around if you want something safe, and I expect oil to keep going up and their profits to keep going up, also. The rest I will probably put into a balanced fund (Like the Vangurard Target Retirement 2015) until I decide how I want to split it up. I've had several good posts from Chin and others on sample portfolios, but won't have enough info in two weeks to decide how to set it up.
I am wide open to suggestions on whether to use NUA or not, but won't have a lot to pay extra taxes with. Any help is appreciated. Hal
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