Going to leave shortly and over 55. I plan on using the 401k to bridge until 59.5. Question is how is this done? Are most folks leaving it with Vouya and making annual pulls?
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Totally agree that you urgently need to talk with E&Y. I only talked with them once in thirty years! My bad …
If you are single, you can get about $50k out per year and stay in the 12% tax bracket.
One thing to consider. You can extract XOM dividends from the Voya account without penalty. You can only do this in an employer based account. What I do is move my money 100% into XOM a couple days before the ex-dividend, and then move it back the day after.
"The rule of 55" is an IRS rule that allows you to avoid paying the 10% early withdrawal penalty on 401K... You need to leave your job during or after the calendar year you turn 55.
The rule applies regardless of the terms of your separation, so you can take advantage of it whether you’re laid off or decide to retire early.
The rules are very specific, so you need to make sure you’re following them before you begin taking money out of your retirement account... Many seek professional advice before they do this.
So many people in this thread planning to leave. Crazy.
If you are a retiree between 55 and 59-1/2 and leave funds in Voya, then there is no early withdrawl penalty since it is the company 401K plan. If you roll it over into an external IRA, then there is a 10% penalty prior to 59-1/2. EM limits withdrawals to one non-Roth distribution and one Roth distribution per calendar year.
Google “rule of 55”
Yep you can leave it with Voya, but like the other poster said, you will have taxes to pay if you are under 59.5 and take funds out.
I think you should be VERY careful in how you proceed. Since you are less than 59 1/2, I would think the tax consequences might be very different if you leave it in Voya versus rolling it someplace else like an IRA. I would think any withdrawals from an IRA will include the 10% before 59 1/2 withdrawal penalty. For your circumstance, I believe withdrawals directly from the XOM Savings Plan (401K) might not include the 10% penalty.
If you haven't already talked to one of the E&Y Financial Advisors that XOM provides free of charge about this, I would think you should. I also hope you took the late career financial planning class they offered.
This might be an unpopular opinion but I think that free financial consultations with the E&Y advisors was a pretty good XOM perk (and the Late Career Financial Planning class as well).
I am rolling over 401k and pension to outside. Plan to work again after short break - in the meantime Love you e lean and have personal savings to cover.