Voya 401K options when you retire.

You may know your 401K as The Smart Plan

This is the second part of your retirement. You make contributions to this plan. There is a small match ($750/year) if you qualify. There are 2 parts of your 401K. The stock which known as the "stock fund" & mutual funds and cash make up the second part. Many of you have the majority of your 401K in the stock fund. In January 2020 Corporate forced you to diversify your contributions. Only 25% of your contributions can purchase the stock fund.

If you have questions about the 2 parts of your 401K then let's talk.

Do I Need to Move my 401K when I Retire?

If you retire before age 62, you can keep your 401K as is. The January after you turn 62 packets are mailed to you. Decisions must be made by the end of February.

3 Choices after turning 62

  1. Rollover as is to an IRA that can hold your company stock
  2. Liquidate your 401K & rollover to an IRA
  3. Liquidate your 401K & take a distribution.  Strongly discourage this choice due to tax concerns.

If you do not make a decision, Voya forces #3, so you need to be proactive.

Keep in mind you do not have to wait until 62 to make any of these choices. Regardless of age when you retire, you can make any of the 3 choices.

If you retire before age 62, you can keep your 401K as is. The January after you turn 62 packets are mailed to you. Decisions must be made by the end of February.

Reasons for each choice

  1. If you bleed green, Rollover to an IRA & keep your stock is your best option.
  2. If you want to diversify & work with a Financial Professional, Liquidate & rollover to an IRA.
  3. I do not have a goon reason to liquidate & take a total distribution.  Consult a tax professional.

I work with people who liquidate & work with a Financial Professional

3 Main Benefits

  1. Experience - I have been profitably advising clients since 1996
  2. I take Emotion out investment decisions
  3. I build Diversified Portfolios which reduce investment risk

So how do you Rollover your 410K?

Corporate notifies Voya 7 days after you retire.  At this time the second part of your 401K (mutual funds and cash) can be rolled over.  You must wait until the next Valuation to Rollover your stock fund.  The actual Rollover can be initiated online or by calling Voya.  I conference call Voya with my clients to avoid any issues.

FAQ's

Is there a way to rollover ALL of my 401K 7 days after i retire?

Yes. You need to call Voya & have them transfer your stock fund to a mutual fund before Valuation Day of your Retirement.

Is there a Way to access my money & avoid the 10% early withdrawal penalty?

Yes. If you retire in the year you turn 55 or older. You can take a one time penalty free distribution if you rollover your entire 401K.

Can Voya directly deposit my distribution in my bank?

Yes. You need to set up banking instructions at least 10 business days before your distribution. Voya will deposit your distribution within 5 business days. Rollover checks are mailed & take up to 10 business days.

What's a 59 1/2 in service distribution?

A 59 1/2 in service distribution allows you to rollover your 401K if you are over 59 1/2 & still working. You would do this for diversification & to have money waiting for you the day you retire in your IRA.

Conclusion

There are 2 parts of your 401K. The Stock Fund & mutual funds/cash. You have to wait 7 days for Corporate to notify Voya of your retirement. If you want access to all of your 401K, you need to transfer the stock fund to a mutual fund before you retire. You have access to a one time penalty free distribution. Your 401K can be tricky to access in a timely manner. I've advised clients in every aspect & can help you make the right decision too.

If you have questions, let's talk.   

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