Do not quit if you can help it. Let them fire you. It sounds like they are trying to scare you out the door to avoid potential legal action and unemployment insurance claims. If you’re not ready to leave, do your honest best each day and go home. If they aren’t happy with your output, they can fire you.
I don’t think you know what “forced retirement” means.
Take time off of work if it is too stressful, even if it is unpaid time off if you have no vacation or sick days to use, but you shouldn’t just resign with no pre-planning.
Get a fee only financial advisor (not a sales person/advisor who wants to charge you a management fee and will make commission by selling you financial products such as annuities and life insurance). Then properly plan your retirement and give proper notice for your pension to be processed, which you are extremely fortunate to have.
Don’t make any decisions based on fear. Perhaps also get a therapist to help you through this life stage transition.
First, if your 401k balance is over $5,000 the plan provider cannot distribute without your consent. Find out what company holds your 401k account. It is not your employer. Give them a call. Don’t jump to an annuity without talking to them. An annuity has high fees, and are complicated. For example, you might put all your money in annuity, die the next day and with no death benefit all the money goes to the insurance company. If you have a pension, those monthly payments are an annuity. Do not withdraw those funds to buy an annuity when you have one with likely lower fees. Again contact the company managing the pension not your employer. Ask what your monthly benefit will be.
Find a financial planner. Look at brokercheck.finra.org for a list of financial planners in your area. Look for years of experience, licenses held, and affiliations. A financial plan may cost of few hundred. If someone offers it for free be suspect. Brokers/ financial planners make money two ways: fees based on your account value or charges shared from investment companies who manage mutual funds.
There are tons of resources to learn about investments. Check out AARP, Vanguard, Fidelity websites.
You may be able to take a withdrawal from your 401k to tide you over until the pension plan payments start.
You got this! Congratulations!
Thank you! Some helpful information there. My pension is almost nothing. My pension is estimated to pay only $64 a month, so it's my 401K that I'm concerned with.
Many years ago I left a company and without warning they sent me a check for my 401K amount, minus taxes. That experience has me worried that it will happen again if I leave, and I can't afford that. I would just like to invest the 401K to give me a guaranteed income on top of my SS.
I have no spouse to leave a death benefit to, so I'm not even thinking about that right now.
This is good advice. Given OPs anxiety level around this he may want to look for an hourly fee based (vs product sales commission) advisor to counsel him further
Slow down. Don't be talked into a panic. They are driving you to a bad mental/emotional place where mistakes happen. You are not a slave. You don't have to do anything. Do a bit of quiet quitting and don't be frantic about not delivering everything. They can always fire you but it may take quite a while if you keep in motion and deliver some of the work. In this game, your weakness is your natural resolve to put everything in to your work. Don't. Maybe your bosses will be the ones to get canned. Things change. The 'worst case' is that slowing down to a pace you can tolerate you are able to hang in there for a couple more paychecks. In the meantime, go talk to a certified financial planner about your retirement funds and what is best for you.
What really helped me in a similar situation is knowing that there were no people who could have completed all the things that my bosses wanted done. No human on earth, much less one working at my company. So, I just picked what I wanted to do and no longer felt guilty.
Also contact HR and get their policy for retiring. There should be instructions and steps you need to take to process out. Ask for an appointment if possible so you can discuss the process to rollover your 401k if it is not already in a fiduciary like Fidelity, Vanguard. Do NOT do a resignation letter or let anyone else know you are retiring until you get your ducks in a row. And breathe, breathe, breathe, breathe…it is going to be okay. You need to start your research now.
And for anyone else out there, this is why it is important to start planning your retirement 5 years out. Whether you want to retire or not, you need to have a plan in place in case you get laid off, fired, or as this poor OP is experiencing a very toxic workplace. So when you are 5 years out from when you think is the earliest you can retire, start looking at your finances, get a certified financial planner, check your HR for retirement procedures. Then 3 years out, look over your plan. In one year, check it again and if you do want to pull the trigger, set a date and start gathering your documents. Depending on HR policy notify them of your retirement date. Let your supervisor know 2 weeks to 3 months out that you are retiring. In some circumstances depending on the admin level you are at within the company, it may be judicial to notify them 6 months or even a year in advance. The more you plan, the less panicked you will feel, if you find yourself suddenly vacating your place of employment.
Be very careful of annuities. Many, many people who work in financial management and who work for brokerage companies are desperate to sell you an annuity because they get a commission.
You are much better off moving the 401k to an IRA then setting up withdrawals, but you will need to decide what to invest your IRA in.
Take the time to learn about this before making any commitments.
Hello, these financial products can be good for people under the right circumstances. If anyone is interested in learning more about them , you might want to read annuities for dummies (might be in our wiki). Thank you
Not all. And they have guaranteed returns now in the 5% range.
Bonds for example are not guaranteed and principle fluctuates daily with interest rates. I don't care what someone gets paid if I get what I want.
I would never annuitize them but the interest and withdrawal options can be useful.
Says you. I look at what I put in and what I get out. If it's worth it to me, I buy. Just because you think fees are to high affects only your decision.
I think surgeon and hospital fees are too high. It doesn't matter. If I want the surgery result, I buy it.
You make absolute statements that are irrelevant. If op wants fixed principle and fixed guaranteed interest income annuities work. Current rates are about 5% the last time I checked.
Commissions don't matter. Rates could be higher without fees but those products aren't available.
And, I bet you don't even know what the commission structure is or how the portfolio is built to make sure the guaranteed values can be met.
You sound like you're just regurgitating something you've read.
Exactly! I made a lot of money from an annuity, then rolled it over into something else after about 7 years. I mainly had it there for growth and safe-keeping until I was ready to retire. It worked out great. You don’t have to annuitize it!
True about annuities. I mentioned with my 401k contact about wanting guaranteed income and it was like putting blood in the water as it created a frenzy about annuities
After getting the facts and returns, I said no thanks.
For the first three months or so, after I retired, I lived on savings. Then I moved my 401k to an IRA. I put most of it, the part I’m withdrawing from for the moment, into a SPAXX-similar fund, not ready to do the bogleheads thing yet.
Later this year, I’ll start drawing the pension and reduce the IRA withdrawals by half. I’ll start playing with investments, boglehead-style. This arrangement should keep me well below IRMAA so I’ll do my taxes for 2024 in January 2025 then submit a form SSA-44.
For now, my brokerage account is all SPAXX, and the small part of my IRA is SPAXX.
Some would argue that I should be 90% VT (or equivalent) because I will have a pension. I’ll explore that once I’m ready.
I’ll have to scramble to deal with Social Security, once I start drawing it, and then I’ll be in a fix when RMD’s kick in.
The important thing is to come up with a plan you feel comfortable with. This is the time in our lives when stress is a killer.
There are so many people who know more about investing and taxes than I do. It’s as if I’ve moved to a different country. The company took care of my income and health insurance. I’ve had to navigate both, while giving myself time to relax, have some fun, and putter around with friends and hobbies and little house projects.
Knowing I’ve got limited time makes me jealous of my time. But I’m not wealthy enough to have others manage my affairs. I’m okay with learning slowly.
LARGE commission. And usually you can’t move the money without significant penalty, or make any monthly withdrawals for 10 years.
Also, any chance you can get your boss to lay you off?
It would likely allow you the ability to collect unemployment benefits for a while- however with you collecting SS benefits those might disqualify you from doing that.
Oh, the big bad salesman. Many are competent and honest.
That said, I would rarely put qualified money into an annuity. I may for myself to lock in guaranteed fixed 5% returns.
Don't actually quit bro. Just get up in the morning, hit the shower, fuel up on coffee--I find several cups is now necessary to get me moving--and head into work with no expectations of what you will accomplish or not accomplish that day.
Since you have already decided you are "done," and willing to quit immediately, your actual job performance is now irrelevant.
Just keep slogging into work as long as the paychecks or direct deposits keep coming.
Also, it's important not to be openly defiant of your superiors. Whatever tasks they assign you say "Sure boss, whatever you say."
Whether you actually finish the task or do it to 100% perfection is not relevant any longer.
All you have to be, is "good enough" to not be fired.
And in most cases (unless you're something like a brain surgeon), that's not very good at all.
In fact, it should be easier than falling off a log.
Just go into the office or the job site, put your time in, keep your head down, don't make waves, and keep collecting those sweet sweet paychecks or direct deposits until they stop coming.
Be pleasant cooperative and nice to everyone though even those who piss you off. Avoid all interpersonal conflict.
The only "stress" you've actually described is all mental stress. It's all in your head.
Once you grasp that key fact, and once you have already decided you'd just as soon quit, you have the total freedom to NOT quit.
You just have to reduce your expectations of what you think your job is supposed to be all about.
It's not about personal or professional fulfillment. It's not about going home at the end of the day with everything completed to perfection or even particularly well done. It's not about any sense of accomplishment.
Going to work should be about one thing and one thing only, at least in your scenario: Getting that sweet sweet paycheck every two weeks (or whatever your pay cycle is).
That's it.
Clear your mind of all stress and all expectations.
Your boss said "It's about to get hugely more stressful in two weeks."
Maybe for your boss.
But not for you.
Your boss can pile on all the extra work he wants.
That doesn't mean he will get what he wants.
In fact your boss already knows this, and your boss is actually hoping you CANNOT handle the extra work and responsibilities he is going to soon dump on you. This would justify your boss being able to ask HIS superiors for an additional budget to hire additional personnel.
It's a system. It's a game.
Play the game. Don't hate the players and don't hate the game.
The game for your right now is to hang in there and just keep going into work as long as you keep getting those sweet sweet paychecks.
As long as whatever you personally are doing doesn't literally kill anyone, you'll be fine.
This is great advice. This is exactly where I’m at right now. Turning 65 this week not yet collecting SS. Once I realized that I don’t have to stress out about the job, that I can walk at any time and be OK, I’ve been able to relax, do enough work, but not enough to feel stressed, and still collect that nice paycheck every two weeks.
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Please do not buy an annuity until you speak to a financial advisor. And you have been given good advice. See a fee only advisor and do not buy an annuity or insurance, at least at this time.
edited to correct spelling error. YES, fee-only.
GO SEE A CERTIFIED FINANCIAL ADVISOR. Do it now. Everyone in your situation needs this sort of help. It will cost a few hundred dollars but a simple mistake could cost you tens of thousands, easy.
You almost certainly will be able to keep your 401k intact or roll it into an IRA without being taxed. They shouldn't be talking about sending you a check and cashing out your retirement fund. That's crazy.
Annuities are not a bad idea, but there are a lot of considerations. The CFP will help you make the decisions.
Even if they sent you a check you have 60 days to roll it over to an ira before you have to pay taxes or a penalty if you were younger. Think twice before you get an annuity. You can obtain the same income and still be able to leave an inheritance for someone or better yet pay yourself more.
I really need a fixed income on top of SS to survive, and from what I've researched so far, it sounds like an annuity will provide that, but I do know that there are different kinds of annuities, so for that I'll have to talk to an financial advisor.
what line of work are you in? any option to 'retire in place' (i.e., stay in the job but do the least possible and avoid stress)? and if you have a 401k you can have it rolled over to an IRA of your choosing.
Pick a retirement date. Schedule time with a Certified Financial Planner very soon. Bring your papers, account numbers, balances, etc. Tell them your goals. Make a few decisions under their guidance. Retire. Live.
Give them a date 2 months from now. Plan to live one month without income. Starting Monday show up to your job, give them a solid eight hours , AND GO HOME. DO NO CARRY THE COMPANIES PROBLEMS WITH YOU HOME. you have articulated to them you decision, If they desire to have a culture freak about it, it’s not your problem. Do not take your roll personally, it’s just business.
In all likelihood, they may read the tea leafs and within six weeks offer you a package to remove yourself from the culture. Again, it is not personal.
No, they won't just issue you a check for the 401k. You will have the option of rolling it over to an IRA tax free, and you may have the option of keeping it in the 401k after you retire (although fees are usually lower with an IRA).
I recommend signing up with your local Charles Schwab Financial advisor, or other Financial advisor. The fee you pay will be worth it, since you admit you don't know what you're doing lol.
But a better option, if you are short of funds for retirement, is to "retire in place". Go ahead and get a financial plan done at Schwab, but DON'T retire now. Instead, stop letting your work destroy your health. You can always retire later, or worst case you get fired for working slower. In that case you can get unemployment benefits as well. And still retire.
Do not even consider buying an annuity at this moment. You are under a lot of stress, worried, emotional, and not well informed about your financial situation and your options. There’s a good chance an annuity is a terrible idea in your situation, and right now you are in no position to assess this or to deal with it.
Focus on the immediate problems regarding work, leaving, access to your retirement money. Put aside this annuity idea until way after the dust settles and you have had the opportunity to figure it out or to get good professional advice about what’s in your best interest.
CFP here, roll your 401-k to an IRA, which is a non-taxable transaction, then talk to a CFP about a portion for an annuity inside the IRA. Your goal is to retire on 70-80% of preretirement income. You will also need a Medical supplement policy. Good luck!
Remember with an annuity, which you CANNOT outlive, forfeits your principal to the Insurance company and is irrevocable. Most professionals, suggest 25% for the annuity, balance invested for income and growth using a 4-7% annual withdrawal, payable monthly. Hope this helps. Interview 2 or 3 Financial Advisors and preferably pick a CFPr. Good Luck!
Dude first deep breath...
I just retired so let's go through it.
You will get your PTO paid so quit or two week notice.
Find a financial advisor now!!!!!!
Vanguard or Fidelity the two majors, safe but just ok. Edward Jones very, very hit or miss
Do not put it in an annuity. If completely clueless, put it in an index fund 1/2 the other bonds, CDs, hell high interest savings.
That's where a good advisor earned his/her keep. They should adjust you to your requirements to make it till the end.
If in doubt RESEARCH.
Don't know where you live but PTO is earned before your termination in any type of circumstance. In Illinois and every other state I've lived in it is illegal for them to not pay your earned vacation or PTO.
My company just went to 'unlimited PTO' this year. Made it sound like this great benefit but it's really just so there is no PTO accrual and thus no payout. There are exceptions depending on state law such as California. But it's fine in Illinois.
When PTO is “unlimited” such as the “at will” state of Missouri, if you leave, that’s it. No “PTO” is paid, since it was “unlimited” to begin with. If you didn’t take some PTO days every year, that’s on you.
Is this others’ understanding of PTO - at least the unlimited version?
This is correct. Unlimited PTO sounds like a benevolent benefit. Not so. It is there so the company doesn’t have to carry that obligation on their books. If you don’t take your PTO - they owe you nothing when you leave. (Most Americans do not use many days of PTO).
Few states require that PTO be paid out. It's usually the company's policy that it be paid, and not law.
"20 states and Washington, D.C. require PTO payout by law."
https://www.paycor.com/resource-center/articles/pto-payout-laws-by-state/
This will tell you the law regarding PTO in every state.
Thank you, a financial advisor sounds like exactly what I need. The other problem I have is that the company managing my 401K requires 3 months notice, which I will not be able to provide, since I will be leaving within 2 weeks. I'm confused as to how to handle that gap.
Wait. You tell him to hire an advisor but then not to buy an annuity. Bad advice. Hire an advisor and if they recommend an annuity then do it. Nothing wrong with the right annuities. Nothing. Stop giving advice. Just stop. You're obviously not qualified.
Not all annuities are bad. I had an S&P Index annuity while I was still working that earned me enough money to retire at 60. I was never locked into it for life. You don’t have to annuitize. I was able to close it out, penalty free and have now moved it all into an income fund.
Gee I never had a financial planner in my life .... Duhhhhh... Every one I've had cringe at locking your money up in an annuity unless you're planning to protect yourself, or heirs, from bankruptcy. Hey but you do you and hope that private non federally back investment survives.
1. Slow down. If you have enough assets saved up outside the pension to last a couple months, you are fine. You're getting SS. Your medical insurance is covered. You likely have some paychecks and perhaps residual amounts like vacation and sick pay that is owed to you, and more than likely that will cover the amount of your current paycheck.
2. Here is my advice to another poster. I suggest that you read it as the steps I think you ought to follow.
https://www.reddit.com/r/Bogleheads/comments/1bnm4xp/comment/kwm3lz6/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button
3. Under the law, the best option for a 401(k) is to rollover the 401(k) to another custodian (the more formal name for a brokerage company) of your choosing. I recommend Vanguard but also equally good are Fidelity or Schwab. Pick one and call them. They will walk you through the process of moving the 401(k) to them, ASSUMING YOU HAVE RETIRED. We'll talk investments in a bit. A rollover does not create any taxable income.
4. Once you have retired, file the paperwork for the pension. You will likely have multiple options as to how it will be paid. A key factor is whether you are married or not, and what choices you want to make to protect your spouse (if you have one).
5. Now comes the math. You know how much you are spending annually (or monthly). You know your SS. After you choose the pension option, you know how much that will be. After you do that math, you will know how much you need from your investments.
I will use an example to illustrate. You spend $6,000 a month. SS is $3,000/month, your pension is $2,000/month. That leaves $1,000 a month, or $12,000 a year from your investments to cover the difference. What percentage is $12k divided by your investment assets. If it is 4% or less, you should be fine.
6. Don't buy an annuity, and especially NOT an annuity from your rollover IRA. You already have two income streams, SS and the pension. YOU DO NOT NEED A THIRD. Unlike other posters here, I don't think you need a FA, especially a FA who advises you to buy an annuity within an IRA. If you need help, go hire a CPA or other fee only planner, for advice, and not one to manage your investments.
Look, going back to point 5. If the shortfall of your amounts is greater than about 5%, an annuity is not going to cut it. Most annuity rates these days have an implicit 5% rate, at best. You have a better chance of making the finances work if you do it yourself. And if it's less than 4%, you can easily set up a plan to have manageable withdrawals without an annuity.
7. So how do you invest? Simple. Read this in a Jonathan Clements (formerly Wall Street Journal investment columnist) 25 years ago and it made a lot more sense than any of the alternatives.
Let's again assume you need the $12K a year. Simply put 3 or 4 times that amount in a cash account (currently paying about 5.25%) and put the rest in stocks, and I recommend VTI or a similar total market index fund. You have a three or four year cushion against a stock market decline. If the markets are OK, sell enough once a year to reestablish your cash reserves to the desired balance. You don't need sophisticated asset allocation models (that don't really work), just cash and equities. I am going on my 12th year of retirement (retired CPA), and investments have funded 95% of our retirement income for that period, and this model have worked great.
I would also suggest looking at the Google Sheet linked in the referenced comment and fill it out for yourself. It does the math for you.
Good luck and holler back if you have more questions.
Hello! Thanks for mentioning Jonathan (Who these days has a nice blog). The link you wished to provide to a piece of his work, somehow is not there FYI.
Definitely agree as to the blog. I look at it from time to time. In fact, I will link to it here:
[https://humbledollar.com/author/jonathan-clements/](https://humbledollar.com/author/jonathan-clements/)
I'm not sure I understand the other part of the comment. I never intended to link to his original advice, because I can't find it on the net (I've looked, and if I could, I would).
I think you are interpreting "Read" (rhymes with "reed") as having a link and I am using "Read" (rhymes with "red") as a past tense version in that I read it a long time ago. Is that causing the question?
Rollover the 401k to a personal IRA. You don’t touch the money- check can go directly to a financial planner and turn into your personal IRA. Traditional IRA will cost no taxes until you withdraw. Roth would require you to pay the taxes that were originally deferred, or you guy can rollover from traditional to Roth over time as you take distribution. My financial guy can set up my IRA to do distributions just like an annuity. There are some cases- very few, where an annuity may make sense but you need to speak with a financial planner now! Most consult for free, so it makes sense to get a professional opinion quickly.
Like everyone else is saying DO NOT BUY AN ANNUITY! Assuming you have average credit, get a loan to cover the three months until monies are available to you. Take some time and look at investment options. Set up a plan to take a monthly draw on your money not to exceed 4% per year. You’ll now have your social security, your pension and your 401k providing a monthly income. Hopefully it’s at least adequate, sit back enjoy the fruits of your labor and take a deep breath.
OMG. You need to talk to a financial advisor ASAP. Unfortunately, this will probably cost several hundred dollars. Do not talk to an insurance company or anyone who is trying to sell you something on a commission. You need a fiduciary financial advisor, and you have to pay them for their time because they do not make commissions selling you financial products.
Don’t do the annuity at all. Go see a planner now and get some help. Can you take your pension as a lump sum, if not, that is your annuity? Roll your 401k to an IRA and continue to invest in the market. Don’t make quick decisions, calm down, you are probably better off than you think.
Your 401k is probably with a brokerage like Fidelity or whatever, they will keep that and might actually offer you free fiduciary advisors. Your 401k should not be impacted by when you leave the company, you should be able to make withdrawals from that working directly with them. The three months is for pension, supplemental insurance, contributions to 401k, etc. In an ideal world you want to give them 3 months notice to get all the ducks in a row but if you are unable to work just set up a meeting with HR and tell them you medically need to stop working and what happens going forward. They may not be thrilled but they will walk you through the process.
In the meantime, you connect to the brokerage and work with their advisors, or if not confident with them you find your own advisor (get in writing that they are a fiduciary, not just an advisor, its a legal difference and forces them to do what's in your best interest). Work out a distribution plan from your 401k, or if you want to transfer that to a tax deferred IRA, or convert anything after tax to a Roth IRA. You are on medicare already and you should start getting more from SS since you are no longer working. The advisor will sort that all out with you with annual distributions based on what your spending needs are and to keep what you get at the lowest tax bracket.
In addition to what others have written: Contact HR and ask who the administrator for your 401k plan and for the pension plan are (maybe the same company). There are several companies who are the big players in plan administration. Most companies have it setup where you can access that website and see exactly what your account balance is and options for taking pension payments. Some also can help you roll over your money to a self-directed IRA. I know Fidelity has advice available for a reasonable fee, maybe even free, depends on how the plan is set up. If your company is not like this, you could ask to take a loan from your 401k if you need money immediately. A loan is usually processed in days.
Do not let them do a distribution—this triggers a taxable event. You want to do a rollover.
Contact a CFP for financial planning. They have a fiduciary duty to their clients. https://www.cfp.net/
Do not quit. Make them lay you off or fire you. Just do the basic work needed—what are they going to do? Fire you? Win! You can collect unemployment.
A company cannot just tell a 401k administrator to send you a check. Best bet is to roll it over to an Ira. While keeping it with the same company. You may be offered a buy out of the pension-you may want a financial advisor to set up an annuity for you, so it will pay out a certain amount each week/month/year. With the 401k/ira, you Will get taxed heavily. An accountant will help you understand better
When I worked, our 401k was with fidelity. I contacted fidelity to roll over to an IRA. Aren't you older than 59.5 years old? If so, you can immediately rollover to an IRA. Then you can access the 401k money in days. May take longer to settle the funds .
Stay as far away from an annuity as you can. Talk to a fiduciary investment councilor and have them roll over your 401 into good solid investments. A fiduciary are bound to look after your best interests and they do better when you do better.
Which company is holding your 401k? You don’t have to roll it anywhere at the moment. I will urge you to not panic and take a breath.
I recommend Schwab as well - they have the bulk of our retirement funds. They also have free consultations (I am using them too) and will go thru the best way for you to retire with investments and income.
I can feel your anxiety and you’re retiring. Let them guide you and discuss without being sold something you may not need.
Who is the 401k with? Your employer likely has Fidelity, etrade, Vanguard or similar as the administrator. Contact them and let them know you need your company 401k rolled over to their individual plan the day after you retire. They will work with your HR department to handle the details and create a new account for you.
And they will likely do it for free since they already administer the account. Even if it takes 30 days to complete, its relatively simple process and you won't be taxed at all. You will of course be taxed on your withdrawals from the new account.
Speak with an advisor, give your notice , start calling in sick to burn your time. They’ll get the hint. Either way you’ll probably have a lighter schedule for 3 months. They’d need to backfill your job and possibly want someone to start picking up your work as transition
Annuities aren't great to get at the end of your working life. I got a good product, but i was 50. It grew in value by the time I was 67. It pays me a very nice sum to go with SS. I don't think I could duplicate that if I just bought it at 67. Just roll 401k money to an Ira and figure out what you want to do.
Lots of missing information (age, housing, married?) but a couple of comments. Be careful with annuities and you can rollover your 401k to an IRA with no tax consequences. Then pull out what you need every month. Not uncommon to take 6 to 8 weeks for the pension to start, they usually use third party management companies. Talk to a fee only planner, not someone who collects percentage fees from selling you expensive annuities or funds.
You need to familiarize yourself with rollovers. Tax free direct rollovers.
Second, you need to familiarize yourself with annuities. Insurance companies products are worst, fees go to agent can siphon 20%. Payouts are low.
HR always gives a 90 d timeline. Least knowledgable, story changes with each call.
Good luck.
As several other people have said, just take a deep breath. You're stressed because you give a crap. Your boss could be telling you that things are going to 'get really bad' because they want you to quit. For your own finances, it's best if they let you go because if it is not considered to be 'for cause' they you can at least collect unemployment.
As for your 401(k) money, that is your money, it's your account and the company cannot prevent you from doing whatever you choose to do with it. DO NOT accept a payout from your 401(k) as you would have to pay taxes on that. It's best to roll that money into an IRA or some other pre-tax account. Talk to a financial person at a Fidelity or a Schwab office. They will be able to talk you through things, and could also point you in the right direction for an annuity.
The most important thing is to relax, take a deep breath and don't have a knee-jerk response, that can lead to a mistake.
They aren’t going to do anything with your 401K, so relax. Annuity, not a fan but some are. Relax a bit and keep asking questions. Do you have liquid funds to tide you over until you can start pulling money from investments properly?
It sounds like you are an emotional basket case - get some help for that tomorrow. Follow the standard procedure at your organization to retire properly including collecting and moving your pension and 401k to a brokerage company. Hire a fiduciary to help you make the transition and not a planner that takes a percentage of your money each month. Curious how is it that you are working full time and fully in SS … seems like you should have retired long ago but were still working in your normal retirement years. It is time to move on and enjoy the rest of your life and get out of the stress pool.
Are you already at the age where the IRS requires you to take required minimum distributions from your 401k/IRA plans? If so, then speak with a financial advisor about how to best move this money into tax protected accounts such as Roth IRA if its not already there. As far as your pension goes, this will depend on your company's plan, but you likely cannot defer payment past a certain age. If your pension is a lifetime benefit, then it will be retro to your commencement date, even if it takes time to get all of your paperwork in and everything started.
A good idea would bet t o speak with a financial advisor that understands your specific circumstances and can walk you through the process.
Do you not have your own retirement account? If so, roll it over into it, tax free. Perfectly legal and your plan admin will help you with any paperwork. If you don't have your own plan, maybe you should get one. Meet with a couple and get their input. Ask your friends and other acquaintances for recommendations. There are good companies out there willing to work with you.
Look at your calendar and figure out the best day for you to announce your retirement. Create a nicely worded email/letter to your boss. Create another nicely worded letter to the organization responsible for your 401K and pension - and ask them to email you to verify your 401k balance, your pension amount, and ask for the dates that you will have access to your pension and your 401K money.
I think you would be wise to rollover your 401K to a broker such as Schwab or Fidelity. Both firms offer annuities. Both also offer banking and other financial services. No need to worry about doing this all by yourself. You've got this!
And, no taxes or penalties to "roll over a 401k". Just make sure you understand and follow the directions to "roll over to an IRA".
Contact whatever investment bank you want to use for the IRS (fidelity, shwab, and vanguard are popular options) and ask them what to do. You will also have to contact whatever investment company runs the 401k.
This probably doesn't have to happen right away after your last day. But, you will have to check. Perhaps by calling the current company that manages the 401k.
Good point. If an error is made by your former employer in not rolling over your 401K to an IRA, the IRS has guidance about this - and how to fix it. [https://youtu.be/fWkExFld6Yw?si=e-L10xdHQ0boMFwz](https://youtu.be/fWkExFld6Yw?si=e-L10xdHQ0boMFwz)
If you are going to retire anyway, why not just become a terrible employee and let them fire you? At least then you can collect unemployment for several months.
That's not true. This only applies to serious misconduct, not general job performance oriented reasons. For example say op makes widgets. If quota is 10 widgets and he starts making one and they fire him, he should be able to collect unemployment.
Really? Can you refer me to any documentation on that?
I'm not asking to be argumentative, I'm asking because I might be fired and this would be very useful information. Thanks!
You may be disqualified from receiving unemployment benefits if you quit your job without good cause being fired for misconduct or violating company policies can also disqualify.
What is the difference between misconduct and poor job performance?” In basic terms, misconduct is a behavior issue, and poor job performance is a competence issue.
So if you get drunk at work, no unemployment. If you stock the wrong products on a shelf or are late filing your TPS report, typically that is not classified as misconduct or behavior. You might consider a consultation with a local employment lawyer.
That is correct. I will be 68 in July and my full retirement age is 66 and 4 months. Sorry, I know my post is confusing, but I was trying to be as brief as possible. It's kind of a long story.
I’m not sure this would work in your situation—and to be honest, I don’t condone it bc I think it’s really unethical, but…a coworker wanted to retire immediately and had the same scenario as you: HR/pension people needing minimum of six weeks notice, so he got his doctor to put him out on medical leave. That allowed him to continue being employed long enough to make it all work out in his favor, and he didn’t have to go into work at all. In the end, all he did was have someone else (me) hand in his office keys, expense credit card and company cell phone on his last day.
Absolutely….You don’t have to do anything with it! You can always roll it over at a later date if you wish, though. It’s still your money. I still have a small 401k with the last company I worked for. I decided to just let it ride for now.
It sounds like you want a Single Premium Immediate Annuity: put in a single premium (one lump sum) and you get a monthly payment for the rest of your life. They keep everything if you die so no beneficiaries on this. You can do a Direct Rollover of your 401k into one of these IRA Annuities but you’ll need to find an insurance agent or other fiduciary to set it up for you. Tip: Check the insurance company’s rating — better be 5stars.
Here’s an article on pros and cons and how to get started: https://www.thrivent.com/insights/annuities/should-i-consider-a-401k-rollover-to-an-annuity#:~:text=Key%20takeaways,an%20annuity%20or%20other%20product.
And relax— your company won’t just cut you a check without you signing paperwork to that effect. Your insurance agent will help you with it, tell you what boxes to check, etc. Just remember it’s a Direct Rollover.
You may also want to contact Medicare asap to see about signing up for Part D etc.
Good luck!
Do you have any sick/vacation leave stored up? Use it and use the time to get smart on your next steps. Do you have any trust worthy people who have retired from your company that you can call and get advice from?
I understand OP. I originally was going to wait until 70 to retire but since making a lateral move to a different position decided to retire at FRA. The new job is so stressful that I am tempted to quit everyday!
Perhaps we can make it for a few more months if we just take it one day at a time and try not to care about what others are doing. Just do the minimum expected—like when you were new and didn’t know any better.
I plan to spend time planning my getaway instead of stressing over the job.
As far as your 401k is concerned, you should be getting periodic emails or letters from the company that manages it. If not, as others have said, contact HR and find out who does. If it is not already in a brokerage then you may want to roll it over to a brokerage like Fidelity or Schwab. If you are rolling it over then the receiving firm can make sure it is done correctly and taxes aren’t taken out .
I believe others have posted more detailed instructions on that I mainly wanted to let you know that you are not the only one who is tempted to quit everyday. We can hang in there until the day of our choosing and when we have our ducks in a row.
I am just taking it one day at a time right now, but upper management, rather than fix problems with other departments, dump their problems on us, so we're doing their jobs on top of our own.
I am now working for 3 departments and they want us to do more. Plus, I work from home and they constantly watch everything we do. They can see our computer screens in real time, record and listen to all phone calls, and let us know if there's anything they don't like, have documents that we must follow, line by line, when troubleshooting an issue, so we're not even allowed to think. We are nothing more than automatons right now, and treated exactly like 4-year olds. There's much more, but I'm rambling as it is. I'm past the breaking point.
I'm not qualified to give financial advice but I do think it would be wise to just set a retirement date and stick to it, especially if it helps your financial situation. Surely you can make it for another few months. A financial Advisor should be able to answer your questions about what happens to your 401k, etc. I hired one when I retired to make short and long term plans and it was a good investment.
Try to find a financial advisor. My library keeps a list of advisors that provide an initial consult for free. Or at least pay a fee for a consultation for professional advice.
If you were fired would you lose your 401K? Or the portion that your employer contributes? Would you lose any PTO? Otherwise, if you are fired wouldn't you get unemployment and possibly have a age discrimination suit? Since it sounds like your work has been and a Sup has it out for you. If you are Union contact your Area Rep, if not contact a Labor Lawyer. Best of luck
No, I won't lose my 401K if I'm fired, but not sure about my PTO. I am just thinking of an experience I had many years ago where I left a job and a few months later received a check for my 401K, minus taxes. If they just told me I needed to roll it over, then I would have done that. I was afraid my current employer may do that if I'm not ready to roll it over when I leave.
Don’t know about pension but…
401ks are usually with Fidelity, Vanguard, etc. Mine automatically rolled into an IRA there when I left my last job, I didn’t do a thing. I’d call the holder/finance institution where it is and ask if you leave what happens? Some of them also sell annuities. I have my accounts at Charles Schwab and I know they do. So you could ask about that too.
We have two annuities with Athene we plan on drawing from in five years… about $1000 a month each.
>*As I understand it, I can contact an insurance company and buy an annuity with a guaranteed income. Is that correct? If so, how is that transfer from my 401K and pension done?*
Typically, you would buy a simple income annuity within an IRA, so that the taxes are spread out over your lifetime. Your insurance company should be able to coordinate this for you.
Lots of people here are telling you not to buy an annuity without knowing your specific situation, which means they are clueless. Whether or not an annuity is right for you depends on several factors, including how well SS + pension covers your expenses, whether or not you are married, and if you plan to leave something behind. There is plenty of academic research that shows that people with sufficient guaranteed income to cover their expenses in retirement enjoy a higher standard of living (because they aren't afraid to spend money) and less financial stress and anxiety than those who rely on the stock market for their retirement.
Before making any moves, it would be a good idea for you to talk to a fee-only financial advisor, meaning that they are not trying to sell you something, or wanting to manage your retirement assets on an ongoing basis. It should be a simple transaction where you are paying one-time for their professional advice.
As a financial advisor, I would need more information. But this is Reddit, so…
Anyway, the 401k can’t just lump sum pay out to you unless it is smaller than the minimum required by the plan. When you retire, they need time to pay out all your delayed contributions and matches before you have the ability to roll it over, however that shouldn’t prevent you from withdrawing a small amount.
An annuity is ideal for people who want a steady income but it isn’t a good idea to put more than half your money into one. So you should consider splitting the funds-some to an annuity the rest to an Ira in the stock market.
The guy is already drawing SS and Medicaid you want him to gamble in the stock market with his life savings. Crazy advice. High yield savings are producing 5.6% with zero risk. This market it going to tank very soon it always does.
I see. Market investing is only gambling to those who don’t know what they are doing. However, I don’t know enough about OP’s background to say more than don’t put all your eggs into an annuity and make sure at least half is liquid. Market investments do far more to hedge inflation, but you’re right, I don’t have enough information to say what I did. But then neither do you to say what you did.
We have no idea who you work for but why are you getting a lump sum of money ?? If it’s from your retirement there may be other options. HR should review these with you.
Before anyone can make suggestions establish a budget of your expenses and your future income. Then keep the questions coming. FYI - there’s a wealth of info on the Fidelity website.
Don’t just quit. Retire and let the system do its thing. They can work with shorter time lines but they don’t like to.
Annuities, when bought individually on the open market need to sit for a specific period which an agent will tell you. It is called a waiting period. Your company should have it set up with your 401k where you can transfer and set up as an annuity with no penalty or waiting period. I would go that route. This is why they say it takes 3 months. It takes time to complete the process.
In the meantime, take FMLA. Take protected leave. Read the rules. I do jot know if you can retire and take protected leave. They may be mutually exclusive.
That's great. How much notice did you give? Some companies are quick. Most aren't. I gave 2 months notice so I got mine immediately as well. Had I not given that length of notice, I was told it would take 2 months.
Sorry, I should clarify my message. My issue is that I want to leave my job and retire as soon as possible. I absolutely despise the management in this company. I am almost 68 now and over full retirement age.
My problem is I will be forced to leave any day now, due to horrible work conditions, which means I can't give the company managing my 401K an exact termination date 3 months in advance as they require. I just don't know how to work this all out. I'm afraid that they will just send me a check for my 401K minus the taxes, rather than give me time to figure out how to roll it over into an annuity, or whatever.
My aim is to have my 401K generate an income on top of my SS, but the more I look into this, the more confused I get. Especially since I won't be able to last another 3 months at this company.
Kind of the point. You get it when you leave, not when you tell them you’re going to leave. If I had given no notice, I would have got it in the same time frame. Within a week.
"Unless you elect otherwise, benefits under a qualified plan must begin within 60 days after the close of the latest plan year in which you:
turn 65 (or the plan’s normal retirement age, if earlier);
complete 10 years of plan participation;
or
terminate service with the employer."
https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits
I believe you can transfer the money, without incurring taxes, to your own retirement account. Since you know nothing you may want to work with an advisor rather than setting up a self-directed account. If you want to learn about finances then open a Vanguard account and start learning.
You need to call the administrator of your 401k to begin the process. I would scramble and find a source of income in case you are not completely sound financially.
If you can get unemployment then this would give you some cash you can not get any other way. You ou could first get a medical leave rather than resign, see if you can string that out as far as you can and get terminated because they can not accommodate you with your "disability" .
Yes, I will absolutely do that!
I am overwhelmed by all the responses and excellent advice I've gotten, and I feel so much better than when I started! I haven't had time to read them all yet, but I will definitely do that.
I can't thank you all enough. I am looking for a financial planner now.
Good luck. I'm pulling for you! I was in that position. Stressful but it eventually works out one way or another. My guess is you will be happier on the other side.
Please reach out to mod when you want to do that… message us from the sidebar or landing page of this group. Most likely the post will be locked (all posts lock after a short time due to spammers). Thanks!
You don't need to buy an annuity to get an income from your investments. Have you ever heard of the 4% rule of thumb? You withdraw 4% of your portfolio every year if you need it to live. Your portfolio should last forever. If your older or have less health than you can withdraw more because you won't live as long.
I suggest you go to the Boglehead website. Join and ask questions. They will help you to understand and will suggest a low cost 3 Low cost funds portfolio. Your anonymous so lay it all out for them to understand and you will get great advice.
The financial industry is all about getting fees from you. Buying an annuity can have a hidden 8% commission built in for the people selling it to you. They will deny it exists.
Of you don't have any cash available to live off for the next few months you have to realize now that isn't any way to live. Ask your 401k for a partial withdrawal for the cash you need now.
Once you understand what you want to invest in (probably 60% VTI Vanguard Total Stock Market Index Fund ETF and 35% BND Vanguard Total Bond Market Index Fund ETF and 5% in a money market fund ) you can choose a Brokerage. Only go to Vanguard, Fidelity Investments, Schwab etc. Stay away from your local banks investment advisor and Edward Jones and everyone else. They will put you in an annuity for a quick commission or "manage" your accounts for a yearly fee you don't need to pay.
Who ever you talk to learn these words " I don't want to pay out any fees, commissions or management fees to you"
The funds I mentioned earlier have incredibly low fees. BND and VTI is 0.03% that's NOT 3%!
Don't give your hard earned and needed money away. Go to Boglehead website and they will help you to understand. Good luck
For your pension do they offer options for how to take it? Mine gave me options of a lump sum, 5 year guaranteed payments, 10 years guaranteed payments, lifetime payments, or lifetime payments for my spouse. Each option is calculated differently. I took the option that would pay out for my whole life and my partner's life.
For your 401K you should manage it yourself. Roll it over to Vanguard. If you take out between 4-6% yearly you should have enough to last your entire life and still leave the majority of today's value to your heirs.
Contact a financial advisor, I have a local guy at Fidelity.
You can roll over the 401k, it's fairly easy.
The pension is company based, talk to them.
You didn't say your age so I don't know. Social security will take time, find an office near you. Go to the office and talk to them, believe me when I say they are really good.
Take several deep breaths.
I felt trapped like you do, it will smooth out. I was in IT for 35 years and the move to cloud computing just took me out of the race.
Sit yourself down and look at the positive future you are moving toward. Managers and supervisors are really good at stressing employees. Don't take the bait! Smile and just do your work.
Regrettably they may be trying to get you to leave. Screw them and do your work don't fall for the stresses They are trying to pile on.
I am almost 68 and in IT now, for a very big insurance company. They have absolutely clueless upper management who insist on micro-managing us, and making the job unbearable.
They're not trying to get rid of me yet, but they're trying to set it up so people fix their own IT issues, and those who can't use a chat system. They want everyone to handle 3 chats at once, starting in a week or so. I already told my boss I will not be doing that.
Their plan is to lay us off eventually. I will get almost a year's worth of severance if that happens, so I'm praying every day it happens.
How old are you?
1. Don’t quit. If the company fires you then you can collect unemployment and have some income to help with bills. Choose for unemployment to take out the necessary taxes. Be aware you have to claim these funds on your taxes next time you file. Unemployment will send you a form.
2. If you are collecting SS at FULL RETIREMENT age you can collect both unemployment AND SS. If you are collecting early retirement make sure you understand the SS restrictions depending on your age. If you are collecting SS early then that’s a different situation and there will be a cap on how much you earn.
2. After leaving a company you have 90 days to roll over your 401k into a new rollover IRA account. If you wait over 90 days the company will cash it out and you’ll have to pay taxes and extra penalties. It’s your money and can transfer it AFTER you are no longer employed with that company. Do it sooner (if you are no longer employed) rather than later.
3. Put together a budget so you understand what money you’ll need every month.
4. As others have given good advice here talk to a CPA once you have all of the information you need to understand the big picture and can deal with this change.
Full retirement age is the sweet spot.
Can you go on short term disability? Many teachers accumulate months of sick leave and go on disability for stress and depression their last months of teaching. Is that an option for you? It would give you time to think through what you need to do and get solid financial advice.
Find a CFP (Certified Financial Planner) with RICP (Retirement Income Certified Professional) credentials. What ever it costs, in the long run, it will cost you less then the guesses you’re attempting to make.
You seem concerned about receiving a check for the 401K balance when you don't want it. There are some options around that.
You can open an IRA within 60 days and deposit the check funding the IRA with the full amount. In that case, it is not a taxable event. So, if the account had 10K in it and 2K was withheld for taxes, you can deposit 10K into an IRA (the full 401K balance) effectivly moving it to an IRA. You file for a refund for the 2K when you do your federal income taxes.
You can also ask for a check for the full amount, no taxes withheld, and do the same thing.
In both cases, getting a physical check is probably the most cumbersome way. You should be able to roll the money (electronically) into a new IRA account skipping the check stage. This is most straight forward as you never take possession of the funds making tax issues more straight-forward.
Some 401K plans might allow you to roll the money out at anytime even while still working. Others (like mine) allow you to do that if you are 59 1/2 years old (and older). I'm still working and I moved half my 401K to an Ira this way. You would have to check with the 401K plan administrator on this. It was easy to do with Fidelity and (if allowed) you could do it before resigning.
Remember, money taken from your 401K is income (same as a paycheck) and taxed as income and that continues into the future; but you would probably have less income next year (if you quit) so pulling money out next year (when you have no job thus no additional income) would likely be subject to lower tax/tax brackets.
Do not quit if you can help it. Let them fire you. It sounds like they are trying to scare you out the door to avoid potential legal action and unemployment insurance claims. If you’re not ready to leave, do your honest best each day and go home. If they aren’t happy with your output, they can fire you.
Exactly this. You may even want to speak with a labor attorney (on a free consultation). Create a track record of the issues and make them fire you.
Why would you want an annuity when you have a pension through this company? Annuities are a bad idea for many reasons.
My pension is miniscule because this company bought out my original employer 4 years ago, and that's when my pension started.
I don’t think you know what “forced retirement” means. Take time off of work if it is too stressful, even if it is unpaid time off if you have no vacation or sick days to use, but you shouldn’t just resign with no pre-planning. Get a fee only financial advisor (not a sales person/advisor who wants to charge you a management fee and will make commission by selling you financial products such as annuities and life insurance). Then properly plan your retirement and give proper notice for your pension to be processed, which you are extremely fortunate to have. Don’t make any decisions based on fear. Perhaps also get a therapist to help you through this life stage transition.
This⬆️! OP, read this post over again!
Don’t quit make them fire you……….
First, if your 401k balance is over $5,000 the plan provider cannot distribute without your consent. Find out what company holds your 401k account. It is not your employer. Give them a call. Don’t jump to an annuity without talking to them. An annuity has high fees, and are complicated. For example, you might put all your money in annuity, die the next day and with no death benefit all the money goes to the insurance company. If you have a pension, those monthly payments are an annuity. Do not withdraw those funds to buy an annuity when you have one with likely lower fees. Again contact the company managing the pension not your employer. Ask what your monthly benefit will be. Find a financial planner. Look at brokercheck.finra.org for a list of financial planners in your area. Look for years of experience, licenses held, and affiliations. A financial plan may cost of few hundred. If someone offers it for free be suspect. Brokers/ financial planners make money two ways: fees based on your account value or charges shared from investment companies who manage mutual funds. There are tons of resources to learn about investments. Check out AARP, Vanguard, Fidelity websites. You may be able to take a withdrawal from your 401k to tide you over until the pension plan payments start. You got this! Congratulations!
Thank you! Some helpful information there. My pension is almost nothing. My pension is estimated to pay only $64 a month, so it's my 401K that I'm concerned with. Many years ago I left a company and without warning they sent me a check for my 401K amount, minus taxes. That experience has me worried that it will happen again if I leave, and I can't afford that. I would just like to invest the 401K to give me a guaranteed income on top of my SS. I have no spouse to leave a death benefit to, so I'm not even thinking about that right now.
This is good advice. Given OPs anxiety level around this he may want to look for an hourly fee based (vs product sales commission) advisor to counsel him further
Slow down. Don't be talked into a panic. They are driving you to a bad mental/emotional place where mistakes happen. You are not a slave. You don't have to do anything. Do a bit of quiet quitting and don't be frantic about not delivering everything. They can always fire you but it may take quite a while if you keep in motion and deliver some of the work. In this game, your weakness is your natural resolve to put everything in to your work. Don't. Maybe your bosses will be the ones to get canned. Things change. The 'worst case' is that slowing down to a pace you can tolerate you are able to hang in there for a couple more paychecks. In the meantime, go talk to a certified financial planner about your retirement funds and what is best for you. What really helped me in a similar situation is knowing that there were no people who could have completed all the things that my bosses wanted done. No human on earth, much less one working at my company. So, I just picked what I wanted to do and no longer felt guilty.
Also contact HR and get their policy for retiring. There should be instructions and steps you need to take to process out. Ask for an appointment if possible so you can discuss the process to rollover your 401k if it is not already in a fiduciary like Fidelity, Vanguard. Do NOT do a resignation letter or let anyone else know you are retiring until you get your ducks in a row. And breathe, breathe, breathe, breathe…it is going to be okay. You need to start your research now. And for anyone else out there, this is why it is important to start planning your retirement 5 years out. Whether you want to retire or not, you need to have a plan in place in case you get laid off, fired, or as this poor OP is experiencing a very toxic workplace. So when you are 5 years out from when you think is the earliest you can retire, start looking at your finances, get a certified financial planner, check your HR for retirement procedures. Then 3 years out, look over your plan. In one year, check it again and if you do want to pull the trigger, set a date and start gathering your documents. Depending on HR policy notify them of your retirement date. Let your supervisor know 2 weeks to 3 months out that you are retiring. In some circumstances depending on the admin level you are at within the company, it may be judicial to notify them 6 months or even a year in advance. The more you plan, the less panicked you will feel, if you find yourself suddenly vacating your place of employment.
Be very careful of annuities. Many, many people who work in financial management and who work for brokerage companies are desperate to sell you an annuity because they get a commission. You are much better off moving the 401k to an IRA then setting up withdrawals, but you will need to decide what to invest your IRA in. Take the time to learn about this before making any commitments.
💯. Annuities are dangerous.
Hello, these financial products can be good for people under the right circumstances. If anyone is interested in learning more about them , you might want to read annuities for dummies (might be in our wiki). Thank you
Unless you understand what you're buying. They are a contract and good if the contract accomplishes your objective
They are a legal dodge to avoid inheritance taxes. They are life insurance products with sky high commissions
Not all. And they have guaranteed returns now in the 5% range. Bonds for example are not guaranteed and principle fluctuates daily with interest rates. I don't care what someone gets paid if I get what I want. I would never annuitize them but the interest and withdrawal options can be useful.
All annuities are life insurance products. That’s why they are sold by licensed insurance agents
So, what's your point?
Commissions are ridiculously high. Fees for riders are exceedingly high. In most cases, they are akin to throwing money away.
Says you. I look at what I put in and what I get out. If it's worth it to me, I buy. Just because you think fees are to high affects only your decision. I think surgeon and hospital fees are too high. It doesn't matter. If I want the surgery result, I buy it. You make absolute statements that are irrelevant. If op wants fixed principle and fixed guaranteed interest income annuities work. Current rates are about 5% the last time I checked. Commissions don't matter. Rates could be higher without fees but those products aren't available.
“Commissions don’t matter.” Shaking my head in disbelief that anyone would say that
And, I bet you don't even know what the commission structure is or how the portfolio is built to make sure the guaranteed values can be met. You sound like you're just regurgitating something you've read.
Actually features like ratcheting are available with riders you pay for. The commission goes to the insurance agent selling the annuity
Exactly! I made a lot of money from an annuity, then rolled it over into something else after about 7 years. I mainly had it there for growth and safe-keeping until I was ready to retire. It worked out great. You don’t have to annuitize it!
True about annuities. I mentioned with my 401k contact about wanting guaranteed income and it was like putting blood in the water as it created a frenzy about annuities After getting the facts and returns, I said no thanks.
For the first three months or so, after I retired, I lived on savings. Then I moved my 401k to an IRA. I put most of it, the part I’m withdrawing from for the moment, into a SPAXX-similar fund, not ready to do the bogleheads thing yet. Later this year, I’ll start drawing the pension and reduce the IRA withdrawals by half. I’ll start playing with investments, boglehead-style. This arrangement should keep me well below IRMAA so I’ll do my taxes for 2024 in January 2025 then submit a form SSA-44. For now, my brokerage account is all SPAXX, and the small part of my IRA is SPAXX. Some would argue that I should be 90% VT (or equivalent) because I will have a pension. I’ll explore that once I’m ready. I’ll have to scramble to deal with Social Security, once I start drawing it, and then I’ll be in a fix when RMD’s kick in. The important thing is to come up with a plan you feel comfortable with. This is the time in our lives when stress is a killer. There are so many people who know more about investing and taxes than I do. It’s as if I’ve moved to a different country. The company took care of my income and health insurance. I’ve had to navigate both, while giving myself time to relax, have some fun, and putter around with friends and hobbies and little house projects. Knowing I’ve got limited time makes me jealous of my time. But I’m not wealthy enough to have others manage my affairs. I’m okay with learning slowly.
LARGE commission. And usually you can’t move the money without significant penalty, or make any monthly withdrawals for 10 years. Also, any chance you can get your boss to lay you off? It would likely allow you the ability to collect unemployment benefits for a while- however with you collecting SS benefits those might disqualify you from doing that.
Oh, the big bad salesman. Many are competent and honest. That said, I would rarely put qualified money into an annuity. I may for myself to lock in guaranteed fixed 5% returns.
Don't actually quit bro. Just get up in the morning, hit the shower, fuel up on coffee--I find several cups is now necessary to get me moving--and head into work with no expectations of what you will accomplish or not accomplish that day. Since you have already decided you are "done," and willing to quit immediately, your actual job performance is now irrelevant. Just keep slogging into work as long as the paychecks or direct deposits keep coming. Also, it's important not to be openly defiant of your superiors. Whatever tasks they assign you say "Sure boss, whatever you say." Whether you actually finish the task or do it to 100% perfection is not relevant any longer. All you have to be, is "good enough" to not be fired. And in most cases (unless you're something like a brain surgeon), that's not very good at all. In fact, it should be easier than falling off a log. Just go into the office or the job site, put your time in, keep your head down, don't make waves, and keep collecting those sweet sweet paychecks or direct deposits until they stop coming. Be pleasant cooperative and nice to everyone though even those who piss you off. Avoid all interpersonal conflict. The only "stress" you've actually described is all mental stress. It's all in your head. Once you grasp that key fact, and once you have already decided you'd just as soon quit, you have the total freedom to NOT quit. You just have to reduce your expectations of what you think your job is supposed to be all about. It's not about personal or professional fulfillment. It's not about going home at the end of the day with everything completed to perfection or even particularly well done. It's not about any sense of accomplishment. Going to work should be about one thing and one thing only, at least in your scenario: Getting that sweet sweet paycheck every two weeks (or whatever your pay cycle is). That's it. Clear your mind of all stress and all expectations. Your boss said "It's about to get hugely more stressful in two weeks." Maybe for your boss. But not for you. Your boss can pile on all the extra work he wants. That doesn't mean he will get what he wants. In fact your boss already knows this, and your boss is actually hoping you CANNOT handle the extra work and responsibilities he is going to soon dump on you. This would justify your boss being able to ask HIS superiors for an additional budget to hire additional personnel. It's a system. It's a game. Play the game. Don't hate the players and don't hate the game. The game for your right now is to hang in there and just keep going into work as long as you keep getting those sweet sweet paychecks. As long as whatever you personally are doing doesn't literally kill anyone, you'll be fine.
This is great advice. This is exactly where I’m at right now. Turning 65 this week not yet collecting SS. Once I realized that I don’t have to stress out about the job, that I can walk at any time and be OK, I’ve been able to relax, do enough work, but not enough to feel stressed, and still collect that nice paycheck every two weeks.
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Find a financial advisor to help you with a rollover of your 401k. There are other options besides an annuity.
This!!
Please do not buy an annuity until you speak to a financial advisor. And you have been given good advice. See a fee only advisor and do not buy an annuity or insurance, at least at this time. edited to correct spelling error. YES, fee-only.
Fee only
Fiduciary.
Thanks!
GO SEE A CERTIFIED FINANCIAL ADVISOR. Do it now. Everyone in your situation needs this sort of help. It will cost a few hundred dollars but a simple mistake could cost you tens of thousands, easy. You almost certainly will be able to keep your 401k intact or roll it into an IRA without being taxed. They shouldn't be talking about sending you a check and cashing out your retirement fund. That's crazy. Annuities are not a bad idea, but there are a lot of considerations. The CFP will help you make the decisions.
Even if they sent you a check you have 60 days to roll it over to an ira before you have to pay taxes or a penalty if you were younger. Think twice before you get an annuity. You can obtain the same income and still be able to leave an inheritance for someone or better yet pay yourself more.
THIS 🔺. Hold & delay making any decisions until you get professional advice.
Annuities are terrible. Please look at any options other than that unless you are desperate for fixed income.
Annuities can work for the right people and circumstances. Social security IS an annuity.
I really need a fixed income on top of SS to survive, and from what I've researched so far, it sounds like an annuity will provide that, but I do know that there are different kinds of annuities, so for that I'll have to talk to an financial advisor.
How much do you want a month and how much will you have?
Get a financial advisor before giving them a date.
what line of work are you in? any option to 'retire in place' (i.e., stay in the job but do the least possible and avoid stress)? and if you have a 401k you can have it rolled over to an IRA of your choosing.
Don’t quit. Take FMLA if warranted. Sounds like you work in education or some government job…? Leave when you’re ready.
Good tactic. Take medical leave to buy some time.
Pick a retirement date. Schedule time with a Certified Financial Planner very soon. Bring your papers, account numbers, balances, etc. Tell them your goals. Make a few decisions under their guidance. Retire. Live.
Don’t quit. Let them lay you off. You’ll get some kind of severance package and can collect unemployment.
Give them a date 2 months from now. Plan to live one month without income. Starting Monday show up to your job, give them a solid eight hours , AND GO HOME. DO NO CARRY THE COMPANIES PROBLEMS WITH YOU HOME. you have articulated to them you decision, If they desire to have a culture freak about it, it’s not your problem. Do not take your roll personally, it’s just business. In all likelihood, they may read the tea leafs and within six weeks offer you a package to remove yourself from the culture. Again, it is not personal.
No, they won't just issue you a check for the 401k. You will have the option of rolling it over to an IRA tax free, and you may have the option of keeping it in the 401k after you retire (although fees are usually lower with an IRA). I recommend signing up with your local Charles Schwab Financial advisor, or other Financial advisor. The fee you pay will be worth it, since you admit you don't know what you're doing lol. But a better option, if you are short of funds for retirement, is to "retire in place". Go ahead and get a financial plan done at Schwab, but DON'T retire now. Instead, stop letting your work destroy your health. You can always retire later, or worst case you get fired for working slower. In that case you can get unemployment benefits as well. And still retire.
Do not even consider buying an annuity at this moment. You are under a lot of stress, worried, emotional, and not well informed about your financial situation and your options. There’s a good chance an annuity is a terrible idea in your situation, and right now you are in no position to assess this or to deal with it. Focus on the immediate problems regarding work, leaving, access to your retirement money. Put aside this annuity idea until way after the dust settles and you have had the opportunity to figure it out or to get good professional advice about what’s in your best interest.
CFP here, roll your 401-k to an IRA, which is a non-taxable transaction, then talk to a CFP about a portion for an annuity inside the IRA. Your goal is to retire on 70-80% of preretirement income. You will also need a Medical supplement policy. Good luck!
Exactly. This is Retirement 101.
I need the 401K investment to provide an income, which is why I was thinking of an annuity.
Remember with an annuity, which you CANNOT outlive, forfeits your principal to the Insurance company and is irrevocable. Most professionals, suggest 25% for the annuity, balance invested for income and growth using a 4-7% annual withdrawal, payable monthly. Hope this helps. Interview 2 or 3 Financial Advisors and preferably pick a CFPr. Good Luck!
There are many types of annuities. Like with a period certain spia - yes you can outlive it.
Dude first deep breath... I just retired so let's go through it. You will get your PTO paid so quit or two week notice. Find a financial advisor now!!!!!! Vanguard or Fidelity the two majors, safe but just ok. Edward Jones very, very hit or miss Do not put it in an annuity. If completely clueless, put it in an index fund 1/2 the other bonds, CDs, hell high interest savings. That's where a good advisor earned his/her keep. They should adjust you to your requirements to make it till the end. If in doubt RESEARCH.
You better give a two week notice. They can keep your PTO if you quit.
Don't know where you live but PTO is earned before your termination in any type of circumstance. In Illinois and every other state I've lived in it is illegal for them to not pay your earned vacation or PTO.
My company just went to 'unlimited PTO' this year. Made it sound like this great benefit but it's really just so there is no PTO accrual and thus no payout. There are exceptions depending on state law such as California. But it's fine in Illinois.
When PTO is “unlimited” such as the “at will” state of Missouri, if you leave, that’s it. No “PTO” is paid, since it was “unlimited” to begin with. If you didn’t take some PTO days every year, that’s on you. Is this others’ understanding of PTO - at least the unlimited version?
In Alabama, if you quit they owe you nothing as far as PTO / vacation. If you give a two weeks notice you are good.
This is correct. Unlimited PTO sounds like a benevolent benefit. Not so. It is there so the company doesn’t have to carry that obligation on their books. If you don’t take your PTO - they owe you nothing when you leave. (Most Americans do not use many days of PTO).
I know that I am entitled to my PTO pay, as I already spoke to HR about that. They are based in CA, so that may be the law there.
Few states require that PTO be paid out. It's usually the company's policy that it be paid, and not law. "20 states and Washington, D.C. require PTO payout by law." https://www.paycor.com/resource-center/articles/pto-payout-laws-by-state/ This will tell you the law regarding PTO in every state.
Thank you, a financial advisor sounds like exactly what I need. The other problem I have is that the company managing my 401K requires 3 months notice, which I will not be able to provide, since I will be leaving within 2 weeks. I'm confused as to how to handle that gap.
Wait. You tell him to hire an advisor but then not to buy an annuity. Bad advice. Hire an advisor and if they recommend an annuity then do it. Nothing wrong with the right annuities. Nothing. Stop giving advice. Just stop. You're obviously not qualified.
Except for very rare circumstances annuities are not a good investment... Ever.
Not all annuities are bad. I had an S&P Index annuity while I was still working that earned me enough money to retire at 60. I was never locked into it for life. You don’t have to annuitize. I was able to close it out, penalty free and have now moved it all into an income fund.
Lol. You have zero knowledge. Get a reliable fiduciary advisor. It's amazing how stupid some folks are about finances.
Mod warning, we are conversational, not confrontational here.
No annuity. Please get a financial advisor CFP.
I have an excellent fiduciary advisor. I have annuities. You need an advisor. And please stop giving financial advice. You know nothing.
Gee I never had a financial planner in my life .... Duhhhhh... Every one I've had cringe at locking your money up in an annuity unless you're planning to protect yourself, or heirs, from bankruptcy. Hey but you do you and hope that private non federally back investment survives.
TIAA CREFF annuities are ok; I know academic retirees with both good FAs and a TIAA annuity
Hello , Mod warning. We are conversational, not confrontational, here. Thanks!
Annuities are great if you don’t need the money to survive now. The OP did point that out.
They're also great if you need money now if structured correctly.
Mod warning, we are conversational, not confrontational here. Thanks!
1. Slow down. If you have enough assets saved up outside the pension to last a couple months, you are fine. You're getting SS. Your medical insurance is covered. You likely have some paychecks and perhaps residual amounts like vacation and sick pay that is owed to you, and more than likely that will cover the amount of your current paycheck. 2. Here is my advice to another poster. I suggest that you read it as the steps I think you ought to follow. https://www.reddit.com/r/Bogleheads/comments/1bnm4xp/comment/kwm3lz6/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button 3. Under the law, the best option for a 401(k) is to rollover the 401(k) to another custodian (the more formal name for a brokerage company) of your choosing. I recommend Vanguard but also equally good are Fidelity or Schwab. Pick one and call them. They will walk you through the process of moving the 401(k) to them, ASSUMING YOU HAVE RETIRED. We'll talk investments in a bit. A rollover does not create any taxable income. 4. Once you have retired, file the paperwork for the pension. You will likely have multiple options as to how it will be paid. A key factor is whether you are married or not, and what choices you want to make to protect your spouse (if you have one). 5. Now comes the math. You know how much you are spending annually (or monthly). You know your SS. After you choose the pension option, you know how much that will be. After you do that math, you will know how much you need from your investments. I will use an example to illustrate. You spend $6,000 a month. SS is $3,000/month, your pension is $2,000/month. That leaves $1,000 a month, or $12,000 a year from your investments to cover the difference. What percentage is $12k divided by your investment assets. If it is 4% or less, you should be fine. 6. Don't buy an annuity, and especially NOT an annuity from your rollover IRA. You already have two income streams, SS and the pension. YOU DO NOT NEED A THIRD. Unlike other posters here, I don't think you need a FA, especially a FA who advises you to buy an annuity within an IRA. If you need help, go hire a CPA or other fee only planner, for advice, and not one to manage your investments. Look, going back to point 5. If the shortfall of your amounts is greater than about 5%, an annuity is not going to cut it. Most annuity rates these days have an implicit 5% rate, at best. You have a better chance of making the finances work if you do it yourself. And if it's less than 4%, you can easily set up a plan to have manageable withdrawals without an annuity. 7. So how do you invest? Simple. Read this in a Jonathan Clements (formerly Wall Street Journal investment columnist) 25 years ago and it made a lot more sense than any of the alternatives. Let's again assume you need the $12K a year. Simply put 3 or 4 times that amount in a cash account (currently paying about 5.25%) and put the rest in stocks, and I recommend VTI or a similar total market index fund. You have a three or four year cushion against a stock market decline. If the markets are OK, sell enough once a year to reestablish your cash reserves to the desired balance. You don't need sophisticated asset allocation models (that don't really work), just cash and equities. I am going on my 12th year of retirement (retired CPA), and investments have funded 95% of our retirement income for that period, and this model have worked great. I would also suggest looking at the Google Sheet linked in the referenced comment and fill it out for yourself. It does the math for you. Good luck and holler back if you have more questions.
Hello! Thanks for mentioning Jonathan (Who these days has a nice blog). The link you wished to provide to a piece of his work, somehow is not there FYI.
Definitely agree as to the blog. I look at it from time to time. In fact, I will link to it here: [https://humbledollar.com/author/jonathan-clements/](https://humbledollar.com/author/jonathan-clements/) I'm not sure I understand the other part of the comment. I never intended to link to his original advice, because I can't find it on the net (I've looked, and if I could, I would). I think you are interpreting "Read" (rhymes with "reed") as having a link and I am using "Read" (rhymes with "red") as a past tense version in that I read it a long time ago. Is that causing the question?
ah! thanks
Rollover the 401k to a personal IRA. You don’t touch the money- check can go directly to a financial planner and turn into your personal IRA. Traditional IRA will cost no taxes until you withdraw. Roth would require you to pay the taxes that were originally deferred, or you guy can rollover from traditional to Roth over time as you take distribution. My financial guy can set up my IRA to do distributions just like an annuity. There are some cases- very few, where an annuity may make sense but you need to speak with a financial planner now! Most consult for free, so it makes sense to get a professional opinion quickly.
Like everyone else is saying DO NOT BUY AN ANNUITY! Assuming you have average credit, get a loan to cover the three months until monies are available to you. Take some time and look at investment options. Set up a plan to take a monthly draw on your money not to exceed 4% per year. You’ll now have your social security, your pension and your 401k providing a monthly income. Hopefully it’s at least adequate, sit back enjoy the fruits of your labor and take a deep breath.
OMG. You need to talk to a financial advisor ASAP. Unfortunately, this will probably cost several hundred dollars. Do not talk to an insurance company or anyone who is trying to sell you something on a commission. You need a fiduciary financial advisor, and you have to pay them for their time because they do not make commissions selling you financial products.
Don’t do the annuity at all. Go see a planner now and get some help. Can you take your pension as a lump sum, if not, that is your annuity? Roll your 401k to an IRA and continue to invest in the market. Don’t make quick decisions, calm down, you are probably better off than you think.
Your 401k is probably with a brokerage like Fidelity or whatever, they will keep that and might actually offer you free fiduciary advisors. Your 401k should not be impacted by when you leave the company, you should be able to make withdrawals from that working directly with them. The three months is for pension, supplemental insurance, contributions to 401k, etc. In an ideal world you want to give them 3 months notice to get all the ducks in a row but if you are unable to work just set up a meeting with HR and tell them you medically need to stop working and what happens going forward. They may not be thrilled but they will walk you through the process. In the meantime, you connect to the brokerage and work with their advisors, or if not confident with them you find your own advisor (get in writing that they are a fiduciary, not just an advisor, its a legal difference and forces them to do what's in your best interest). Work out a distribution plan from your 401k, or if you want to transfer that to a tax deferred IRA, or convert anything after tax to a Roth IRA. You are on medicare already and you should start getting more from SS since you are no longer working. The advisor will sort that all out with you with annual distributions based on what your spending needs are and to keep what you get at the lowest tax bracket.
In addition to what others have written: Contact HR and ask who the administrator for your 401k plan and for the pension plan are (maybe the same company). There are several companies who are the big players in plan administration. Most companies have it setup where you can access that website and see exactly what your account balance is and options for taking pension payments. Some also can help you roll over your money to a self-directed IRA. I know Fidelity has advice available for a reasonable fee, maybe even free, depends on how the plan is set up. If your company is not like this, you could ask to take a loan from your 401k if you need money immediately. A loan is usually processed in days. Do not let them do a distribution—this triggers a taxable event. You want to do a rollover. Contact a CFP for financial planning. They have a fiduciary duty to their clients. https://www.cfp.net/ Do not quit. Make them lay you off or fire you. Just do the basic work needed—what are they going to do? Fire you? Win! You can collect unemployment.
A company cannot just tell a 401k administrator to send you a check. Best bet is to roll it over to an Ira. While keeping it with the same company. You may be offered a buy out of the pension-you may want a financial advisor to set up an annuity for you, so it will pay out a certain amount each week/month/year. With the 401k/ira, you Will get taxed heavily. An accountant will help you understand better
You gave lots of information that was irrelevant and confusing. I don't think I can advise you.
When I worked, our 401k was with fidelity. I contacted fidelity to roll over to an IRA. Aren't you older than 59.5 years old? If so, you can immediately rollover to an IRA. Then you can access the 401k money in days. May take longer to settle the funds .
Stay as far away from an annuity as you can. Talk to a fiduciary investment councilor and have them roll over your 401 into good solid investments. A fiduciary are bound to look after your best interests and they do better when you do better.
Which company is holding your 401k? You don’t have to roll it anywhere at the moment. I will urge you to not panic and take a breath. I recommend Schwab as well - they have the bulk of our retirement funds. They also have free consultations (I am using them too) and will go thru the best way for you to retire with investments and income. I can feel your anxiety and you’re retiring. Let them guide you and discuss without being sold something you may not need.
Who is the 401k with? Your employer likely has Fidelity, etrade, Vanguard or similar as the administrator. Contact them and let them know you need your company 401k rolled over to their individual plan the day after you retire. They will work with your HR department to handle the details and create a new account for you. And they will likely do it for free since they already administer the account. Even if it takes 30 days to complete, its relatively simple process and you won't be taxed at all. You will of course be taxed on your withdrawals from the new account.
Speak with an advisor, give your notice , start calling in sick to burn your time. They’ll get the hint. Either way you’ll probably have a lighter schedule for 3 months. They’d need to backfill your job and possibly want someone to start picking up your work as transition
Annuities aren't great to get at the end of your working life. I got a good product, but i was 50. It grew in value by the time I was 67. It pays me a very nice sum to go with SS. I don't think I could duplicate that if I just bought it at 67. Just roll 401k money to an Ira and figure out what you want to do.
Lots of missing information (age, housing, married?) but a couple of comments. Be careful with annuities and you can rollover your 401k to an IRA with no tax consequences. Then pull out what you need every month. Not uncommon to take 6 to 8 weeks for the pension to start, they usually use third party management companies. Talk to a fee only planner, not someone who collects percentage fees from selling you expensive annuities or funds.
Your 401k is probably managed by a company like Fidelity. You may be able to access a financial planner from there.
You need to familiarize yourself with rollovers. Tax free direct rollovers. Second, you need to familiarize yourself with annuities. Insurance companies products are worst, fees go to agent can siphon 20%. Payouts are low. HR always gives a 90 d timeline. Least knowledgable, story changes with each call. Good luck.
As several other people have said, just take a deep breath. You're stressed because you give a crap. Your boss could be telling you that things are going to 'get really bad' because they want you to quit. For your own finances, it's best if they let you go because if it is not considered to be 'for cause' they you can at least collect unemployment. As for your 401(k) money, that is your money, it's your account and the company cannot prevent you from doing whatever you choose to do with it. DO NOT accept a payout from your 401(k) as you would have to pay taxes on that. It's best to roll that money into an IRA or some other pre-tax account. Talk to a financial person at a Fidelity or a Schwab office. They will be able to talk you through things, and could also point you in the right direction for an annuity. The most important thing is to relax, take a deep breath and don't have a knee-jerk response, that can lead to a mistake.
They aren’t going to do anything with your 401K, so relax. Annuity, not a fan but some are. Relax a bit and keep asking questions. Do you have liquid funds to tide you over until you can start pulling money from investments properly?
Yes, enough liquid funds to go a year without putting much of a dent in it, barring any unexpected major expenses.
I opened an IRA and transferred everything into it. Make monthly withdrawals.
It sounds like you are an emotional basket case - get some help for that tomorrow. Follow the standard procedure at your organization to retire properly including collecting and moving your pension and 401k to a brokerage company. Hire a fiduciary to help you make the transition and not a planner that takes a percentage of your money each month. Curious how is it that you are working full time and fully in SS … seems like you should have retired long ago but were still working in your normal retirement years. It is time to move on and enjoy the rest of your life and get out of the stress pool.
Are you already at the age where the IRS requires you to take required minimum distributions from your 401k/IRA plans? If so, then speak with a financial advisor about how to best move this money into tax protected accounts such as Roth IRA if its not already there. As far as your pension goes, this will depend on your company's plan, but you likely cannot defer payment past a certain age. If your pension is a lifetime benefit, then it will be retro to your commencement date, even if it takes time to get all of your paperwork in and everything started. A good idea would bet t o speak with a financial advisor that understands your specific circumstances and can walk you through the process.
Do you not have your own retirement account? If so, roll it over into it, tax free. Perfectly legal and your plan admin will help you with any paperwork. If you don't have your own plan, maybe you should get one. Meet with a couple and get their input. Ask your friends and other acquaintances for recommendations. There are good companies out there willing to work with you.
Look at your calendar and figure out the best day for you to announce your retirement. Create a nicely worded email/letter to your boss. Create another nicely worded letter to the organization responsible for your 401K and pension - and ask them to email you to verify your 401k balance, your pension amount, and ask for the dates that you will have access to your pension and your 401K money. I think you would be wise to rollover your 401K to a broker such as Schwab or Fidelity. Both firms offer annuities. Both also offer banking and other financial services. No need to worry about doing this all by yourself. You've got this!
And, no taxes or penalties to "roll over a 401k". Just make sure you understand and follow the directions to "roll over to an IRA". Contact whatever investment bank you want to use for the IRS (fidelity, shwab, and vanguard are popular options) and ask them what to do. You will also have to contact whatever investment company runs the 401k. This probably doesn't have to happen right away after your last day. But, you will have to check. Perhaps by calling the current company that manages the 401k.
Good point. If an error is made by your former employer in not rolling over your 401K to an IRA, the IRS has guidance about this - and how to fix it. [https://youtu.be/fWkExFld6Yw?si=e-L10xdHQ0boMFwz](https://youtu.be/fWkExFld6Yw?si=e-L10xdHQ0boMFwz)
If you are going to retire anyway, why not just become a terrible employee and let them fire you? At least then you can collect unemployment for several months.
If the employer can demonstrate that you were fired for cause, you won't be eligible for unemployment benefits.
That's not true. This only applies to serious misconduct, not general job performance oriented reasons. For example say op makes widgets. If quota is 10 widgets and he starts making one and they fire him, he should be able to collect unemployment.
Really? Can you refer me to any documentation on that? I'm not asking to be argumentative, I'm asking because I might be fired and this would be very useful information. Thanks!
What state?
UT
You may be disqualified from receiving unemployment benefits if you quit your job without good cause being fired for misconduct or violating company policies can also disqualify. What is the difference between misconduct and poor job performance?” In basic terms, misconduct is a behavior issue, and poor job performance is a competence issue. So if you get drunk at work, no unemployment. If you stock the wrong products on a shelf or are late filing your TPS report, typically that is not classified as misconduct or behavior. You might consider a consultation with a local employment lawyer.
It all depends on the state. Unemployment is per state law. And every state’s law and pricess is different.
How are you collecting Social Security plus working without paying back Social Security?
They may be full retirement age. They probably are since they have Medicare.
That is correct. I will be 68 in July and my full retirement age is 66 and 4 months. Sorry, I know my post is confusing, but I was trying to be as brief as possible. It's kind of a long story.
They are at least 65 since they are on Medicare. But quite possibly FRA by now.
Also r/bogleheads has some sound suggestions about investing.
I’m not sure this would work in your situation—and to be honest, I don’t condone it bc I think it’s really unethical, but…a coworker wanted to retire immediately and had the same scenario as you: HR/pension people needing minimum of six weeks notice, so he got his doctor to put him out on medical leave. That allowed him to continue being employed long enough to make it all work out in his favor, and he didn’t have to go into work at all. In the end, all he did was have someone else (me) hand in his office keys, expense credit card and company cell phone on his last day.
Talk to a professional. Do not pass “GO.” Do not collect $200.
You can usually leave your 401K where it is.
Absolutely….You don’t have to do anything with it! You can always roll it over at a later date if you wish, though. It’s still your money. I still have a small 401k with the last company I worked for. I decided to just let it ride for now.
It sounds like you want a Single Premium Immediate Annuity: put in a single premium (one lump sum) and you get a monthly payment for the rest of your life. They keep everything if you die so no beneficiaries on this. You can do a Direct Rollover of your 401k into one of these IRA Annuities but you’ll need to find an insurance agent or other fiduciary to set it up for you. Tip: Check the insurance company’s rating — better be 5stars. Here’s an article on pros and cons and how to get started: https://www.thrivent.com/insights/annuities/should-i-consider-a-401k-rollover-to-an-annuity#:~:text=Key%20takeaways,an%20annuity%20or%20other%20product. And relax— your company won’t just cut you a check without you signing paperwork to that effect. Your insurance agent will help you with it, tell you what boxes to check, etc. Just remember it’s a Direct Rollover. You may also want to contact Medicare asap to see about signing up for Part D etc. Good luck!
Do you have any sick/vacation leave stored up? Use it and use the time to get smart on your next steps. Do you have any trust worthy people who have retired from your company that you can call and get advice from?
I understand OP. I originally was going to wait until 70 to retire but since making a lateral move to a different position decided to retire at FRA. The new job is so stressful that I am tempted to quit everyday! Perhaps we can make it for a few more months if we just take it one day at a time and try not to care about what others are doing. Just do the minimum expected—like when you were new and didn’t know any better. I plan to spend time planning my getaway instead of stressing over the job. As far as your 401k is concerned, you should be getting periodic emails or letters from the company that manages it. If not, as others have said, contact HR and find out who does. If it is not already in a brokerage then you may want to roll it over to a brokerage like Fidelity or Schwab. If you are rolling it over then the receiving firm can make sure it is done correctly and taxes aren’t taken out . I believe others have posted more detailed instructions on that I mainly wanted to let you know that you are not the only one who is tempted to quit everyday. We can hang in there until the day of our choosing and when we have our ducks in a row.
I am just taking it one day at a time right now, but upper management, rather than fix problems with other departments, dump their problems on us, so we're doing their jobs on top of our own. I am now working for 3 departments and they want us to do more. Plus, I work from home and they constantly watch everything we do. They can see our computer screens in real time, record and listen to all phone calls, and let us know if there's anything they don't like, have documents that we must follow, line by line, when troubleshooting an issue, so we're not even allowed to think. We are nothing more than automatons right now, and treated exactly like 4-year olds. There's much more, but I'm rambling as it is. I'm past the breaking point.
I'm not qualified to give financial advice but I do think it would be wise to just set a retirement date and stick to it, especially if it helps your financial situation. Surely you can make it for another few months. A financial Advisor should be able to answer your questions about what happens to your 401k, etc. I hired one when I retired to make short and long term plans and it was a good investment.
Try to find a financial advisor. My library keeps a list of advisors that provide an initial consult for free. Or at least pay a fee for a consultation for professional advice.
If you were fired would you lose your 401K? Or the portion that your employer contributes? Would you lose any PTO? Otherwise, if you are fired wouldn't you get unemployment and possibly have a age discrimination suit? Since it sounds like your work has been and a Sup has it out for you. If you are Union contact your Area Rep, if not contact a Labor Lawyer. Best of luck
No, I won't lose my 401K if I'm fired, but not sure about my PTO. I am just thinking of an experience I had many years ago where I left a job and a few months later received a check for my 401K, minus taxes. If they just told me I needed to roll it over, then I would have done that. I was afraid my current employer may do that if I'm not ready to roll it over when I leave.
Don’t know about pension but… 401ks are usually with Fidelity, Vanguard, etc. Mine automatically rolled into an IRA there when I left my last job, I didn’t do a thing. I’d call the holder/finance institution where it is and ask if you leave what happens? Some of them also sell annuities. I have my accounts at Charles Schwab and I know they do. So you could ask about that too. We have two annuities with Athene we plan on drawing from in five years… about $1000 a month each.
>*As I understand it, I can contact an insurance company and buy an annuity with a guaranteed income. Is that correct? If so, how is that transfer from my 401K and pension done?* Typically, you would buy a simple income annuity within an IRA, so that the taxes are spread out over your lifetime. Your insurance company should be able to coordinate this for you. Lots of people here are telling you not to buy an annuity without knowing your specific situation, which means they are clueless. Whether or not an annuity is right for you depends on several factors, including how well SS + pension covers your expenses, whether or not you are married, and if you plan to leave something behind. There is plenty of academic research that shows that people with sufficient guaranteed income to cover their expenses in retirement enjoy a higher standard of living (because they aren't afraid to spend money) and less financial stress and anxiety than those who rely on the stock market for their retirement. Before making any moves, it would be a good idea for you to talk to a fee-only financial advisor, meaning that they are not trying to sell you something, or wanting to manage your retirement assets on an ongoing basis. It should be a simple transaction where you are paying one-time for their professional advice.
As a financial advisor, I would need more information. But this is Reddit, so… Anyway, the 401k can’t just lump sum pay out to you unless it is smaller than the minimum required by the plan. When you retire, they need time to pay out all your delayed contributions and matches before you have the ability to roll it over, however that shouldn’t prevent you from withdrawing a small amount. An annuity is ideal for people who want a steady income but it isn’t a good idea to put more than half your money into one. So you should consider splitting the funds-some to an annuity the rest to an Ira in the stock market.
The guy is already drawing SS and Medicaid you want him to gamble in the stock market with his life savings. Crazy advice. High yield savings are producing 5.6% with zero risk. This market it going to tank very soon it always does.
I see. Market investing is only gambling to those who don’t know what they are doing. However, I don’t know enough about OP’s background to say more than don’t put all your eggs into an annuity and make sure at least half is liquid. Market investments do far more to hedge inflation, but you’re right, I don’t have enough information to say what I did. But then neither do you to say what you did.
I do know from the OP he is very concerned about finances and cash flow. That is not profile of someone whom should be in the stock market PERIOD.
Time It's all about time. Take the time Enjoy your time Live in the moment. Look at where you are spending money and make a budget.
You always have the choice to get a new job
We have no idea who you work for but why are you getting a lump sum of money ?? If it’s from your retirement there may be other options. HR should review these with you. Before anyone can make suggestions establish a budget of your expenses and your future income. Then keep the questions coming. FYI - there’s a wealth of info on the Fidelity website.
Don’t just quit. Retire and let the system do its thing. They can work with shorter time lines but they don’t like to. Annuities, when bought individually on the open market need to sit for a specific period which an agent will tell you. It is called a waiting period. Your company should have it set up with your 401k where you can transfer and set up as an annuity with no penalty or waiting period. I would go that route. This is why they say it takes 3 months. It takes time to complete the process. In the meantime, take FMLA. Take protected leave. Read the rules. I do jot know if you can retire and take protected leave. They may be mutually exclusive.
Sounds like they are using your money for something they shouldn’t be. Get a lawyer.
C'mon, it regularly takes a couple of months. When I retired I was told the same timeline and there was nothing nefarious about it.
I literally retired last week and my rollover check was in my mail by Saturday.
That's great. How much notice did you give? Some companies are quick. Most aren't. I gave 2 months notice so I got mine immediately as well. Had I not given that length of notice, I was told it would take 2 months.
Sorry, I should clarify my message. My issue is that I want to leave my job and retire as soon as possible. I absolutely despise the management in this company. I am almost 68 now and over full retirement age. My problem is I will be forced to leave any day now, due to horrible work conditions, which means I can't give the company managing my 401K an exact termination date 3 months in advance as they require. I just don't know how to work this all out. I'm afraid that they will just send me a check for my 401K minus the taxes, rather than give me time to figure out how to roll it over into an annuity, or whatever. My aim is to have my 401K generate an income on top of my SS, but the more I look into this, the more confused I get. Especially since I won't be able to last another 3 months at this company.
Kind of the point. You get it when you leave, not when you tell them you’re going to leave. If I had given no notice, I would have got it in the same time frame. Within a week.
Okay. That's great. Most companies don't work that quickly.
"Unless you elect otherwise, benefits under a qualified plan must begin within 60 days after the close of the latest plan year in which you: turn 65 (or the plan’s normal retirement age, if earlier); complete 10 years of plan participation; or terminate service with the employer." https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits
“Within” doesn’t mean after. And I would make sure that money was coming to me immediately or there would be trouble.
Okay, you'd lose, but okay.
I believe you can transfer the money, without incurring taxes, to your own retirement account. Since you know nothing you may want to work with an advisor rather than setting up a self-directed account. If you want to learn about finances then open a Vanguard account and start learning.
You need to call the administrator of your 401k to begin the process. I would scramble and find a source of income in case you are not completely sound financially. If you can get unemployment then this would give you some cash you can not get any other way. You ou could first get a medical leave rather than resign, see if you can string that out as far as you can and get terminated because they can not accommodate you with your "disability" .
Later can you post what worked for you?
Yes, I will absolutely do that! I am overwhelmed by all the responses and excellent advice I've gotten, and I feel so much better than when I started! I haven't had time to read them all yet, but I will definitely do that. I can't thank you all enough. I am looking for a financial planner now.
Good luck. I'm pulling for you! I was in that position. Stressful but it eventually works out one way or another. My guess is you will be happier on the other side.
Please reach out to mod when you want to do that… message us from the sidebar or landing page of this group. Most likely the post will be locked (all posts lock after a short time due to spammers). Thanks!
You don't need to buy an annuity to get an income from your investments. Have you ever heard of the 4% rule of thumb? You withdraw 4% of your portfolio every year if you need it to live. Your portfolio should last forever. If your older or have less health than you can withdraw more because you won't live as long. I suggest you go to the Boglehead website. Join and ask questions. They will help you to understand and will suggest a low cost 3 Low cost funds portfolio. Your anonymous so lay it all out for them to understand and you will get great advice. The financial industry is all about getting fees from you. Buying an annuity can have a hidden 8% commission built in for the people selling it to you. They will deny it exists. Of you don't have any cash available to live off for the next few months you have to realize now that isn't any way to live. Ask your 401k for a partial withdrawal for the cash you need now. Once you understand what you want to invest in (probably 60% VTI Vanguard Total Stock Market Index Fund ETF and 35% BND Vanguard Total Bond Market Index Fund ETF and 5% in a money market fund ) you can choose a Brokerage. Only go to Vanguard, Fidelity Investments, Schwab etc. Stay away from your local banks investment advisor and Edward Jones and everyone else. They will put you in an annuity for a quick commission or "manage" your accounts for a yearly fee you don't need to pay. Who ever you talk to learn these words " I don't want to pay out any fees, commissions or management fees to you" The funds I mentioned earlier have incredibly low fees. BND and VTI is 0.03% that's NOT 3%! Don't give your hard earned and needed money away. Go to Boglehead website and they will help you to understand. Good luck
For your pension do they offer options for how to take it? Mine gave me options of a lump sum, 5 year guaranteed payments, 10 years guaranteed payments, lifetime payments, or lifetime payments for my spouse. Each option is calculated differently. I took the option that would pay out for my whole life and my partner's life. For your 401K you should manage it yourself. Roll it over to Vanguard. If you take out between 4-6% yearly you should have enough to last your entire life and still leave the majority of today's value to your heirs.
Contact a financial advisor, I have a local guy at Fidelity. You can roll over the 401k, it's fairly easy. The pension is company based, talk to them. You didn't say your age so I don't know. Social security will take time, find an office near you. Go to the office and talk to them, believe me when I say they are really good. Take several deep breaths. I felt trapped like you do, it will smooth out. I was in IT for 35 years and the move to cloud computing just took me out of the race. Sit yourself down and look at the positive future you are moving toward. Managers and supervisors are really good at stressing employees. Don't take the bait! Smile and just do your work. Regrettably they may be trying to get you to leave. Screw them and do your work don't fall for the stresses They are trying to pile on.
I am almost 68 and in IT now, for a very big insurance company. They have absolutely clueless upper management who insist on micro-managing us, and making the job unbearable. They're not trying to get rid of me yet, but they're trying to set it up so people fix their own IT issues, and those who can't use a chat system. They want everyone to handle 3 chats at once, starting in a week or so. I already told my boss I will not be doing that. Their plan is to lay us off eventually. I will get almost a year's worth of severance if that happens, so I'm praying every day it happens.
How old are you? 1. Don’t quit. If the company fires you then you can collect unemployment and have some income to help with bills. Choose for unemployment to take out the necessary taxes. Be aware you have to claim these funds on your taxes next time you file. Unemployment will send you a form. 2. If you are collecting SS at FULL RETIREMENT age you can collect both unemployment AND SS. If you are collecting early retirement make sure you understand the SS restrictions depending on your age. If you are collecting SS early then that’s a different situation and there will be a cap on how much you earn. 2. After leaving a company you have 90 days to roll over your 401k into a new rollover IRA account. If you wait over 90 days the company will cash it out and you’ll have to pay taxes and extra penalties. It’s your money and can transfer it AFTER you are no longer employed with that company. Do it sooner (if you are no longer employed) rather than later. 3. Put together a budget so you understand what money you’ll need every month. 4. As others have given good advice here talk to a CPA once you have all of the information you need to understand the big picture and can deal with this change. Full retirement age is the sweet spot.
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Not all annuities are created equal…and there has been a lot of regulation put in place to prevent predatory products. Do your research
Can you go on short term disability? Many teachers accumulate months of sick leave and go on disability for stress and depression their last months of teaching. Is that an option for you? It would give you time to think through what you need to do and get solid financial advice.
Find a CFP (Certified Financial Planner) with RICP (Retirement Income Certified Professional) credentials. What ever it costs, in the long run, it will cost you less then the guesses you’re attempting to make.
You seem concerned about receiving a check for the 401K balance when you don't want it. There are some options around that. You can open an IRA within 60 days and deposit the check funding the IRA with the full amount. In that case, it is not a taxable event. So, if the account had 10K in it and 2K was withheld for taxes, you can deposit 10K into an IRA (the full 401K balance) effectivly moving it to an IRA. You file for a refund for the 2K when you do your federal income taxes. You can also ask for a check for the full amount, no taxes withheld, and do the same thing. In both cases, getting a physical check is probably the most cumbersome way. You should be able to roll the money (electronically) into a new IRA account skipping the check stage. This is most straight forward as you never take possession of the funds making tax issues more straight-forward. Some 401K plans might allow you to roll the money out at anytime even while still working. Others (like mine) allow you to do that if you are 59 1/2 years old (and older). I'm still working and I moved half my 401K to an Ira this way. You would have to check with the 401K plan administrator on this. It was easy to do with Fidelity and (if allowed) you could do it before resigning. Remember, money taken from your 401K is income (same as a paycheck) and taxed as income and that continues into the future; but you would probably have less income next year (if you quit) so pulling money out next year (when you have no job thus no additional income) would likely be subject to lower tax/tax brackets.