I am over 55. If I leave Dell by layoff or my own decision, will I be able to choose whether I an withdraw from Fidelity's traditional 401k or the Roth? Or do they just have one bucket split proportionally?
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I left Dell 3 years ago and haven't touched my 401k other than to rebalance funds. I am up 36% since I left.
Seems like a confusion between withdrawal and rollover.
The rule of 55 only covers the 10% penalty if you withdraw funds before 59 and 1/2
And then there is the difference between Roth 401k and traditional 401k
Rollover should be tax free event but you would need to be careful about any taxable account in your 401k because rollover to an IRA eliminates the rule of 55 benefit
So if you need the money in the taxable 401k then leave it with the Dell plan (yes it su-ks)
with any Roth 401k money then I think the 5 year rule applies
With the traditional 401k money if you don't need it until 59 and 1/2 then rollover to IRA would make sense otherwise leave it in the Dell 401k and avoid 10% penalty
I have asked this same question, I spoke with my fidelity Rep & he told me you can tap either the Roth Portion, or the pretax portion, or both. You should have the option to take just your Pre-tax & not touch the Roth portion.
I rolled mine over to fidelity regular/retail accounts. You need to open (or have) a ROTH IRA and a Rollover IRA. If you don't; just create the accounts.
When you do the rollover; the funds from each "bucket" will go to the appropriate account (you select the accounts when doing the rollover).
Good luck
So I did retire from Dell in the year I turned 55. I used the rule of 55 to withdraw money over the entire last year. The withdrawals came from both my trad 401k and Roth 4O1k. When going through the withdrawal process I was just asked how much to pull and Netbenefits figured out the rest
Move to vanguard admiral fund as a rollover. So easy.
As for 401K non-Roth, here's my experience. I had money in five different "funds". When I left I decided to move half my money. They took out the amount of money, spread out across all five funds. I could not sell out of one specific fund. It's per the rules of the Plan, not Fidelity that set these parameters.
Good luck and you will be in a better place now, even if doesn't seem like it at the moment.
I’ve started withdrawals without Dell help. Always contact Fidelity directly. If Fidelity misdirects, they will accept fault. I’m not sure what the responsibility of the AI bots at Dell are responsible for.
Talk with Fidelity about this. Do not talk to Dell about this matter, the folks on the other side of the phone are inept.
I strongly urge you to learn how the basics of a 401k works and what it is. Get a financial advisor asap. At 55 and not having a well documented retirement plan is a recipe for financial disaster. After learning the basics, get a tax attorney and accountant to get a plan together now for RMDs or you'll burn through your savings and get ki-led on taxes every year. You need to control your retirement income tax bracket, the RMDs and identify strategic donations and contributions to offset the ever increasing tax rates.
As long as you leave the money in those exact account accounts, you should be able to withdraw.
If you put it in a new IRA or different employers plan, then the rule of 55 no longer applies.
And of course, you should check with actual professionals to be sure.
You can absolutely use the rule of 55; I verified with the people contracted by Dell (forgot their name). There is absolutely no reason to roll it over to another brokerage account. If you decide to continue to work, I would just open a new 401k with a new company.
I rolled all mine over to my own Roth and Contributory IRA accounts. I worked with a Fidelity Advisory. I had money there already from prior positions. No fees if it goes to the same type of account.
@a6 I agree with the lack of choices, but if I do that I cannot use the Rule of 55 to withdraw funds without the 10% penalty until I am 59 1/2. I am looking to see if someone who has both pretax/Roth now with Dell after retirement can tell me if they have options to take money out of both.
@a4 I asked two different folks at Fidelity and got two different answers. And the SPD doesn't say.
You can roll it over to a Fidelity IRA or any financial institutions IRA without any penalty. I’d highly recommend do it as fund choices in Dell 401k su-k.
That's an excellent question for a financial person. Probably one who works at Fidelity.