I recently applied for my social security benefits. I received a notice from Social Security regarding retirement benefit information. I have a 401K savings and imployee stock ownership plan with AEP Industries and need information on how to access my account and ultimately have the funds dispersed to me. Please advise.
Priscilla, if the funds are "dispersed" to you, they will be taxable, and if you are not yet age 59 1/2, a tax penalty will apply as well. You should transfer the funds from your employer plan into an IRA, with the investments either directed by yourself, or with the assistance of an advisor. That recommendation applies in all cases EXCEPT if you are age 55+, but not yet age 59 ½, and intend on using some of the money before age 59 ½, in which case taking distributions from the company plan would not incur a penalty whereas taking distributions from an IRA would.
In regards to the administration of transferring, my recommendation is to first decide where you will be transferring the funds, and then get the transferee’s assistance in making that happen. Ultimately you’ll need to get paperwork from your company’s HR department, but the place where you are transferring into should be able to provide assistance with the paperwork and the process.
Dear Priscilla, You can contact AEP Industries HR re: your 401(k) plan. Please note you must begin taking Required Minimum Distributions (RMD) from your 401(k) by the time you turn 70 1/2. You may elect to take Social Security earlier (we planners tend to recomend postponing Social Security as long as possible, however). If you've left AEP Industries, you can roll over your current 401(k) to a Rollover IRA and manage it yourself - the IRA will have the same RMD requirements as your 401(k).