Does anybody know if AT&T will offer the opportunity to receive an early pension distribution in the form of a lump sum like they did last year? I believe a letter was sent around this time to previous employees.
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If you leave your job at age 55 or older and want to access your 401(k) funds, the Rule of 55 allows you to do so without penalty. Whether you've been laid off, fired or simply quit doesn't matter—only the timing does. ... Distributions from your 401(k) are considered income and are subject to federal taxes.
- "roll pension over to 401k then use the Care Act to withdraw it from my 401k or just leave it all in the 401k. With the Care Act, you can withdraw up to 100k from 401k and divide the taxed amount over the next 3 years at 10% instead of being taxed 10% all at once..."
This isn't great advice. Unless for some reason you really needed to get a hold of that money.
The CARES act does provide for a penalty free early withdrawal from your 401K, as stated. That simply waives the 10% penalty one would normally incur for an early withdrawal from 401K (before the age of 59 1/2).
Re: "divide the taxed amount over the next 3 years at 10% instead of being taxed 10% all at once..."
Incorrect. You will be taxed at your income tax rate (which you do have up to 3 years to pay).
" It will be taxed as income and you lose a third of it.
May be you can avoid tax by rolling it into an annuity"
Roll your pension lump via direct transfer roll over into either your 401K or a new IRA to avoid taxable event.
I wouldn't use the lump to buy an annuity (I'd rather have it invested in mutual funds in that 401K or IRA), but that's a personal preference based on your risk tolerance.
I was told the cheapest and best way for my situation(Pension w/less than 4 years with AT&T) was to roll pension over to 401k then use the Care Act to withdraw it from my 401k or just leave it all in the 401k. With the Care Act, you can withdraw up to 100k from 401k and divide the taxed amount over the next 3 years at 10% instead of being taxed 10% all at once.
Some pensions offer lump sum, some don't. Ones that don't have to wait for the letter. I've calles twice regarding this
You can collect when you want, under 59 1/2 years of age you pay more in taxes.
If you are fully vested you can avail of lump sum.
Craft isn't eligible for lump sum until they satisfy MR75.
When I log into my Fidelity account, I only have one option which starts at age 55 taking the monthly pension. Maybe I have to call in for the lump sum offer?
It will be taxed as income and you lose a third of it.
May be you can avoid tax by rolling it into an annuity
Craft can take pension at anytime lump or partial as well. Fidelity can go more into detail with with you for any penalties that could be involved based on your age.
What about craft ?
After you leave you can take the lump sum (whole or partial) anytime between now and when you turn 65.
You can begin collecting your pension when you leave, there is no offer necessary