Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
My thanks to everyone who has posted. I wanted to clarify a few things:

1. My 401(k) is with a soon to be former employer (tomorrow) which does offer options other than SP500. I have been comfortable picking stocks for some time but tend to use 401(k) money to dollar cost average into that index. I will have another employer and do this there.

2. I do not know if my current 401(k) employer has a brokerage window, and am not familiar with that term.

3. My intent is not to roll the money into a Roth. We have existing Roths now which aggregate maybe 17% of retirement funds.

4. The intent to start taking SEPPs from traditional IRAs is exactly the kind of thing I was thinking about. I hit 55 in under 7 years, so that window aligns with potential (relatively) early retirement.

5. We will have three kids in college for two years, probably 2015-16, and this might lead us to accelerate a little "harvesting" from retirement accounts. If we do this, I know Roth principal contributions are an option but would prefer to allow this to grow tax free if practical.

JohnH
Print the post Back To Top
No. of Recommendations: 0
4. The intent to start taking SEPPs from traditional IRAs is exactly the kind of thing I was thinking about. I hit 55 in under 7 years, so that window aligns with potential (relatively) early retirement.

Yes, you can do the T IRA SEPP withdrawals before 59 1/2, or simply pull funds without penalty from your 401k after 55 when you quit work. If your new employer has a good plan, you might consider just rolling your current 401K into there so you don't have to deal with SEPP for a while. Or as I said, if you want to keep that option open but allow yourself all the bells and whistles of choosing your own brokerage, just keep the 401K rollover in a separate account and keep a paper trail, so that you have the option to roll it in to your current 401K later. I suspect this is contingent on what your new employer will allow. In this case you have two sets of rules to deal with...the IRS and your employer 401K.

I honestly don't know how much of a PITA SEPP is, but I am happy to be able to avoid it. But our 401K is pretty good in terms of what it lets us do.

IP
Print the post Back To Top
No. of Recommendations: 2
1. My 401(k) is with a soon to be former employer (tomorrow) which does offer options other than SP500. I have been comfortable picking stocks for some time but tend to use 401(k) money to dollar cost average into that index. I will have another employer and do this there.

Wait to roll over the 401K until you see the options for your new employers 401K. If it is a good plan that accepts roll-ins, you might want to roll into the new plan.

2. I do not know if my current 401(k) employer has a brokerage window, and am not familiar with that term.

For 401K that have this, it allows moving a percentage of the balance into a subaccount that you can directly control.

5. We will have three kids in college for two years, probably 2015-16, and this might lead us to accelerate a little "harvesting" from retirement accounts. If we do this, I know Roth principal contributions are an option but would prefer to allow this to grow tax free if practical.

If you are going to need money that soon, then only contributing the amount necessary for matching and putting the rest in a regular account would minimize the amount that would need to be withdrawn from retirement account.
Print the post Back To Top