Thread regarding Walmart layoffs

Info on handling severance packages

Those of us who are affected by these cuts need to think about the big paycheck they are going to receive if the accept severance package. Consider upping your 401k contribution for that last check as well as your tax exemptions. Wal-mart will match up to 6%. Up yours to 25 or 50%. Better in your account then taken out in taxes. When you withdraw from your 401k later, you are only paying tax on the amount you are withdrawing if you are over 59 1/2, If you are under 59 1/2 you will have a 10% early withdrawal penalty, However, that is much lower than paying 25 - 40%

in taxes due to the large payout. One of our audit associates took the package, Was here for 17 years. She got hit with lots of taxes due to the large payout. Just wanted to pass along some information to help others hold on to their hard earned money. Talk to your tax advisor.

Original poster is @MDk5xNF-2Mkgc, bumped for good info.

| 2226 views | | 3 replies (last )
Post ID: @OP+PrV5jyR

3 replies (most recent on top)

  1. 401K deductions do not come out of severance lump sum payments.

  2. Lump sums are taxed at the supplemental rate.

  3. Most 401Ks for large Companies are held at large investment firms - Fidelity, Morgan Stanley, Merrill Lynch, etc. so trust should not be an issue. If it is, roll the 401K into an IRA - no penalty and you can choose your own investments.

Post ID: @1vvf+PrV5jyR

Would you rather pay the "penalty" of 25% on an "early withdrawal," or stand to lose 60% on a market correction?? Decision, decisions...

Post ID: @wkp+PrV5jyR

"Word to the wise," if you're ever laid off, you should cash out of your employer directed 401k plan... they just fired you, so why would you "trust them" with your money??

Post ID: @uez+PrV5jyR

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