Early pension???

Question

the company i work for sold and the pension is going to be distributed accordingly, my question is at 34 what are my options at this point? Can I take this money and be taxed for it or do I have to roll it into something?

Answer 1

PLEASE DO NOT LISTEN to the other answers!!!  The first thing you need to do is find out your options.  Call the administator of the Pension Plan or your HR person - they will have the info. to the administrator.  

Ask them what your options are - do not assume that the company will let you roll it over.  Pensions are not automatically able to be rolled over.  The PLAN itself must allow it.  Meaning that when the plan was started the company chooses to add that option to the plan.  

  If the plan allows you to rollover the money to an IRA -then this is usually the best choice to reduce your tax liability.  You can cash it out at 34 if the plan allows it.

Good luck,

VP

Answer 2

Take your choice. Either is legal, and if you are not worried about future ,take money and have a good time. The taxes are going to be very high

Answer 3

I agreed with the previous answer.  The trickiest part is that if the money passed through your hands, you'll have to come up with the withheld amount for the new account.  The withholding is an anticipation of tax and penalty on the distribution.  If you put the entire amount into another retirement account, you will receive the withheld amount next year when you filed your tax return.

Your current pension custodian may be able to open another account for you and just roll-over the money directly.  Or you can open an account of your own at another institution, and ask the new institution to request the money from your current pension custodian.  

Best wishes.

Answer 4

You will need to complete a rollover of the pension distribution into an IRA. This must be done within 60 days. The distribution will be treated as income received during the year if you fail to complete the rollover. If your employer offers to complete the rollover for you, you may want to accept the offer. Otherwise, 20% withholding may be withheld, and you would have to make up the withheld 20% from your other sources of money when you complete the rollover. You'd get the withheld 20% back later.