How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12167
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Type Your Finance Question Here...
Megan C is online now
A new question is answered every 9 seconds

Two questions: 1) I have been recently off and have a

Customer Question

Two questions:
1) I have been recently laid off and have a daughter that is in the final stages of wedding plans. I have three 401plans, but one older 401 that has about 150k (I am going to be 60 in two months). This particular plan is a "lump sum" plan so I need to take all funds. I was thinking of taking 50k for the wedding now and rolling the remaining 100k into something? ??

2) To make matters more interesting, her twin is now talking about a wedding so I may need to have additional funds for that (just being fair) . Where can I put the monie so that I can get to it easily?
Submitted: 7 months ago.
Category: Finance
Expert:  Megan C replied 7 months ago.

Megan C :

Thank you for your question. My name is XXXXX XXXXX X will be happy to help you. Your requested professional is not online right now, so I would like to assist.

Megan C :

I'm sorry to hear that you have been laid off.

Megan C :

If you take the whole $150,000 now, you will be taxed on the entire amount, so I think it's smart to take what you need and then roll the rest into an IRA

Megan C :

So, that answers both questions - what you are doing sounds smart, and you should put in an IRA so that you can get to it easily.

Megan C :

You are over 59.5 so you will not have any penalties when you withdraw funds from the account

Megan C :

An IRA will keep the funds tax deferred until you are ready to use it, but it's relatively easy to make a withdrawal. It might take a couple of days, but at least you're not taxed on the entire $150,000 until you need it.

Customer:

Thank you Megan, is there a particular process used to accomplish this (visit a bank, do it on-line, etc)? What rate will the 50 k be taxed with and how would it affect this years taxes (filed jointly with yearly income at 150k) ?

Megan C :

You will need to open an IRA - simply go to a bank and open one. Then, you will go to your 401(k) holder and request a rollover

Megan C :

You will give them your new account information and they will send the funds directly there

Megan C :

The $50K would be taxed at your ordinary income rate, with your income it would be around 25%

Customer:

Thanks again, would any monies taken this year be added to our yearly income . . . . . if taking 50k, then added to our 150k salaries would total 200k ?? Q: new tax bracket?

Megan C :

Yes, you would be in the 28% bracket, so you would be taxed at 28%

Customer:

Figures, last question (I think) Q: what is the break between the 25% and 28% brackets and is there a charge to open an IRA at a bank (if I walk in, do I need something to open an account so that I have an account to tell my 401 group to use)

Megan C :

The break is actually at 142,000 - so that's when you cross over into the new tax bracket. Also, you would have to call the bank first and ask them if anything is required to open the account. Each bank is different

Customer:

so it may make sense to wait until next year to do this. Landing a position at 60 is getting tougher and our joint income would be about 2/3rds reduced. I realize that we're probrably only talking $1500 but the market is favorable right now. (just using you as a sounding board)

Megan C :

Yes, it would make sense to wait until your income is lower. Every little bit saved helps!

Megan C :

And we are so close to the end of the year...only a few weeks until January

Customer:

Again, thank you for your advice. Have a great day . . . . . .

Megan C :

You too. Please rate me positive so that I may receive credit for assisting you today

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12167
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and 2 other Finance Specialists are ready to help you
Expert:  Megan C replied 7 months ago.
Thanks for the positive rating!

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney