I am less than 50s and I have pension plan with $X vested. If I decide to resign or get surplused, what happens to that amount? Will it stay with Fidelity and can I start getting monthly pension checks if I want to cash out or do I have to wait till 65?
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Call Fidelity. They can answer most if not all of your questions. No way you should depend on a message board for one of the most important financial decisions in your life. Have your questions ready.
Do all regions have Rule of 55 of just you?
It's an IRS rule.
@a9 You are giving bad advice. Do you realize different regions have different plans?
@cz Do all regions have Rule of 55 of just you?
As early as the year you turn 55, and leave the company, you can take penalty-free distributions from your 401k. It’s called the Rule of 55. You’ll pay taxes if you take from any tax-deferred buckets. You’ll can also roll your lump sum pension (tax-deferred) into the 401k so you have a greater balance to take distributions to bridge you to 59 1/2 when you can access your IRA. The benefit is that you have your cash and ATT can’t sell off an annuity to some insurance company and you can have availability to that pension pre-59 1/2. If you roll it into an IRA, you have to wait until 59 1/2 to access. The drawback is the investment choices are fewer in the 401k vs IRA.
Similar to the 72T but that allows you to use other retirement vehicles. 72T uses SEPP and must be used for 5 years or 59 1/2. Call Fidelity or a CFP, they’ll confirm.
Any money from the pension that you can roll into an IRA that you manage, you will be better off. The same thing with your 401K.
Since the OP is under 50 yes the lump sum AND 401K should be rolled into an IRA.
For others at 55 years or older: It depends.
Incorrect, you don’t know what you’re talking about, and should stop talking.
Well at least you're anonymous when you're spouting nonsense.
“ It applies to pensions as well.“
Incorrect, you don’t know what you’re talking about, and should stop talking.
Yes 59.5 is the standard age for penalty-free 401(k) withdrawals, but the minimum age for pension withdrawals varies, with the U.S. Normal Minimum Pension Age (NMPA) increasing to 57 in 2028. While 59½ applies to accessing funds from employer-sponsored 401(k) plans, pensions often have different rules and minimum ages that can be as low as 55.
We have many different pension plans here at T. People need to know which plan they fall under and review the SPD.
You’re thinking about the 401k.
It applies to pensions as well. Verify with your financial planner or use a quality Internet search engine.
If I decide to resign or get surplused, what happens to that amount? Will it stay with Fidelity and can I start getting monthly pension checks if I want to cash out or do I have to wait till 65?
If you leave it with Fidelity it'll earn peanuts.
If you take the pension annuity prior to 59 1/2 years old you will incur 10% early withdrawal penalty from the IRS and regular income tax.
If you take the pension lump sum directly into your name you will be assessed the 10% early withdrawal fee and taxes on that lump sum.
You should roll it into a traditional IRA and invest it properly based on age and how close you are to retirement.
If you need to live on the pension lump sum once it's transferred to an IRA, you can exercise the IRS 72T rule aka Substantially Equal Periodic Payments. I know Fidelity can calculate the amount for you if your IRA you roll it to is with them. The amountust be withdrawn for 5 years or until 59 1/2 whichever is longer.
Research and DIY or hire a financial planner.
OP, now head over to the Fidelity website and ask them about upcoming layoff news from AT&T.
Most smart financial people will advise you to take the pension in a lump sum, with a direct transfer roll over to an IRA…thus avoiding any taxable event.
“ 59 1/2 to take from your pension without penalty.”
You’re thinking about the 401k.
Reading these responses, it is astounding how illiterate some of you are about your own finances.
@ag - great advice!!
OP:
- Figure out what the plan(s) allow you to do.
2a. If you’re a DIYer when comes to financial planning, take the actions you feel best about.
2b. If not, depending on the amount, seek out professional help as described by ag (also, Fidelity does offer free access to financial help which I have found helpful but you just need to keep in mind what their incentives are).
Good Luck!
FFS. Meet with a financial advisor.
Just take lump sum.
The tax will not be as bad as you think.
You really need to speak to a financial planner. Has different plans for the different companies that’s bought out over the years. You need to start by reading your pension plan description in Fidelity. It does stay with Fidelity, but the rules of what you can do with it depend on the plan and your age and your years of service. As far as tax repercussions and advantages it’s best to speak with a financial planner about that. You can use them at low cost through AT&T with financial engines or find an independent one. It really is a personal decision on what you think would work best for you. I think that would be the smartest advice. Don’t take just the Here cause everyone’s situation and future plans and thoughts on what will happen if you pass in any spouse, you have that you would want to receive that money. It’s impacts a lot more in the long run.
What about 60 and 30 yrs
It stays with Fidelity until you pull from it. If you take lump sum, Fidelity will manage it. If you take monthly payments, it gets transferred to a new company to manage the distribution.
Any money from the pension that you can roll into an IRA that you manage, you will be better off. The same thing with your 401K. There are a lot more investment options for the money outside the AT&T managed options.
59 1/2 to take from your pension without penalty.
Roll it over in an IRA that way you dont pay taxes and have contol of your money. Dont leave your money in this company they will default on the pention.