Thread regarding AT&T layoffs

I cut a very large check to the state and federal even after they withheld 25% right up front. Roll it over somewhere you can borrow it instead.

I took a loan against my 401k in a stagnant market (low risk for missed gains) so I could delete some 6%+ interest rate student loans.

Totally worth it for that situation.

But that only works when the stars align and you know you wont be fired anytime soon.

In 2023 AT&T I would NEVER EVER EVER take a loan against my 401k. the odds that you get shitcanned in 6months to a year over bullsh-t today are way too high, and you dont want to have to repay that loan all at once.

Plus we're in a very inflationary market, you want your money growing with the market rn. If you think its about to take a huge dip tho, could also work out in your favor!

If you are 59 1/2 you can roll 100% of your 401K funds into a rollover-IRA before you leave the company. No fee to do it. I did it. Of course, they keep putting matching funds into my 401K, so periodically I have to call Fidelity and move it over. That's okay because I can do anything I want to with my money including options trading which I couldn't do in the 401K plan. I don't want AT&T anywhere near my retirement money and I sure as he-l don't want AT&T getting any more kickbacks from Fidelity when they manage my money. Now AT&T doesn't get squat. Now I just have to get my deferred compensation money out before this hellhole of a company goes tilt.

“How did it go?!”

Like a tu-d in the punch bowl, that pretty much sums it up. Only drink from it in dire circumstances because nothing good comes from it until you are retired.

If you had taken out money from 401k in 2020, it was without any penalties and tax. It was possible because of covid-19 relief. Up to 100k tax/penalty free.

If you had taken out money from 401k in 2020, it was without any penalties and tax. It was possible because of covid-19 relief.

Yes, many people have taken money from their 401K. I'm sure it was a wonderful experience. Especially if they weren't retirement age and paid massive amounts of extra taxes.

I did take a loan to pay off a partner's high interest CCs. I paid the loan back quickly (I think it was a 4 year loan and I paid it back in a little over a year). It was not a big loan and probably around 15% of my 401k balance at the time. That being said, what others have said is true, it's not the best thing because you are taking money out that could be making money. That was the incentive for me to put it back into the account quickly. It should be a last resort, but it is better than an early withdrawal because of tax implications and the penalty.

Two things I DID NOT do in my 41 years at AT&T: A second mortgage and borrow from or tap my 401k. Now retired, mortgage free, financially set, 5 vacations a year and fishing all the time.

you can take a loan on your 401K

I forgot to mention a 401K loan should be a last option desperation loan. If you don't meet the age requirements and leave the services of the company (voluntarily or not) you need to pay it back before the next tax day or it'll be considered a distribution and subject to the early withdrawal penalty of 10%.

There aren't really that many variables.

Really? How old is the poster? Years of service/contribution? How much is he needing/wanting? How quickly is he needing money? Is this an emergency, or just wanting it for something that could be better 'financed' somewhere else? Has poster gotten any job notifications and maybe will be offboarded in 6 months--18-24 months?-- making a withdrawal moot and not even worth the bother since it can be rolled?

Still very inadvisable, but sometimes people have very few options for their circumstances.

Roll it all over to a reputable, private investment firm. Sure, they take their fees, but their job is to make you money. I did it years ago and I don't regret it.

Bank I meant. Sorry.

I am in retirement at age 63. I take a monthly second pension as I call it out of Fidelity each month. It is automatic and they handle the federal and state taxes for me. My deposits are in my back account the first of each month. I love it.

Take the money, go to Atlantic City, win big, come back and put the money back before they know it was gone.

Too many variables for advice to be given here.

LOL. There aren't really that many variables.

I'm thinking about taking money from my 401k early but I have heard some horror stories. What do you guys think?

It depends on your age and what it's for.

If you're 59.5 then no penalties and just gotta pay taxes on the tax deferred 401K portion of your 401K. If you're taking money out of the Roth portion of your 401K then no taxes.

If you leave the company (layoff or quit) in the year you turn 55 then there's no early withdrawal penalty. You just have to pay taxes on the tax deferred portions you take out.

If you're not 55 or 59.5 you can take a loan on your 401K (first home or hardship) but it ki-ls the growth potential. You'll only pay interest to yourself but if the stock market picks up you'll likely miss out on larger growth.

If you don't meet the above requirements then you pay the 10% penalty + your current income bracket so we're talking a 30% hit on withdrawals.

“ Modified rule of 75... 50 yrs old / 25 years of service.....can I keep insurance thru att“

What are we talking about? When you leave/ retire/ get laid off? Health insurance?

There is no subsidy for pre Medicare health insurance for management any longer.

You can pay full price (no subsidy).

You’d probably do just as well on the open market.

I’m 53, been here 25 plus years.I took a couple loans from 401k in my thirties, early forties.

It was a mistake. The logic of “ you’re paying yourself back” while true, is flawed.

Massive opportunity cost lost, with that money not being in there working that compound interest magic.

You should avoid if possible.

Modified rule of 75... 50 yrs old / 25 years of service.....can I keep insurance thru att

Too many variables for advice to be given here.

I would encourage you NOT to take money out of the 401k. If you need $ but don't have to have it absolutely right now, another option would be to cut back your 401k contributions to ONLY the lowest possible to still get company match. That would free up some money each month. Cut contributions back to zero (and not got any company match) only if you have to. Hopefully someone else could suggest other options that aren't going to be full of penalties and/or taxes.

Don't even think about it!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

When I was young I took money out of my 401K at a different company to put as a down payment on a house. Got taxed all to heck and back. It was absolutely not worth it. But it did get us out of my in-laws house. They were very generous and gracious - it was just time to be on our own. But we really got hit hard with taxes.

At a different point I took a loan from my 401k (not at AT&T). I was still working, and just looked at it as borrowing from me and paying me back. I missed out on potential growth, as I had borrowed that money.

So - roll-over IRA, don't touch a penny. Don't have a check cut to you. That works okay. Taking money out? You get taxed and a huge chunk is taken out. Borrowing? You miss out on growth and future you will be broke, or at least less well off, but it can work out okay so long as you can pay it back while still working at AT&T. Since we can't really count on having a job more than a few weeks out, I'm not sure about being able to pay it back.

When I was young I took money out of my 401K at a different company to put as a down payment on a house. Got taxed all to heck and back. It was absolutely not worth it. But it did get us out of my in-laws house. They were very generous and gracious - it was just time to be on our own. But we really got hit hard with taxes.

At a different point I took a loan from my 401k (not at AT&T). I was still working, and just looked at it as borrowing from me and paying me back. I missed out on potential growth, as I had borrowed that money.

So - roll-over IRA, don't touch a penny. Don't have a check cut to you. That works okay. Taking money out? You get taxed and a huge chunk is taken out. Borrowing? You miss out on growth and future you will be broke, or at least less well off.

You are allowed to take a loan without penalty as long as you pay it back.

If you take it before you are 59 1/2, you will get taxed to death. If you were to set up a roll-over IRA at Fidelity, you could do an in-service rollover of a decent chunk of your money into the rollover IRA. You could do that with any brokerage, but keeping it at Fidelity means they do not cut a check, mail it to you in the name of your brokerage (don't sign it!) and you have to mail it to your brokerage.

You could set up a rollover IRA at Fidelity. Roll maybe 10K or so into the IRA and leave it in the cash fund to get an idea of how it works. Then a few days later roll a bigger chunk over. I wouldn't do it all at once, as it takes a few days before you see it in your rollover IRA. Rolling a small amount was okay. Made me nervous not seeing it on the other side. Rolling a large amount and not seeing it for a few days would have freaked me out. Especially if you initiate a rollover on a Friday and don't see it until Tuesday.

This way, if you do get laid off and don't get severance, you will at least already have a portion in your rollover IRA, and could draw from your cash funds. Not giving advice, but a Total US Stock Market Index fund, a Total US Bond Fund and a Total International Index fund is all you need.

Don't let Fidelity mail you any checks. Don't take any money out. Just do a rollover IRA so you don't get taxed.

Definitely a risky move. Make sure you think it through!

https://main.techstaffer.blog/en-us/benefits/withdrawing-my-att-401k-ruined-my-familys-finances

You sure that is a good idea OP?

Somehow AT&T is going to figure out a way to take a chunk of it

Depends on the purpose. If you want money to blow on a vacation, probably not a good idea