should i collect this retirement money?/or, can you direct me to a good online resource?
Wednesday, February 24th, 2010 at
6:22 am
Hey…just woke up from amnesia. 57 years old…still working…can get 1000 a month from past (secure) retirement plan…will bump my wife and I up to…75 thousand a year…I dont know…
1)Does that make us in a new tax bracket? and
2)Should I go ahead and get that money…because even if the retirement amount goes up a little each year…what really is the point in waiting, even if I have to pay 300 a month in taxes on it?
3)Can I slip it into some investment that is tax-deferred?
Own a house…no savings…no nothing…a couple of used cars…a nice dog…health insurance…ping pong table…
Thanks!
Filed under: Dog Insurance
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At 57, I would just collect it. It’s still 700 more than what you two are getting now. But, that’s just me.
If you are not retiring age you can’t get at the money, You can only have the option of reinvesting it.
Try http://www.thepensionservice.gov.uk for advice if you are in UK.
I would cash out now and get the 75000 a year, and put most of it into cd’s for savings. They are great to live on. You can get 6 months cd’s at local banks and make a good profit. It is tax defferred if you rollover ever six months, and you can take them out gradually so you have plenty to live on. I would definitely go the path of least resistance. You will be in a new tax bracket, but if it is put immediately into a cd by a retirement savings broker then you only pay taxes on the amounts that you put into your checking account. Take it out gradually every month or year and you slowly pay taxes on it.
I have an IRA that is taxed up front personally(Roth IRA) because I am young and intend to make a lot more in my life. I don’t want to pay the taxes 30 years from now because then they will be higher. But with a large lump sum like that, hide it in a money market account and you will be able to hide from Uncle Sam and not get slammed. Stay away from the stock market it is going under quick. Most banks these days offer secure ways to keep from paying large amounts of taxes up front. Talk to the bank investment services administrator at the bank you use and see what they suggest. Avoid the IRA thing, because it ties it up until you are 65 or so, but go with a money market for the high return on interest, and put some in cd’s so you have access to it to live on until the rest matures.
Hope this helps…