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Old April 24th, 2014, 07:59 PM   #1
alterego
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Default relocating funds from profit sharing

Hypothetical

Let's say you have 35000+- in a company controlled profit sharing program. The program has been canceled and you have until mid May to do one of the following.
Take a cash out. Which you will be fined 10% by the gov for early withdrawal and you will need to count it as income for this year.
Relocate the money to a qualified IRA
Relocate the Money to a Roth IRA. Pay the taxes and the fine.
Relocate the money to the company controlled 401k.

If you take the cash out what would you invest the money in.

Dont bother saying whores and cocaine.
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Old April 24th, 2014, 08:04 PM   #2
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Hookers and blow.
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Old April 24th, 2014, 08:13 PM   #3
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I would just roll it over into a new 401K cause it's easiest to do. May not be the best financially, just easiest.
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Old April 24th, 2014, 08:16 PM   #4
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I would do some roth 401k and some traditional 401k

Wait, why do you have a fee for the roth 401k?
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Old April 24th, 2014, 08:21 PM   #5
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Get a bitchin Camaro
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Old April 24th, 2014, 08:31 PM   #6
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401k.

Roth has qualification requirements (i.e. If you earn more than x, Roth isn't an option).
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Old April 25th, 2014, 08:05 AM   #7
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I would suggest talking to a qualified investment person. I was in a similar situation and put money in an IRA. It really depends on how diversified you are currently, age, long term plans, blah, blah, blah. It may be a good time to seperate funds from your 401k in case something bad happens to that fund or group of investments.
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Old April 25th, 2014, 08:07 AM   #8
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35k worth of guns and ammo.
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Old April 25th, 2014, 08:16 AM   #9
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401k is the best option because there is no penalty to transfer and you can build it with a company match (hopefully). If you like the idea of a Roth go ahead and contribute on the side, but don't take a penalty to fund it by transferring what you have. By utilizing your 401 and a Roth, you would have both pre and post tax money available at retirement. If you are young (I don't know your age) then a Roth is a great idea to add because of compounding interest and time on your side. Just my .02
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Old April 25th, 2014, 08:17 AM   #10
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Quote:
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35k worth of guns and ammo.
I 2nd this
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Old April 25th, 2014, 08:27 AM   #11
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Quote:
Originally Posted by alterego View Post
Hypothetical

Let's say you have 35000+- in a company controlled profit sharing program. The program has been canceled and you have until mid May to do one of the following.
Take a cash out. Which you will be fined 10% by the gov for early withdrawal and you will need to count it as income for this year.
Relocate the money to a qualified IRA
Relocate the Money to a Roth IRA. Pay the taxes and the fine.
Relocate the money to the company controlled 401k.

If you take the cash out what would you invest the money in.

Dont bother saying whores and cocaine.
Relocate the Money to a Roth IRA. Pay the taxes and the fine. Incorrect, rolling to Roth does not require the 10% early withdrawal penalty, just paying the taxes

My preference is roll to pre-tax IRA until you meet w/a financial adviser to come up with a plan.
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Old April 25th, 2014, 09:05 AM   #12
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He could use it to take the retards to the zoo!
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Old April 25th, 2014, 10:08 AM   #13
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Default relocating funds from profit sharing

Quote:
Originally Posted by phittie1100 View Post
Relocate the Money to a Roth IRA. Pay the taxes and the fine. Incorrect, rolling to Roth does not require the 10% early withdrawal penalty, just paying the taxes

My preference is roll to pre-tax IRA until you meet w/a financial adviser to come up with a plan.

Exactly

If you're young I would go for the Roth. It will grow tax FREE and when you're retired you will pull it out tax FREE. taxes are going to do nothing but go up. Paying them now and being able to use the money tax free is the best
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Old April 25th, 2014, 10:08 AM   #14
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I personally would ask a bunch of strangers on the internet.
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Old April 25th, 2014, 10:14 AM   #15
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Well there should be a balance between roth and traditional 401k. The strategy is to draw from your traditional 401k and pay the lower bracket taxes first then draw from your roth to avoid paying taxes at all, especially in the higher brackets.
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Old April 25th, 2014, 10:18 AM   #16
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Quote:
Originally Posted by phittie1100 View Post
Relocate the Money to a Roth IRA. Pay the taxes and the fine. Incorrect, rolling to Roth does not require the 10% early withdrawal penalty, just paying the taxes

My preference is roll to pre-tax IRA until you meet w/a financial adviser to come up with a plan.
.
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Old April 25th, 2014, 10:23 AM   #17
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Default relocating funds from profit sharing

If you are less then 591/2 there could be no penalty, There are several exceptions. Might qualify because you have no choice but to move it.
If there is a penalty, Depending on your age you will then make up the 10 % penalty with tax free growth.

Last edited by cmetzg03; April 25th, 2014 at 10:26 AM.
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Old April 25th, 2014, 03:45 PM   #18
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Great question, I went through this exact same thing last year. We went with a Roth IRA and paid the taxes. We went through an independent RBC rep and it was very painless. If you go this route, remember Uncle Sam wants his cut in taxes for fed and state by Jan 2015 as it is newly claimed 2014 income.


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Old April 25th, 2014, 03:47 PM   #19
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I was being completely serious.

I like having hard assets though. Useful, tangible objects worth the money that can either be sold or used just seem like a much better plan than numbers on a piece of paper... ESPECIALLY when the market crashes like no one has ever seen before.
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Old April 25th, 2014, 03:50 PM   #20
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Quote:
Originally Posted by SS View Post
I was being completely serious.

I like having hard assets though. Useful, tangible objects worth the money that can either be sold or used just seem like a much better plan than numbers on a piece of paper... ESPECIALLY when the market crashes like no one has ever seen before.
This, and it may happen sooner than most will think.
I give it within the next two years.
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