@rre
Yes, in the lower brackets, which is where MOST folks in this website fall, are the lowest in a long time. These will expire in a few years and, when they do, retirees who just retired will be in a higher tax situation AFTER retiring vs. before.
https://taxfoundation.org/historical-income-tax-rates-brackets/
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Taxes are at lowest levels you'll ever see in your lifetime?
Often, not so.
In retirement, many have lower income (e.g. RMD) and are in lower tax bracket than when they were employed full-time, making high salary (higher income/higher taxes).
That's why a mix of traditional (deferred tax) and Roth (pre-tax) IRAs often make most sense. Then, you can strategically draw from each to avoid higher tax brackets in retirement and minimize tax burden.
@lpb+1kNU5dbu “ You can also roll it over to a tIRA…… I wished I had thought to do instead.“
Be careful, it’s not as cut and dry as that. General tax rates may (or may not) be at their lowest ever in history does not mean that the taxation level of the Backdoor Roth conversion you are speaking to would be a beneficial one vs the tax bracket you would be in during the retirement time you withdraw the funds.
It is also generally preferable to move low balance (<$100k roughly) plans as soon as possible and consolidate with larger ones to reduce maintenance fees.
This is how people get into messy situations and require financial advisors and additional financial education.
Also, if it’s greater than $5K, or something like that, it will continue to grow by whatever small percentage each quarter. So there’s no rush if you want to keep it in the account for now and then just move it later.
You don’t “call HR,” you log into the Cash Balance Plan and you send a message through the messaging (email) function to start the process of rolling it over. You first need to call The Vanguard Group and open an account to receive the funds into.
I left and was able to transfer it to my new job’s 401K plan. You can also roll it over to a traditional IRA (not a ROTH) but then you could do a conversion to a ROTH, paying the taxes - which are at the lowest levels you will ever see in your lifetime - and allow what is left over to grow tax free until you need it. That’s what I wished I had thought to do instead.
You can roll it into an IRA if under 59 1/2, or you can take it penalty free if 59 1/2 or older. However, it also states due to the rising interest rates the lump sum will be less, but the monthly payments will be more.
YOU need to contact HR to do something with it. As posted already only under $5k will they do it automatically.
If it's 5k or less they send you a check. Above that you have more options.