The advice responds to the wife’s concerns about her husband’s employer after recent financial troubles and their plan not to use the after-tax funds for at least 10 years.
A direct rollover would avoid the mandatory 20% tax withholding and preserve tax-deferred status, while diversification through low-cost index funds, bonds, TIPS, CDs or savings could limit risk.
The column said only a lump sum, not monthly annuity payments, can be rolled into an IRA, and suggested adjusting stock-bond allocations with age and reviewing the portfolio annually.
Cashing out your pension? One rollover mistake could cost you tens of thousands in immediate taxes.
Your company offers a pension buyout. Is taking the lump sum a smart move or a retirement trap?
How can a $225k pension payout provide guaranteed income without the risks of the stock market?