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Withdrawing fromr IRA

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mpadilla
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Withdrawing fromr IRA  Reply with quote  

Hi all,

I have a rollover IRA from an old job with about 1K in there. I would like to just withdraw the funds and put it in savings or daughters 529. I currently have about 10k with current employer and another 401k from previous employer with about 15K. It is not much but i am 28 and just starting to really sit and focus on all of this. I guess i could just rollover the IRA to the other plan but If i were to withdraw the 1K how much of a penalty would I face and are there better ways around this?

Thanks.
Post Mon Jan 22, 2018 6:55 pm
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oldguy
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You'll pay a $100 under-59.5 penalty, and guessing at your tax rates, about $150 for Fed tax, and about $50 for State tax. So you'll net about $700.

Better ways? Your $26,000 left in a generic 11%/yr fund, will be about $735,000 when you are age 60. Based on your success so far, you must be adding over $5000/yr to your fund. That, again using an 11%/yr fund, will add about $1,400,000 to your $735,000 - ie, $2,135,000 at 60.

Here's what I did. Whenever I changed jobs, I rolled my 401k into my Trad IRA. And when I retired I rolled the final fund into my IRA. So that puts all of my money into one account (altho in various investments). IMO, it would have been hard to manage multiple 'dead' accounts decades later. Eg, I changed jobs in 1966 - that company doesn't even exist anymore. 32 years from now you will barely remember the company that holds your $15,000.

So that's my advice - ie, don't start whittling away at your $2,135,000 at the young age of 28. And don't leave a string of old 401k's behind as you move thru life, put your 2 'dead' IRA/401k's in a fund at a no-load fund company and let them grow for about 32 years.
Post Mon Jan 22, 2018 8:22 pm
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Carmen W
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I guess you withdraw the amount partially and you don’t have to pay any surcharge amount. What say if you have such option then you must take advantage of it. Please let me know if essay uk review was helpful for you.
Post Thu Jul 12, 2018 6:30 am
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