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Posted by on March 1, 2008, 1:01 pm
wrote:
>Noemail@blank.com wrote:
>> I am about to receive around $90k from an in service distribution from
>> my ESOP (Same tax rules as a 401k plan or IRA with 10% penalty etc). I
>> have opened a Traditional IRA account at my bank to roll it over to.
>
>An ESOP distribution has special tax rules associated with it. Did you
>clarify all that with your employer? Issues like cost basis, net
>unrealized appreciation, etc.?
>
>-Tad
The rules for this are fairly staight forward as many people in my
company have also done this so to answer your question yes I have
checked it out. What it is is called an "in service distribution"
where I can elect to withdraw 10% of my fund every 10 years. Plus at
55 I could (if I quit the company) start taking the rest of my money
out over a 3 year period and again roll it over to the IRA until I was
59.5.
Now I probably won't do that, but the point is I still will have
around $900k at that point so it's not like I'm cashing out my entire
retirement nest egg right now.
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