ESOP payment into cash

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date ESOP payment into cash Sara Brown 03-07-2008  Re: ESOP payment into cash kastnna 03-07-2008  Re: ESOP payment into cash Elizabeth Richa... 03-07-2008  Re: ESOP payment into cash Tad Borek 03-07-2008  Re: ESOP payment into cash Noemail 03-07-2008  Re: ESOP payment into cash kastnna 03-07-2008  Re: ESOP payment into cash Dave Dodson 03-07-2008  Re: ESOP payment into cash Sara Brown 03-08-2008  Re: ESOP payment into cash sandybeth 03-09-2008  Re: ESOP payment into cash BeachBum 03-09-2008  Re: ESOP payment into cash Elle 03-10-2008  Re: ESOP payment into cash sandybeth 03-07-2008  Re: ESOP payment into cash Elle 03-07-2008
Posted by Sara Brown on March 7, 2008, 5:05 am Hello..I work for a company that untill now has been 42% employee owned..Recently it has been announced the company is being sold and our shares of stock are being bought for about $50 a share..I have roughly 1,000 shares so that`s $50,000...I have lived a very poor and week to week life and that amount of money could change my life greatly right now or perhaps not far in the furture..I`ll save all the details and get to the point...The owners say they will only distribute the payouts into IRA accounts...Is there a specific type of IRA that will allow me to get my money in hand sooner without paying any more of a penalty than I need to?..Thanks in advance -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by kastnna on March 7, 2008, 12:10 pm > Hello..I work for a company that untill now has been 42% employee > owned..Recently it has been announced the company is being sold and > our shares of stock are being bought for about $50 a share..I have > roughly 1,000 shares so that`s $50,000...I have lived a very poor and > week to week life and that amount of money could change my life > greatly right now or perhaps not far in the furture..I`ll save all the > details and get to the point...The owners say they will only > distribute the payouts into IRA accounts...Is there a specific type of > IRA that will allow me to get my money in hand sooner without paying > any more of a penalty than I need to?..Thanks in advance > > -------------------------------------- > Misc.invest.financial-plan is a moderated newsgroup where Moderators strive > to keep the conversations on-topic for financial planning. Other posting > guidelines include a request for brevity and another for trimming posts to > which we respond.  For all of the other tips and suggestions, see "FROM THE > MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the > Newsgroup. Generally no, but before I jump to conclusions we need a little more info. "How old are you" and "how soon do you want the money in hand" will be a good place to start. Your intentions for these funds may also provide some insight. I will take no offense if you say "it's none of my business", but some expenditures allow you to get at the cash earlier and without penalty. -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by Elizabeth Richardson on March 7, 2008, 12:13 pm I have > roughly 1,000 shares so that`s $50,000...I have lived a very poor and > week to week life and that amount of money could change my life > greatly right now or perhaps not far in the furture. Do you have other retirement savings, or is this it? I'm asking, because this amount of money saved and compounded for the future will have a profound effect on how you live in your older existence. Do not touch it now. Elizabeth Richardson -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by Tad Borek on March 7, 2008, 12:41 pm Sara Brown wrote: > The owners say they will only > distribute the payouts into IRA accounts. Sara, ask your employer if it's possible to distribute the stock to you from the ESOP, before the buyout. It probably isn't, but if it is that could open up other possibilities. Early distributions from an IRA will be subject to taxes and a 10% penalty, unless you meet one of the exceptions - here's the IRS publication on the topic: http://www.irs.gov/publications/p590/ch01.html#d0e8325 How soon to you plan to retire? -Tad -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by on March 7, 2008, 12:45 pm wrote: >Hello..I work for a company that untill now has been 42% employee >owned..Recently it has been announced the company is being sold and >our shares of stock are being bought for about $50 a share..I have >roughly 1,000 shares so that`s $50,000...I have lived a very poor and >week to week life and that amount of money could change my life >greatly right now or perhaps not far in the furture..I`ll save all the >details and get to the point...The owners say they will only >distribute the payouts into IRA accounts...Is there a specific type of >IRA that will allow me to get my money in hand sooner without paying >any more of a penalty than I need to?..Thanks in advance Yes, make sure it is a traditional IRA (not a Roth). That way you can take out what you need and only pay taxes and penalty on the withdrawn amount rather than the entire 50K. Most banks will be more than happy to open one for you. Make sure you have the check made out to that financial institution and NOT to you (this is importent to remember). Remember to put aside money to pay the additional income tax that you will owe and 10% penalty when you file your 1040 in 2009. Depending on where you go, the financial institution can take the withholding right off the top (20% for federal) and deposit that with the IRS, however that's your choice. You need to make some decisions as to what you want to put the rest of the money into so you may want to do some research into various investments (mutual funds, ETF's etc). In your situation it may be prudent to keep the remaining money as liquid as possible, that is, invest in something that can be sold quickly or just find a good money market account. Good luck! -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Similar Threads Posted Rollover ESOP to Roth IRA April 19, 2008, 8:19 pm help with lump sum payment April 12, 2008, 6:31 am Do you want to know your monthly payment after ARM resets? August 15, 2007, 6:23 am How to Calculate 3 year ARM Payment After Adjustment November 30, 2006, 5:01 am Places to put cash February 11, 2007, 9:43 am Fed cash injection December 21, 2007, 3:28 pm Retirement Cash Out...How BIG a Hit ??? 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