401k — and how to access money
I’m retired and on Social Security, I have no debt. Our house is paid for, and my sug-other pays all utilities, so I have no bills. I have $200,000 in my 401(k) and I plan on using that for TRAVEL. I usually travel with friends because Steve plans on work until he’s 70. Should I take half out to guarantee that I will have at least have $100,000 to travel?
Terry Says
NO, no no!! You would be making a terrible mistake.
What you SHOULD do is an immediate rollover to an IRA. Please read this for instructions on how to move hte money directly to an IRA at Fidelity or Vanguard.
https://www.terrysavage.com/rollover-now/
When you have rolled into your IRA, you can instruct them to leave half the money in a money market mutual fund. Then when you need money, you can take as much as you need, with no penalty.
BUT remember, every time you take a withdrawal, you must pay taxes. So be sure to ask them to withhold at least 20% from each withdrawal.
And also remember, that every withdrawal adds to your income — and thus could increase your Medicare Part B and Part D premiums! I suggest you consult with you tax advisor to see how close you are to moving into a higher Medicare premium level, based on your intended withdrawals.
