So my job was "eliminated" a few years ago just as I turned 55. I had a couple million in my 401(k) so I decided to not quit the hustle and bustle and was living off savings the last few years while I converted some of my 401(k) to the ROTH 401(k) because my tax bracket was pretty low. I wanted to switch things up and start drawing off my 401(k) for a few years to make a few large purchases. But low and behold there are very few options to access MY money.
According to Voya, I can only do a direct roll over, take it as a lump sum or take quarterly payments over (at most) 10 years. Rolling it to an IRA isn't an option because I want to utilize rule 55 which isn't available for an IRA. The quarterly payments would cost me way too much in taxes as would a lump sum. Other than doing nothing, I think my only real option is to take the lump sum and roll most of it into an IRA and keep out enough for the large purchases but that would hit my taxes all in one year. It's pretty ridiculous to have such stringent rules to access MY savings.
26 replies (most recent on top)
@iqtd, the government doesn't prevent Voya from letting people take money out of their 401(k), it's Voya's decision. The only thing the government decides is if there is a penalty. This poster was terminated at 55 YO so they don't have a 10% penalty.
I've tried searching their documents too and hardly any of their self imposed rules are documented. It's like they want us to yank all our money and go somewhere else.
Peoples… pass on this thread. There is nothing wrong with Voya. This person is simply frustrated about federal rules on withdrawals and taxes.
Well there are many things wrong with Voya, but everything here is from a disorganized person frustrated by Federal government laws.
@5ool
Your numbers do not add up. I came into the bank in 2004 and maxed the 401k every year. And I just turned 55. Mine was on Index funds. With the company contributions (both matching and the 2% retirement) - it is approximately 2.1 M as of 12/21/23 Voya site.
I did not take any professional advice. I was not willing to pay 2% for a computer program doing allocation. This has been one great bull market I am being told despite the 2008 crash. Passive Investing did benefit me
I came into the bank in 1993 making $30K. It was two decades until my mentor recognized my my talent and work ethic and my career rose. I lived for my family with a stay at home mom and our children came first. I don’t regret getting them through two great colleges with no debt.
The first thing that I asked you was “Single and no children?” And tellingly, I notice that it was the first question hat you avoided.
The other question which you avoided was “So let me ask you… who is really more wealthy?”.
No, I think that we understand you by your answers.
@5ool, you lying or you choose really bad investments. Your contributions alone would be over half a million if you contributed the max over the last 30 years.
I maxed out my 401K every year, and ramped it up further after 55 allowed catch up contributions. I don’t have even close to a $million. We did raise our children with a stay at home mom and also fully covered their education so they had no student loans.
So let me ask you… who is really more wealthy?
@4hpw, or someone who lived within their means. It's quite easy for many people to max out their 401Ks. Or perhaps they had a side hustle. Or sold a few homes over the years where gains were 100% tax free.
Must be one of these guys who sit in his basement and trade Tesla , GameStop and penny stocks all day
@4qpe, except I'd have to pay a 10% penalty to make withdrawals from an IRA for the next 2 years. Rule 55 only applies to 401(k)s and apparently Voya decided not to allow it.
It’s simple to take control of your VOYA funds and roll it over to rollover IRAs and even Roth IRAs.
Honestly its hard to understand how you can be savvy enough to save at those numbers and utterly unable to figure out how to withdraw them in a tax friendly fashion. If your head is spinning then at least simply keep converting balances into Roth IRAs.
Trust me.
And at least discuss it with a real financial advisor, and not the shysters like Fisher Investments who are always into heavy risk into the long term because they’re in it for a 100 year long term. But your long term is max 30 years. That, in a a nutshell, is why they will win and you will lose.
@1ukz
I think your obsession with UOP is because you actually flunked out of UOP! That's how stupid you truly are. Move on loser.
@iqt, that's a typo. I first typed that I decided not to look for another job but went for the "quit the hustle and bustle" and missed removing the "not".
@xdm, I get your point, but I have plenty of assets outside of my 401(k) they're just not as liquid. For long term care, I'd at least have to downsize my home for a single level. That would net enough to cover any care for decades.
@uyn, why would I pay taxes sooner and pay 2x to 3x the rate?
@ndg, cheer up and don't hate on people who made better decisions than you did.
@mzb, one grown child and a partner who can support herself.
@1ggb, congratulations on posting the most useless comment in the world. You really don't think it's useful to point out how limited our options are when dealing with Voya? Not to mention how limited their information is on their site.
@1ukz, sorry your parents wasted so money on a degree for such a failure.
Congratulations- this has to be one of the top 5 most ridiculous post to date.
That’s not easy to achieve.
You seriously need someone to help you understand your money.
Likely he’s a University of Phoenix Finance graduate
I’m confused…you say you decided NOT to quit the hustle and bustle, and then talk about not working and drawing your savings?
First time that I’ve ever heard anyone take Suzy Orman seriously.
@fsg, there are plenty of rules that plan administrators make. For instance, federal law ALLOWS me to take a loan out against my 401k, but the plan doesn't HAVE to allow me to and most limit it to one loan per year even though it would be legal to allow more.
Also boys won’t let u take out ur money after u leave for one month. Then it took me another month, so it’s really two months
You had a couple million… sure you did
401k is for retirement and you're still young. I bet you Suzy Orman wouldn't let you touch this money even after you turn 59.5 . If you spend this money on big items, and run out of money then who's going to take care of you when you're in your 70s. What will happen when you're in your 90s and can't walk to the bathroom by yourself. Then you will have to hire a live-in-aid to take care of you 24/7 and that's about 7000 cash per month currently in the northern east coast area. Those several millions you currently have may seem like a lot of money right now, but once you have to start paying 7000 cash for full-time care, and then for a roof over your head and food and medicine and doctors and heat and water and uber, it may be over 12000 a month easily. And if there's a long recession for many years then the stock market may not do good. Or if you need several surgeries due to an illness. Life can change in an instant, so perhaps you can put off your big purchases and live without them and keep your money in 401K and keep it growing until you really really really need it.
Why not take the hit, pay the taxes and convert them all to a Roth IRA? With your numbers you could easily live the rest of your life with no income tax to worry about.
You could design it throw off whatever income you desire, given a time frame.
Single and no children?
Voya and BNYM can’t make up their own rules about the 401(k) plan. They are subject to federal regulation.
Their app times out half the time I try to use it.
They are rules Voya negotiated with BK.
Those aren’t Voya rules