- Is the package that appears better from an easy calculation actually the safer package?
- What do the package designers know that I don't and need to?
- Where are the risks in both packages?
- Do I need to consider the unstated risks? (Yes)
Friday, July 6, 2007
A couple of thought provoking questions
These questions and more to follow are ones that were critical in LANL employee's analysis of the benefit packages and were often unasked.
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5 comments:
How can we draw more financial advisors into this blog so that once presented the package they can tell us what to do and why?
One more question that must be asked. Here is the situation.
The new contractor takes over Oct 1st 2007 and I will turn 54 years old 14 days later. If I wait 90 days more before I retire from UC I will be retiring in the year I turn 55, even though my birthday will not be for ten more months. I believe that the IRS ruling for being able to draw money from your 403b without paying the 10% penalty requires you to be 59.5 years old, or have retired in the year you turn 55. This being the case would it be advantageous for me to wait an additional 90 day after the LLNS takes over, so that if I get laid off I can have access to my funds penalty free?
Answer to the first question
I would welcome more financial advisors.
The difficulty, from the point of view of the new financial advisor, is that the best strategy for LLNL employees is not the strategy that financial advisors, especially young ones, have ever learned.
A best plan, for a new financial advisor, would be to learn the tricks and difficulties of the LLNL situation from someone who has already learned them.
The new financial advisor could then help his or her clients with confidence.
Answer to July 6th 7:40 PM question
Penalty Tax on Early
Distributions
If you receive a taxable distribution before you reach age 591⁄2 and you do not roll it over, you must pay a 10% federal penalty tax (plus a 21⁄2% California state penalty tax, if applicable), in addition to regular income tax, unless you qualify for an exception. These
exceptions include:
you leave UC employment during or after the year you reach 55,
you are permanently disabled, you receive a series of substantially equal distributions over your life/life expectancy
(or your and your beneficiary’s lives/life expectancies),
you will use it for deductible medical expenses in excess of 7.5% of your adjusted gross income, or it is paid to an alternate payee under a QDRO
To 9:41
Thanks.
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