I recently changed jobs and I have to make a choice regarding the balance in my 457b plan. This is a non-governmental plan and I cannot roll it over into another 457b (my new job has a 457b but it is governmental), and cannot roll it over into an IRA. I'm in my mid-fifties and may retire in about 5 years. This is a substantial sum, and I also have roughly equivalent amounts in a 403b and a taxable account.
The choices I have are:
1) Do nothing and the plan will start annual distributions over the next 5 years. This is not a good option for me because I will still be working and the tax bill will be high.
2) Take a lump sum distribution. Also not a good option for the same reason.
3) Take annual distributions beginning as late as the year I turn 73, and over as along as 15 years. This seems to be the most sensible option for me, because there enough in my other accounts for living expenses and I can always do Roth conversions from my 403b as needed.
Now, I do have option of a one time postponement of my distribution date.
One consideration is that the funds in the 457b are subject to creditors of the employer. Now the employer is a large hospital conglomerate (>100 hospitals) with excellent bond ratings (Aa3 for Moody's and AA- by Fitch), so it's unlikely to go under. Nevertheless, it is a consideration and I could choose an election time say when I am 65, and then reassess and use my one time postponement to 73. The downside is that this is one more thing to take care of 10 years from now, and there's a non-zero chance I'll forget to do so.
Any other considerations I may have missed?
Thanks!
Mud
The choices I have are:
1) Do nothing and the plan will start annual distributions over the next 5 years. This is not a good option for me because I will still be working and the tax bill will be high.
2) Take a lump sum distribution. Also not a good option for the same reason.
3) Take annual distributions beginning as late as the year I turn 73, and over as along as 15 years. This seems to be the most sensible option for me, because there enough in my other accounts for living expenses and I can always do Roth conversions from my 403b as needed.
Now, I do have option of a one time postponement of my distribution date.
One consideration is that the funds in the 457b are subject to creditors of the employer. Now the employer is a large hospital conglomerate (>100 hospitals) with excellent bond ratings (Aa3 for Moody's and AA- by Fitch), so it's unlikely to go under. Nevertheless, it is a consideration and I could choose an election time say when I am 65, and then reassess and use my one time postponement to 73. The downside is that this is one more thing to take care of 10 years from now, and there's a non-zero chance I'll forget to do so.
Any other considerations I may have missed?
Thanks!
Mud
Statistics: Posted by mudfud — Sun Oct 13, 2024 11:28 pm — Replies 0 — Views 19