Bureaucracy and Taxes

[Fern Modena]

I have been taking scheduled withdrawals from my deferred compensation (457) account for five years. As of February 28th they are changing administrators.

Because of this, it seems *I* have to jump through several hoops. If I don't fill out new direct deposit forms and get them to the new company by February 13th, then I'll end up with a paper check. Ok, I can do that.

Then there is the tax situation. They say they are required to withhold 20% unless I want to be exempt, or unless something else I don't understand would allow me to have a 10% withholding, which I currently have. I don't understand this, so I guess I will call them.

There's also a third thing, and this one I can't possibly comply with. They've sent me a California Withholdings Certificate to fill out. Well, I am not a resident of California. They know it. But rather than them figuring out what to do, this is what they say:

If you are not a resident of the State of California and the state of your residence does not require mandatory withholding, you may submit your state's income tax withholding form to the correspondence address listed below.

Well, duh...I live in Nevada. We don't have state income taxes. So just what form am I suppose to send them? I don't get it.

Mark me confused.

Fern

 

[Fern Modena]

I called the phone number listed on the letter "for more information call" today. Guess what? She has absolutely *no* information about my plan. She says they will be trained in it "sometime next week." She couldn't help me at all.

Besides everything else, I don't know where to mail things. It says to mail the direct deposit form to my employer's retirement division. It doesn't say WHERE I should send the tax forms.

I went to the City & County's website, and there is no toll free number for the retirement division, nor is there an email address listed. I guess I'll have to call with my cell sooner or later. I Why do they have to make it so difficult?

 

[caribbean]

Fern-

Just curious as to your new and old firms. Here in VA we are in the process of changing our 457 from Great West to ING. In my case so far I have found the ING representative to be much more responsive than my former Great West representative.

 

[Fern Modena]

Rats! We are changing FROM ING to Great West. ING was very good with customer service, including the ability to reallocate monies online. You'll like it, I think. So far, obviously, I am not impressed with Great West.

Are you aware that you don't have to wait until 62 to begin to draw from a 457? I started taking mine (as a SWO) at 52-1/2. I worked hard and fast and retired young.

Fern

Fern-

Just curious as to your new and old firms. Here in VA we are in the process of changing our 457 from Great West to ING. In my case so far I have found the ING representative to be much more responsive than my former Great West representative.

 

[caribbean]

Fern-

I suggest looking for a local office & trying to get the name of a local rep and calling them directly rather than the general 800 number. I had better success that way. They just held informational meetings here and I got the Regional reps business card.

Yea.... I have been asking a lot of questions lately as I get closer to "the day". I will have my 30 in next December (at age 57) and plan on going out then. There is talk of the General Assembly trying to change the plan in the future and go toward a 401K based system rather than defined benefit, so I see no reason to stick around longer and possibly get burned. But will still need to do something to supplement till I can draw SS. Got to pay for all of the TSharing & travel, you know. I am thinking of taking the 30 days off required by the IRS and then coming back to my same job, but part time. Haven't talked with the boss about this as yet, but feel sure he won't want to lose me. Once I set the budget up for next fiscal year, I will be able to justify the additional money and that seems to be the best time to talk to him. I can double up on salary for 3-4 years till hubby can retire. All of this effects how I contribute and then pull from the 457.

So I have had a lot of questions for the new lady rep with ING. She was real quick on the first set of questions, but I sent her one yesterday that I think was a stumper. She said she would check on it and get back to me. I can't say that I was surprised. I couldn't figure it our from reading the IRS guideline either. Since I will have more income than now, I was looking at using the catch-up provision for the last 3 years that lets you double up on your deposits. But am not sure you can do that after you officially retire from full-time employment. You can still contribute to the 457 as a part-timer, but not sure to what extent.

Not only can you pull it early, you can also pull out a larger sum as a one time event for say a downpayment on that vacation home in Florida. And you can change the monthly amount. It seems pretty flexible.

Glad to hear you are so happy retired. It give the rest of us something to look forward to. 11 months 15 days, not that I am counting. HA HA