Comments on: Sometimes You Have to Cash Out http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/ Just tidbits about money and finance. Fri, 30 Jul 2010 19:53:06 -0500 http://wordpress.org/?v=2.9.1 hourly 1 By: Sarah http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198999 Sarah Tue, 05 Aug 2008 20:07:43 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198999 Yeah, it's totally semantics. It seems to me that most advisors, when talking about cashing out a 401k, mean that the taxes have to be paid on it that year. (Rather than during the retirement years.) So if you moved it from the 401k to a trad IRA, you're all good on the taxes, no hit for this year, right? Yeah, it’s totally semantics. It seems to me that most advisors, when talking about cashing out a 401k, mean that the taxes have to be paid on it that year. (Rather than during the retirement years.) So if you moved it from the 401k to a trad IRA, you’re all good on the taxes, no hit for this year, right?

]]> By: mapgirl http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198923 mapgirl Mon, 04 Aug 2008 22:07:24 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198923 To me, 'cashing out' means selling all your investments. It doesn't matter if you take it out of a pre-tax account and move it to a post-tax account. Cashing out is leaving the stock or bond market for holding cash. And I had to make cash to move from one account to another. Selling off something is cashing out. Perhaps I look at this the wrong way. To me, ‘cashing out’ means selling all your investments. It doesn’t matter if you take it out of a pre-tax account and move it to a post-tax account. Cashing out is leaving the stock or bond market for holding cash. And I had to make cash to move from one account to another. Selling off something is cashing out. Perhaps I look at this the wrong way.

]]> By: Sarah http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198770 Sarah Sat, 02 Aug 2008 22:23:38 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198770 Thanks for answering! I did read the prior post, that's why I was confused about your ire over the "cash out" part. I think when the general PF advice columnists warn against a "cash out" of a 401k plan, they are talking about people who take that check from 401k and don't put it another tax-deferred savings vehicle (thus triggering a tax event for that year, whee). It sounds like what you did was not a cash-out -- it was the situation where Company A sends the check to you for you to turn over to Company B, rather than making the transfer directly for you. (Which is more common than people realize and totally within the rules for rollovers, as I understand it.) Thanks for answering! I did read the prior post, that’s why I was confused about your ire over the “cash out” part. I think when the general PF advice columnists warn against a “cash out” of a 401k plan, they are talking about people who take that check from 401k and don’t put it another tax-deferred savings vehicle (thus triggering a tax event for that year, whee). It sounds like what you did was not a cash-out — it was the situation where Company A sends the check to you for you to turn over to Company B, rather than making the transfer directly for you. (Which is more common than people realize and totally within the rules for rollovers, as I understand it.)

]]> By: mapgirl http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198756 mapgirl Sat, 02 Aug 2008 19:37:01 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198756 Hi Sarah, If you read the link to my previous post on how I actually did the account transfer, I DID move the old 401k funds from Crappy Plan Administrator A to Another Company B in a traditional IRA account I already had. I had two reps from each company talk directly to one another. Hi Sarah,

If you read the link to my previous post on how I actually did the account transfer, I DID move the old 401k funds from Crappy Plan Administrator A to Another Company B in a traditional IRA account I already had. I had two reps from each company talk directly to one another.

]]> By: Sarah http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198680 Sarah Fri, 01 Aug 2008 22:40:43 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198680 Also, even though it was contrary to standard advice, it sounds like using the earlier 401k to fund a big step upward in your career was a smart move. So good for you. Also, even though it was contrary to standard advice, it sounds like using the earlier 401k to fund a big step upward in your career was a smart move. So good for you.

]]> By: Sarah http://www.mapgirl.net/mfc/2008/07/30/sometimes-you-have-to-cash-out/comment-page-1/#comment-198679 Sarah Fri, 01 Aug 2008 22:39:01 +0000 http://www.mapgirl.net/mfc/?p=1193#comment-198679 Perhaps I am being dense, but I don't totally understand what you did here with the 401k cashout/rollover. It sounds like what you did was get a check from the first 401k plan and moved it into another investment vehicle (the Berkshire shares). Why didn't you take the check from the first 401k plan and apply it to an IRA with the company of your own choosing? To my understanding that would be the same as a penalty-free rollover, and you wouldn't have to had use whatever crappy options your previous employer offered. Can you clarify? Perhaps I am being dense, but I don’t totally understand what you did here with the 401k cashout/rollover. It sounds like what you did was get a check from the first 401k plan and moved it into another investment vehicle (the Berkshire shares). Why didn’t you take the check from the first 401k plan and apply it to an IRA with the company of your own choosing? To my understanding that would be the same as a penalty-free rollover, and you wouldn’t have to had use whatever crappy options your previous employer offered. Can you clarify?

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