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07-02-2009 at 8:15 AM
Stephiehun
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401k Distribution Question

My company was recently "sold" for lack of a better term to another.  I just got a notice about what to do with my 401k - it's only about $3500.  (Yes, I'm bulking up the new one.) 

I can either roll that into an IRA with my old company or take it in a lump sum distribution.  Any input?  It looks like I'd take a 20% and 10% deduction for the distribution.  I was thinking about doing that and paying off a credit card, which would be a huge help to us.  $3500 isn't that much in the grand scheme of things for retirement (I'm only 29), and I can increase my contributions with my new company.

I will probably talk to a CPA friend as well, but I always appreciate this board's input.



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07-02-2009 at 8:16 AM
rdcrlyhr
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Don't take the lump sum distribution - it's never a good idea.  Roll the money over into an IRA.
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07-02-2009 at 8:17 AM
kris216
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Paying a withdrawal penalty is never a good idea.  Roll it into an IRA and cut your spending to help pay off the CC debt.  If the CC is only a couple thousand, it shouldn't take long. 
 
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07-02-2009 at 8:18 AM
cittycat
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I don't really know all that much, but I would just roll it over.  I wouldn't want to take the tax hit. Plus it'd be nice to have some money in your new IRA, esp if this is your only retirement savings so far. 
 
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07-02-2009 at 8:19 AM
SCM1011
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definitely roll it over
 
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07-02-2009 at 8:25 AM
augs06
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kris216:
Paying a withdrawal penalty is never a good idea.  Roll it into an IRA and cut your spending to help pay off the CC debt.  If the CC is only a couple thousand, it shouldn't take long. 

This.

 
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07-02-2009 at 8:31 AM
Stephiehun
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Stephiehun is online. Last active: 11-07-2009, 5:19 PMSilver
Thanks!  I'll look closely at the paperwork and see what I need to do to roll it over.



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