Thread regarding AT&T layoffs

Hold off on SS until unemployment runs out. It only takes a couple of weeks to receive the first payment. If you don’t want unemployment and over 59 1/2 you can withdrawal from 401k rather quickly. SS also only takes a few weeks.

Be careful if you withdraw from a pension or 401k if you receive unemployment. Once you’re on unemployment those count as income sources and will affect, and in some instances, stop your unemployment benefits. Try to withdraw anything you need before getting unemployment. It may differ in your state, double check so that you don’t find yourself in a predicament. I was laid off in August, got my severance a month later, they took over 30% taxes out. I’m not retirement age so I have no idea about anything else you asked. My situation is almost the exact same as the first poster on this thread. They gave us 6 months of healthcare at cost, and prorated vacation days. My suggestion- read everything you get on surplus, print up your records (Reviews etc) because like someone else said, HR was useless, I found my own answers.

"After 55, after you retire ...one can take up to 8 withdrawals a year out of your 401k. Now your lump sum , you can’t touch til 59 1/2 Just had this meeting with a Fidelity Rep"

This makes sense, because you would roll your lump sum into an IRA and the Rule of 55 does not apply to IRAs!

In your conversation with Fidelity did you happen to find out which date date determines the segment values used to calculate your lump? I understand that we use the Nov rates and to get the current rates from nov 2020 you have to take your lump this year by 12/31. But is it the date you request/apply for the lump or is it the date they process/cut the check?

After 55, after you retire ...one can take up to 8 withdrawals a year out of your 401k. Now your lump sum , you can’t touch til 59 1/2
Just had this meeting with a Fidelity Rep

You can withdraw at 55 but you have to take equal payments out
Negative. You can do a substantially equal payment (SEP) approach at any age.
The Rule of 55.
" The IRS Rule of 55 allows an employee who is laid off, fired, or who quits a job between the ages of 55 and 59 1/2 to pull money out of their 401(k) or 403(b) plan without penalty. This applies to workers who leave their jobs anytime during or after the year of their 55th birthdays.

Of course, there is a slight catch you need to be aware of. The Rule of 55 only applies to assets in your current 401(k) or 403(b)—the one you invested in while you were at the job you leave at age 55 or older."
https://www.thebalance.com/what-is-the-rule-of-55-2894280
Can't access IRAs without penalty under this rule.

I have EFT information for withdrawals at Fidelity. If I take a withdrawal, I get it within a week. They want $20 per withdrawal, so I'm doing one, if at all. One area I'm looking into is whether to do withdrawals/rollover to a Roth, so I don't have to deal with mandatory withdrawals later on.

Start putting pressure on your lawmakers to lower the eligibility age for Medicare to 55 if you ever want to retire as the companies are already counting on that happening in the next 2 years otherwise will have several years of being screwed if not

You can withdraw at 55 but you have to take equal payments out for the next 60 months so be careful to do good math when determining that amount. Also the lump sum can be done very quickly open an IRA call Fidelity give them that account and they will have a check in your hands in 10 days. You then have 60 days to get that full amount (do not cash that check yourself) into your IRA account and deposited. You can then withdraw any additional amount you need from that fund in addition to the equal payments you set up out of your 401K. At the end of those 60 months move the rest into your IRA and get ready to file for your social security = done. Work a part time job at something you really enjoy while getting out to golf, fish, ride, etc.

Ha! Too bad they aren’t as creative in finding ways to actually make money. Their entire business plan is about cost cutting, not growth. Very sad.

In case you haven’t noticed, they are getting creative lately. The last round of layoffs saw off the books in 2 weeks, saving the company $$ in unpaid wages. But now they came up with an even better idea, they took away benefits and capped raises. There will be no more management layoffs, they will just keep hitting you in the wallet until you quit, and save on severance!

NO

OP - you are asking an impossible question, namely if your severance will sustain you until your retirement income starts. How can anyone answer that without knowing your financial situation with regard to bills, debt, etc.????

OP here. So assuming > 62, a person should be able to bridge between the day they receive notification until social security, lump sum distributions and 401K withdrawals are working. Saved vacation (if any) and severance should get you there. It would be best to leave the bonus in savings or checking as a liquid emergency fund just in case.

@akr+19FLTYBm - I'm glad you were able to land a job! I've floated my resume and absolutely understand the relief you felt after landing something. I haven't gotten too many bites.

@nis+19FLTYBm - I like the idea of filing for unemployment. I'll check how my state taxes you if you file for unemployment while taking severance, social security and 401K disbursements.

"You can roll over your 401K at 55 without penalty. Not take anything out-roll over.
You can not with drawl without penalty (unless disabled) until 59 1/2.
I know this to be true."

You're wrong....please educate yourself on "The Rule of 55" at the links below...midway down on the irs link you'll see the text i have also pasted below.

https://www.experian.com/blogs/ask-experian/what-is-the-rule-of-55/

https://www.irs.gov/taxtopics/tc558

From the irs link:
The following additional exceptions apply only to distributions from a qualified retirement plan other than an IRA:

Distributions made to you after you separated from service with your employer if the separation occurred in or after the year you reached age 55, or distributions made from a qualified governmental benefit plan, as defined in section 414(d) if you were a qualified public safety employee (federal state or local government) who separated from service in or after the year you reached age 50.

You can roll over your 401K at 55 without penalty. Not take anything out-roll over.
You can not with drawl without penalty (unless disabled) until 59 1/2.
I know this to be true.

Having gone through this, you need to wait until you are 59 1/2 to withdraw from your 401k w/o penalty.

"If you are over 50 you can immediately draw from your 401k plan without penalty."

Not sure if this is accurate. I believe it's:
If you leave or are let go in the year that you turn 55 (even if you haven't yet turned 55) you can make penalty free withdrawals from the 401K that you have with the company you left.

If you are over 50 you can immediately draw from your 401k plan without penalty. Most have sandbagged a couple weeks vacation/PTO time then mine took just a few days to roll over the pension to my Fidelity IRA account.

If you have been here several years you should have 6-12 months living expense already in your savings for an event like this.

Your post really illustrates the need for folks (everyone, especially those of us still working here) to be prepared for this type of event. The best way to do so is by paying down/ eliminating all of the consumer debt that you can, and saving a good old fashioned emergency fund of 3- 6 months of expenses that will cover mortgage/ rent, utilities, food, etc. in the event that you're laid off. It does give me some peace of mind having this in place.

• Involuntary separation in late summer 2020
• My final paycheck included 102 hours of unused vacation, so I got a very nice bump in that final check
• I delayed severance to keep my income from having 14 months of pay in 2020
  ** 6 months of severance pay was deposited into my checking account in Feb 2021 (ahead of the posted March 2021 schedule)
• Within 2 weeks off payroll, I was receiving state unemployment
• A few months after that, I started getting the federal $300 bump to unemployment
• I took my pension lump sum to be paid on Jan 1 (to get the better Nov-2020 rates) and it was deposited in my IRA on 31-Dec-2020.
• I expect to receive a pro-rated bonus this week

My last day on payroll was at the end of July 2020. My last paycheck, including unpaid vacation, came on the first payday of August. The severance lump sum was tied to when you completed a particular form, which I filled out immediately. Severance lump sum came in the first payday of September (a month after the final paycheck). I am not retirement eligible, so I can't speak to that. I can say, that I was able to squeak by with some of the COVID relief and credit cards, until I could find a new job in December.

And yes, we were only given 14 days' notice (down from 60). The HR team was not prepared at all for this shortened time frame and struggled to provide any guidance. I will never forget how AT&T treated a loyal employee of 15+ years.