I was surprised to get a letter from Allstate benefits saying they were paying my pension, since I was laid off. He said they may or may not charge all the taxes bc of the forced layoff. Will they charge the penalty for being under the retirement age? They forced me out, why should I be penalized and taxed? Anyone else experienced this yet? Did you get all your retirement money since you were forced out?
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I rolled everything over and had additional taxes taken out. If I didn't do this, I would owe alot of taxes next year. Be smart with what you are doing with your money.
I'm amazed how little people know about basic finances and how instead of actually going to the source, the taxing agencies or their former employer, they race to ask strangers on the internet.
I forgot to add, they don't bother to read the same question was asked and answered numerous times by said strangers.
https://www.irs.gov/pub/irs-pdf/p4128.pdf
You can cash out your pension just like you can your 401k and will be subject to the applicable tax codes and conditions on both. Being laid off means nothing in terms of not being taxed as your options are either cash out or roll over. Yes you were laid off to force you into such a decision but because you have the choice the fact that a c-ap company laid you off in a c-appy way does not provide an exception to tax laws and tax processes.
Allstate doesn’t decide whether you owe taxes on a pension payout. The US tax code and IRS make that decision. If you don’t want to pay tax, you’ll need to rollover the funds into an IRA or something similar (typical case). Typically you have 60 days from the date of distribution to complete the rollover. If you don’t rollover the funds into an IRA, you will pay tax on them either now or when you file your 2021 taxes.
Pension! I am talking pension. I got another position before layoff took effect. I didnt get severance. I wasnt fully vested. You vested at 3 years. I had only been back 18 months. So I didnt know I would get my pension. The benefits center said they may tax my pension or they may not bc it was a force out. So thats what I am wondering.
Are you talking severance or pension? My pension was $600,00.00, I kept $100,000.00 out. They DID NOT take all the taxes out and said I should put $20 k back for the taxes next year
I really did not pay it any attention when signing the severance. I was due to be laid off, I got another position and was able to quit a month before the layoff took effect. I asked bc when I called the benefits center, the person working and processing my claim kept saying they may not tax me and I may not be charged the penalty. So thats why I am asking. No need to be a smart azz, just answer the question or keep scrolling and thank you!! I thought you were fully vested at 3 years. I had only been back with the company 18 months. So I wasnt expecting a pension without being vested..
Did you not read your severance packet? You will be taxed if under retirement age.
Call the benefits center to discuss your options. You can take a cash lump sum (which will be taxed), get monthly disbursements, or roll the pension fund over into your own IRA. I have not gotten anything in the mail about this though.
I opened an IRA rollover account before I left after almost 24 yrs. Rollover with no tax penalty pension and 401k. If you opt to not rollover into a tax shelter and take the money they have to take taxes. What retirement age are you referring to? Social security age or Allstate retirement?
How many years with Allstate? Are you fully vested?