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How do I draw my money out?

Jan 19, 2015 by Diane in  |  Flag
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4 votes
Steve Casull Level 13

Giving any answer to such a vague question could have severe consequences. There isn't enough space for the 'BOOK' I'd have to write to cover all the various aspects necessary.

2 Comments   |  Flag   |  Jan 21, 2015 from South Jordan, UT
Steve Casull

I guess a short and to the point answer to any client about "drawing money out of their account" is: "It is your money, all you have to do is tell me how much of your money you want, and I will have a check cut as soon as possible, without the slightest hesitation."

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Flag |  Jan 29, 2015 near South Jordan, UT
Steve Casull

I've always loved how our industry incorporates those things that when thought through, don't really have validity. Like the question, "What are you investing the money for"? I guarantee the answer is always, "To increase the money I have, so I have more money to eventually spend". Now true, the answer may have a variant of "So my heirs will have more money to spend", but it's all relevant.
Then there are those "Risk Tolerance Questionnaires" perpetuated by the big firms we have all worked for until we wised up. Do you really put the 60 year old into an allocation of 90% Bonds/Fixed Income? What about 2009 bond market down 11%, and 2013, bond market down 9.7%? Those are pretty big downs for the part of the allocation that pays little to begin with during the good times. And those two examples aren't rare. Look at the Long Bond history. Just about every 5 years the Bond market is a negative. And we all should know the math: if the account goes down 10%, then the remaining portion has to make 20% just to get back whole. But the time it takes to get back to whole in a 90% Bond allocation could mean 10 years, AND if the person is deriving an income from the account, the curve just steepened more.

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Flag |  Jan 29, 2015 near South Jordan, UT

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1 vote

Your question is incomplete. What kind of money and from where?

Comment   |  Flag   |  Jan 21, 2015 from Canton, GA

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The real questions are from where? What is your age? How much are we talking? Why do you feel you need it? What was it initially invested for and has that need changed?

Comment   |  Flag   |  Jan 29, 2015 from Loveland, OH

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Herbert N Glass Level 18

If I may assume you are asking from the standpoint of being in a 401(k) plan and you want to know "How to draw your money that is in the plan out to do something else with it.

First if the 401(k) plan you participate in allows it, there are a number of different ways one can get their or their employers money that had been contributed on your behalf.

Generally, it is possible to get distributions for any of the following reasons provided that the plan document says that you can. The possible reasons are: if you terminate employment because you quit or are laid off, you become disabled, if you die, your beneficiaries will likely be able to draw your money out of the plan, you may also be entitled to a pre-termination distribution even if you are still working for the plan sponsor, your employer. In addition, while you are still working, you can get a distribution if you have passed Normal Retirement Age, also if you are still working you may be able to take a participant loan from the plan, but it must be paid back timely otherwise the money may become taxable if you default on the loan with out curing the default on a timely basis, and you may also get a Hardship Distribution if you qualify.

As I said above, in order to qualify to withdraw money from your account, the plan document must allow it and you also must meet the criteria that is set forth as the requirement(s) you must meet before you can access some or all of your account monies.

The best thing for you to do is to request a SPD ("Summary Plan Description") from your employer or from the employer's benefits department. A full copy of the Plan document may be helpful to you also. And of course, if your employer has a personnel department, it would be a very good idea for your to pay a visit to that department and ask your question of them.

I hope this has helped you. Good luck to you.

Comment   |  Flag   |  Jan 19, 2015 from Franklin, MI

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