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Action Package

March 16th, 2009 at 11:08 pm

Oooh, I got my "action package" from my old 401(k) today. I'm not kidding about the "action package" part either. That's what is written on the envelope.

Now that I've officially left my old employer, my old 401(k) wanted to let me know what I am working with and what my options are. How nice....

Let's see, I could leave it with the old 401(k), and according to their simplified calculations of 3% and 8% return, I could expect a seemingly large sum by the time I reach age 65.

Or, I could roll it to a rollover IRA for only this so-and-so amount.

Or worse, I can cash it out and be penalized for around 20% in taxes (sent to the IRS as a withholding).

While the calculations aren't wrong per se, I love the way they only talk about "the big numbers" by keeping my money with them, and only so-so numbers for leaving.

Why do I feel like I'm in an abusive relationship? They've already made a bunch of money off of me in front loads, and now, they're singing me a song about how much better our lives would be if we are to stay together?

Snarkiness aside, the information was indeed very helpful. It included details of the various tax implications of each options and so forth.

Still, I'm going to stick to my original plan: Wait until maybe next year, when the last batch of employer contribution is sent, roll it all at once into an IRA somewhere, pay for the Roth conversion if all goes well, and rock on with life.

So, thank you for the Action Package, old 401(k). It's been real, but I can't say that I'll miss this old, dusty town.

3 Responses to “Action Package”

  1. monkeymama Says:

    Wow, that's pretty obnoxious. (The whole move it to an IRA and make less money thing?). I bet a lot of people believe it...

  2. Aleta Says:

    If I had the option, I would move it to an IRA and get it out of the hands of the new administrators. I guess I'm a little cautious about companies going under and my money going with them.

  3. Broken Arrow Says:

    Yeah, that's exactly what I plan to do as well. It's just a matter of figuring out where and putting it into what....

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