My questions is: Do I qualify to collect until I settle with a new job? Is it more convenient to retire?( I am 66), Retirement will be less than collection monthly for a while. Very difficult situation.
A: The teacher's association may have specific rules concerning your ability to collect. However, in general, a participant is entitled, under federal law, to rollover his/her 401(k) to a "rollover IRA" after termination of employment
. After rollover, the participant can do whatever he/she wishes with the assets.
Retirement is irrelevant, assuming that you are permitted to rollover the funds. Only your age matters, and if you are age 59 1/2 or older, then you are not subject to any penalty tax should you choose to withdraw some or all of the rollover IRA -- though you would be liable for ordinary income tax on the deferred income. This usually works out to about 40% of the amount withdrawn -- and there is no escape from the taxes -- except that if you were to move to a state without state income tax, then you would avoid any state income tax on the withdrawal. In some cases, this is a viable option, even if you ultimately decide to return to California. Probably not unless you are withdrawing at least $500,000, which could save you $50,000 or more in state taxes.
Second concern: May I get retirement ( my ex or mine) and collect at the same time?
A: Yes. Subject to any specific rules of the teachers association.
Are they going to deny me collection because of my 401K plan?
Please let me know if I can clarify or assist you further.